Specialized Accounting Services for the Dental Industry
Dental practice, while primarily focused on providing quality oral healthcare, must also navigate the complexities of running a successful business. From managing patient accounts to handling overhead costs, dentists face unique financial challenges that require specialized attention.
Specialized Accounting Services for the Dental Practice
Accurate and meticulous bookkeeping is fundamental for dental practices. This includes managing patient billing, tracking accounts receivable, and handling operational expenses. A robust accounting system not only ensures compliance with healthcare regulations but also provides insights into the financial health of the practice.
In addition to standard bookkeeping, dental practices often deal with insurance reimbursements, requiring careful accounting to track and reconcile payments. An efficient system helps in identifying any discrepancies and ensures timely reimbursement.
Tax planning for dentists involves optimizing deductions and credits specific to the healthcare industry. This may include deductions for equipment purchases, understanding depreciation for medical tools, and exploring tax credits related to healthcare services.
The structure of the dental practice also plays a role in tax planning. Whether a sole proprietorship, partnership, or corporation, the business structure impacts tax liabilities. Dentists need to consider the most advantageous structure for their specific circumstances.
Taxation Laws in Oklahoma
Dentists primarily provide services and only incidentally use tangible personal property, so the gross receipts they earn from these services are not subject to sales tax. Dental supply houses, on the other hand, sell tangible personal property like platinum, gold, silver, or filling materials to dentists or dental laboratories. These sales are subject to the Sales, and the dental supply houses must collect, report, and remit tax based on the gross receipts received from these sales. This applies to sales of materials used by dentists directly in patient care or by dental laboratories to create dental prosthetics on the prescription of a dentist. Dental supply houses also collect, report, and remit tax on sales of dental equipment and instruments sold to dentists or dental laboratories. Dental laboratories, when purchasing tangible personal property to produce dental prosthetics, must pay tax at the time of purchase but should not charge tax when transferring the finished product to a dentist. Dentists or dental professionals are required to pay sales or use tax on items they purchase for incidental use in their professional or laboratory services. The law provides a list of taxable items, including appointment books, brushes, instruments, towels, and various other dental supplies, but this list is not exhaustive.
710:65-19-71. Dentists, dental laboratories, and dental supply houses
(a) Dentists. Dentists primarily render services and incidentally use tangible personal property in connection therewith. The gross receipts of dentists derived from these sources are not subject to the sales tax.
(b) Dental supply houses. Dental supply houses who sell tangible personal property such as platinum, gold, silver or cement for filling, artificial teeth or other such materials to a dentist for use in the performance of the dentist’s services are making sales within the Sales and Use Tax Code and must collect, report and remit tax based on the gross receipts received from such sales. This is true whether the dental supply house sells material to a dentist whose services are rendered directly to a patient, or to a dental laboratory that uses the material in producing plates, bridge-work, artificial teeth or prosthetic devices on prescription of the dentist for the dentist to use in connection with rendering dental services. Dental supply houses likewise collect, report and remit tax on gross receipts from sales of dental chairs, motors, instruments, drilling machines or other such items for use by dentists or dental laboratories.
(c) Dental laboratories. Dental laboratories that purchase tangible personal property to produce plates, bridge-work, artificial teeth, prosthetic devices and the like must pay tax when the material is purchased and must not charge tax to the dentist when the finished product is transferred to the dentist.
(d) Items purchased by dentists. Items which are purchased by dentists, but which are used incidentally in the rendition of professional or laboratory services, are subject to sales or use tax and the dentist or professional must pay sales or use tax when the item is purchased. Examples of such taxable items are:
(1) Appointment Books
(3) Brushes, Tooth Cleaning
(5) Cotton Rolls
(6) Discs, Sandpaper
(7) Examination Blanks
(9) Floss Silk
(12) Handpieces and Angles
(15) Matrix Bands
(19) Paper Cups
(23) Sandpaper Strips
(26) Trays, Impression
(27) Aluminum Trays
(28) Plastic Trays
(29) Waste Receivers
(30) X-Ray Supplies
(e) The enumeration of the taxable items in subsection
(d) is made by way of illustration and not limitation.
[Source: Amended at 11 Ok Reg 3521, eff 6-26-94; Amended at 20 Ok Reg 2175, eff 6-26-03]
Hire a CPA for Dental Practice
Dental practices benefit significantly from the expertise of a Certified Public Accountant (CPA) specializing in healthcare. CPAs with experience in the dental industry can provide tailored advice on tax planning, financial management, and compliance with healthcare regulations.
CPAs assist in structuring financial systems that align with the unique needs of dental practices, ensuring accurate reporting and compliance. Their expertise extends to navigating the tax implications of healthcare services and helping dentists optimize their financial position.
Why Choose Epsilon Accounting Solutions, CPA in Edmond, OK?
Epsilon Accounting Solutions recognizes the distinctive financial landscape of dental practices. With a commitment to personalized service and expertise in healthcare accounting, Epsilon is the trusted partner for dentists seeking financial efficiency and compliance.
Disclaimer: This article does not constitute tax advice. Please consult Ahmed Baqir, CPA at Epsilon Accounting Solutions PLLC, before making any tax-related decisions or taking any actions based on the information provided in this article. Ahmed Baqir, CPA, has the expertise and knowledge to provide personalized advice tailored to your specific financial situation and goals.