Episode description

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.

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

• 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

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

• 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

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

• 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

• 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