Willeford Group, Dental CPAs & Advisors Blog

A Word About Gold

Kate Willeford, Dental CPA & Advisor — Fri, 27 Jan 2012 16:14:58 +0000

Every 15 minutes it seems that there is an ad on the radio to buy gold. That kind of continual hype should be a red flag in itself. Just like there used to be ads about easy riches in flipping houses…. True, gold has had a nice run up in recent years; but it goes up and down like everything else! Although it has been a store of value over the very, very long term (i.e., longer than a lifetime!), it has gone through very long periods where it lost value in real terms (i.e., after inflation). For example, gold traded at $850 per ounce in 1980, then traded at only $900 per ounce in 2009 – 29 years later. (And, in fact, dropped to $343 in the interim, in 2003!) During those 29 years, inflation averaged 3.55% per year. So the real, purchasing price “value” after inflation was only $315 in 2009!!

I read a practical example that stated it would take the same amount of gold to buy a good suit of clothes today as it would have in 00 AD! Essentially kept up with inflation, and no more.

While it is wise to invest a portion of your money in something that often moves independently of the financial markets and also serves as protection against inflation, academic research shows that a broadly diversified basket of commodities is typically better than gold. In fact, many of our clients’ portfolios include about a 5% allocation to such a basket of commodities.

Taxes: Buffet “Rule” or Buffet “Ruse”?

Kate Willeford, Dental CPA & Advisor — Fri, 27 Jan 2012 16:02:48 +0000

As expected in politics, rhetoric often flies faster than facts. The “outrage” over billionaire Warren Buffet saying he pays less tax (15%) than his secretary (30%) is a good example. Buffet knows better.

As with most falsehoods, there is enough element of truth to make it believable. But Buffet conveniently forgets to mention that taxes are actually paid twice on investment income. That is one reason capital gains tax rates are lower than taxes on wages, which are only taxed once.

For example, assume a corporation has $1,000 of profit before taxes. It will pay 35% tax on that, leaving $650 that it pays to shareholders as non-deductible, after-tax dividends. The shareholder, like Buffet or Romney, then pays 15% tax on the $650 = $97.50. After both taxes, there is only $552.50 left over. So the effective tax rate on that $1,000 was 44.75%! (That is why most doctors use S corporations to avoid this dreaded “double taxation”.)

Back to the secretary. If she actually paid 30% in income taxes, the tax tables show that she would have to have earned between $500,000-$1M. That it doubtful. So folks probably get the 30% figure by adding payroll taxes on top of her income taxes.

The Congressional Budget Office says that, counting all income taxes, the top 1% pays an effective income tax rate of 29.5% while the average middle class taxpayer pays 15.1%. (Of course it is a different discussion to note that the top 1% pays in about 38% of all tax dollars….)

Willeford Group 12/31/11 Dental Production Index

Kate Willeford, Dental CPA & Advisor — Wed, 25 Jan 2012 01:30:52 +0000

DENTAL PRODUCTION INDEX 2007, 2009, 2010, 2011

The Most Reliable Dental Index in the Profession!

Why is this important to me? What do I do with this information? These statistics show you what your Doctor Production level could have been—the difference between that and your actual number tells you how much higher your Cash Flow could have been if your practice was running at optimum efficiency.

December’s Production Per Doctor was $73,000

On average, Doctors worked 14 days in December or produced about $5,200 per day

What was your production? If your office produced only $4,200 per day & worked 14 days then:

Ø You could have produced $1,000 more per day
Ø Meaning an additional $14,000 could have been produced in December
Ø An average of $12,500 Net Profit could have gone into your pocket!
Ø If this happens every month, then an additional $150,000 per year could go into your pocket!

Do you have room for improvement? If so, call us—we can help you put more cash in your pocket, which helps you achieve the income you need to support your Quality of Life!

Our Dental Production Index tracks practice trends Per Doctor for same set of practices over four years so the results are comparable. (These are all stable, predominantly fee-for-service, general practices open 5 years or more.)

Rick Willeford RickW@TheWillefordGroup.com

Kate Willeford KateW@TheWillefordGroup.com

Sales & Use Tax Return Reminder!

Kate Willeford, Dental CPA & Advisor — Thu, 19 Jan 2012 22:06:36 +0000

Remember to file your Sales & Use Tax Return. As we shared in our letter, it is due Jan. 20 if you want to take advantage of the “Vendor’s Compensation” (a 3% reduction in whatever tax you owe…this is supposed to cover administrative costs you may have incurred for having to fill out the return). If you don’t owe any tax, then the deadline is Jan. 31.

Any questions? Just give us a call at 770-552-8500

Your Advisors at the Willeford Group

Great WSJ article: “If Your Teeth Could Talk”

Kate Willeford, Dental CPA & Advisor — Thu, 29 Dec 2011 16:35:37 +0000

In case you missed it, here is the link to a great article in WSJ on 12/27/11 re the systemic link between teeth and your overall health. It is a great piece for you and/or your hygienist to discuss with your patients. That is better than having a discussion with their attorney later…..!

http://online.wsj.com/article/health_journal.html

Willeford Group Nov. Enhanced Dental Production Index

Kate Willeford, Dental CPA & Advisor — Wed, 21 Dec 2011 01:05:37 +0000

DENTAL PRODUCTION INDEX 2007, 2009, 2010, 2011

How does your practice compare? Our Dental Production Index tracks practice trends Per Doctor for the same set of practices over three years so the results are comparable. (These are all stable, predominantly fee-for-service practices with more than 5 years in practice.) Now you’ll have the most reliable dental index in the profession!

A few comments: Note that we have added data for 2007. Also, we have added an additional chart to show the Year-To-Date Cumulative average charges. 2011 production for November is greater than the other three years! The cumulative figure has pulled ahead of 2009 and 2010.

So, what if your numbers fall outside these averages? How does this info affect you and your income – and quality of life? The up or down trend is more important than the actual dollars. If you are following the same trends, then that may give you some comfort. Continue to do what seems to be working. If not, consider what may need fixing—and perhaps give us a call for some ideas.

Rickw@TheWillefordGroup.com KateW@TheWillefordGroup.com

New 2012 Retirement Plan Limits

Kate Willeford, Dental CPA & Advisor — Fri, 21 Oct 2011 12:29:39 +0000

Here are the new limits as adjusted by the IRS for inflation:

Retirement
Plan Limits

2007-2012

Limitation Type	2012	2011 – 2009	2008	2007
Maximum Annual Compensation	$250,000	$245,000	$230,000	$225,000
Elective Deferral Limit	17,000	16,500	15,500	15,500
SIMPLE Elective Deferral Limit	11,500	11,500	10,500	10,500
HCE Compensation Threshold	115,000	110,000	105,000	100,000
Catch-up Contribution	5,500	5,500	5,000	5,000
SIMPLE Catch-up Contribution	2,500	2,500	2,500	2,500
DB Benefit Limit	200,000	195,000	185,000	180,000
DC Annual Contribution Limit	50,000	49,000	46,000	45,0 00
Key Employee (Officer) Threshold	165,000	160,000	150,000	145,000
IRA Contribution Limit	5,000	5,000	5,000	4,000
IRA Catch-Up Contributions	1,000	1,000	1,000	1,000
Social Security Taxable Wage Base	110,100	106,800	102,000	97,500

Willeford August, 2011 Dental Production Index

Kate Willeford, Dental CPA & Advisor — Mon, 03 Oct 2011 17:23:13 +0000

Here is our proprietary DPI for August, 2011. Rather than being a “survey” (which is at the mercy of whoever replies each month), this DPI tracks the SAME 40 practices for the past 3+ years. So we are comparing apples with apples each month. They are fairly stable practices, so that the state of the economy and the calendar are the biggest factors.
One point re August is that there were 5 Mondays, while July had the 4th holiday to contend with.
Also note that these are primarily FFS practices in the Atlanta area. Your mileage may vary….
The Production on the left axis is in thousands and is Per Full Time Equivalent dentist.

Willeford August, 2011 DPI Graph

Beware Of Subleases With Specialists!

Kate Willeford, Dental CPA & Advisor — Tue, 19 Apr 2011 23:50:13 +0000

Dr. Charles Blair has been following a case in Texas where the Feds have charged an Oral Surgeon and 4 Peds with violating the Stark law re Kickbacks just based on their rental agreement! The Peds charged the Surgeon 15% of collections as “rent” to come into their offices. If you participate in Medicare, Medicaid or any other government program, you can only charge a fixed, fair market rental value. Another work around is for the Host doctor to charge the patient directly, and then pay the Oral Surgeon (or other specialist) a percentage, as an associate. (Of course that opens the door to employent law issues.)

It looks like the Feds are really focusing on other major issues with the Surgeon, and the 4 Peds are being dismissed from the case. They really dodged a bullet!! So, you may want to review any “rent” agreements between professionals ASAP!

New GA HOPE scholarship law signed!

Kate Willeford, Dental CPA & Advisor — Mon, 21 Mar 2011 14:48:50 +0000

Will one of your children be going to a Georgia college? If so, there is new reason for them to keep a GPA over 3.7!

Governor Nathan Deal signed Hope scholarship changes into law on March 15

The new program will give scholarships equal to 90 percent of current tuition levels to those students who achieve a 3.0 GPA in high school and keep that GPA throughout college. Those students who enter college with a 3.7 GPA and a 1200 SAT score will receive 100 percent of tuition through the Zell Miller Scholarship program as long as they maintain a 3.3 GPA in college. Mandatory fees and books will not be covered for any student.