Working with a Dental Specific CPA - Tax Planning & Financial Management Strategies: A Conversation with Jonathan White

🎙️ Episode Summary

Join hosts Simplify Dentistry hosts Dr. Mustafa Shah-Khan and Dr. Richard Offutt as they interview Jonathan White, CPA, founder of Jonathan W. White CPA PLLC, a dental-specific accounting firm serving over 300 practices. This episode dives deep into year-end tax planning, practice management strategies, and critical financial decisions dental practitioners face. From equipment purchases to DSO considerations, learn valuable insights for optimizing your practice's financial health.

👤 Featured Guest

Jonathan White, CPA

• Founder and President of Jonathan W. White CPA PLLC

• Specializes in dental practice accounting and tax services

• Former auditor supervisor at a regional audit firm

• Eight years of service in the United States Marine Corps Reserve

• Services over 300 dental practices across all specialties

⏱️ Key Timestamps

• 00:01 - Introduction and guest background

• 01:34 - Q4 planning strategies and importance of accurate numbers

• 05:21 - Discussion of vehicle expenses and documentation

• 16:23 - Retirement planning and compensation strategies

• 31:39 - Equipment purchase considerations and tax implications

• 41:28 - Technology in accounting and practice management

• 45:22 - DSO considerations and valuation factors

🎯 Key Takeaways

1. Year-End Planning

   • Start Q4 planning early with accurate financial data

   • Work with your CPA on projections before major purchases

   • Consider both immediate and long-term tax implications

2. Equipment Purchases

   • Understand basis implications before making major purchases

   • Consider cash vs. financing impact on tax benefits

   • Plan for long-term payment implications

3. Practice Management

   • Staff costs trending around 27% of revenue post-COVID

   • Hygiene costs significantly increased since pre-COVID

   • Insurance reimbursement rates affecting profitability

4. Tax Documentation

   • Vehicle expenses require detailed mileage logs

   • Business use must exceed 50% for vehicle deductions

   • Maintain thorough documentation for all business expenses

5. DSO Considerations

   • Best for practices within 2-3 years of retirement

   • Count only upfront cash in valuations, not rollover equity

   • Consider lifestyle and long-term financial impacts

💡 Practice Management Insights

• Staffing Costs:

• Traditional target: 25% of revenue

• Current reality: Trending higher due to increased hygiene costs

• Post-COVID adjustments needed for profitability

• Technology Integration:

• Important for both practice and accounting

• Modern dashboard reporting systems

• Real-time financial tracking capabilities

📊 Financial Planning Tips

1. Equipment Purchases

   • Consult CPA before major purchases

   • Understand S-Corp basis implications

   • Consider cash vs. financing impacts

2. Family Employment

   • Document duties and responsibilities

   • Set reasonable compensation levels

   • Consider retirement plan implications

3. Vehicle Expenses

   • Maintain detailed mileage logs

   • Track business vs. personal use

   • Document business purpose for travel

🔍 Practice Valuation Considerations

• EBITDA Focus

• Critical for practice valuation

• Important for DSO negotiations

• Monitor profitability metrics

• DSO Sale Factors

• Timing considerations

• Upfront cash vs. rollover equity

• Working period requirements

📱 Connect & Learn More

• Website: Contact Jonathan W. White CPA PLLC for dental-specific accounting services

• Join: Simplify Dentistry Facebook community

• Register: simplifydds.com for future episodes

Topics: dental accounting, tax planning, practice management, dental finance, DSO valuation, practice profitability, dental business, tax strategy, dental practice management, dental CPA