Summer is long behind us and the new year is just around the corner. As we approach the end of the year, here are a few things to consider to end 2022 on a high note and get 2023 started right.
1. Fee Increases
Many dental practices only implement fee increases once per year at the beginning of the year. 2022 was an expensive year for many practices with increasing staff, lab, and supply costs. Make sure you account for these expense increases when you consider your fee schedule for 2023.
While a fee increase may have little impact to your practice right now due to existing insurance contracts, your fees should reflect the costs of providing high-quality services to your patients.
2. Retention Bonuses and Staff Compensation
Many practice owners struggling to attract and retain key staff have implemented retention bonuses. As a reminder, once the first retention bonus is announced, you should provide some type of timeline and expectation for receiving the next bonus. Make sure you follow through on this timeline/expectation and always put the next phase of incentives in place to keep the momentum going.
3. Estimated Tax Payments and Year-End Planning
Depending on your entity structure, you might be making quarterly federal and state estimated tax payments during the year. These amounts would typically be based on 2021 taxable income. The fourth quarter estimated tax payment is due January 15, 2023 and it might need to be adjusted based on your 2022 profitability to minimize tax surprises on April 15th.
Now is also the time to plan for year-end. There is still time to take action before the tax year closes.
If you have equipment needs, consider purchasing this fall to take advantage of accelerated depreciation and potentially reduce your federal and state income tax liabilities. There are numerous other strategies to help reduce your tax liability but most will require action before December 31st, so now is the time to talk with your advisors and act!
4. Retirement Deferrals
If you are planning on making a change to your retirement plan for 2023 (or setting up a new plan), now is the time to connect with your retirement plan administrator to ensure everything is in order and any required notices are delivered timely to your staff.
You will also need to coordinate any change in deferrals, matches, etc. to your payroll provider before the beginning of 2023. You should also review your 2022 deferrals now to make sure you are deferring the maximum as there were increases to 2022 limits.
In tandem, consider whether it would make sense to employ your spouse and/or children in the practice. This can be a significant tax planning opportunity, along with allowing family to participate in the practice retirement plan and/or make individual retirement plan contributions on an annual basis.
While staff retention/recruitment and rising costs have been an enormous challenge this year, 2022 is proving to be another profitable year for many dental practices. A few key adjustments can potentially make a good year even better. Reach out to SVA and let’s chat about your practice needs.
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