Tax Projections 2020
We are diligently working on 2020 tax projections now that October 15th (last extension deadline) is over.
Tax projections are vital this year for your cash flow planning. We want to make sure that you avoid cash flow surprises, minimize your tax burden and plan accordingly.
Your 2020 taxable income is probably higher than you think. We have been tracking net income trends and the results may surprise you.
- Most dental practices now have reduced collections of only 8% to 10%.
- Many dental practices have also reduced their overhead.
- This will create a higher taxable income for the practice (for most of you, practice income is passed to you individually to pay tax, this means you!).
If PPP expenses remain non-deductible (currently the IRS stance unless Congress changes it), this will also increase your net taxable income.
HHS Funding is income for 2020.
We are currently not deducting your PPP expenses as we prepare your tax projections for 2020. This will hopefully be a worse case scenario for the expected tax due in April 2021. As you know, this year is not “normal” so we are adjusting and analyzing your practice finances to compensate for the abnormal year. Our strategy is designed to normalize 2020 as best we can. The more current the practice information, the more accurate the tax projection.
Therefore, it is very important for you to send us your practice information for each month so we can analyze your practice using the latest financial information. Please catch your practice work up and send it our way as quickly as you can.
If you would like a tax projection meeting scheduled, please reach out to either BJ or Tim and they will set up an appointment to discuss your practice and tax situation.