Episode 564: Did You Catch These Red Flags?

Kiera is answering a listener's question! The question: How do I double-check my CPA?

The answer … is in this episode! Kiera talks about why as a business owner, you need to have a basic understanding of taxes and finances — enough to know when red flags pop up.

She shares how she navigates the finances of her business (alongside a team of tax experts), how she is able to stay aware, and why it’s so important to at least be aware of what’s going on.

Want to ask your own question and have it answered on the podcast? Email [email protected]! 

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Transcript:

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0:00:05.6 Kiera Dent: Hey everyone, welcome to the Dental A Team Podcast. I'm your host, Kiera Dent and I have this crazy idea that maybe I could combine a doctor and a team member's perspective, because let's face it, dentistry can be a challenging profession with those two perspectives. I've been a dental assistant, treatment coordinator, scheduler, filler, office manager, regional manager, practice owner and I have a team of travelling consultants, where we have traveled to over 165 different offices, coaching teams. Yep, we don't just understand you, we are you. Our mission is to positively impact the world of dental and I believe that this podcast is the greatest way I can help elevate teams, grow VIP experiences, reduce stress and create A teams. Welcome to the Dental A Team podcast.

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0:00:51.5 KD: Hello, Dental A Team listeners, this is Kiera and you guys, happy day to you. I hope today is epic, I hope you're having fun. If you wanna know, today I am legitimately podcasting... I might still be in my PJs. Today is a day where I woke up and I was making my... Journaling, making my plan for the day and I thought, "You know what, I'm just gonna sit here not doing... I have literally not gotten out of bed, still in PJs, and I am podcasting today. So today is Pajama Podcast day, if any of you are listening to me in your jam jams, email me, I'd love to know my pajama fan club. [chuckle] [email protected]. I just adore you guys, and I hope this podcast is just resonating with you, and it's reminding you that guys, dentistry is the best profession we could ever work in. And I just always feel blessed to; one, have this podcast, two, for you guys for listening. Because when I created this, I was terrified maybe we'd get five listeners. And to see that we are downloading 50,60, 70,000 downloads a month. We are in hundreds of countries, that's magic. That is a magic ripple effect and that is what this podcast was designed to do.

0:02:01.6 KD: So guys, keep going. Download, share with friends, tag us on social media when you're listening to us, just take a quick picture of the podcast, you can do a quick screenshot on your phone and pop it on your Instagram story, tag The Dental A Team, share it in a Facebook group, leave those five stars, guys, 'cause that helps boost us up on every platform you're listening to. That's how you guys can help us and I just appreciate you doing it. So for those of you who have done it, thank you. I just gave you a hug or a high five. If you're a hugger, fantastic, we just gave a huge hug, if you're a high fiver, we definitely looked at the elbow, so it was a perfect high five. If you have yet to do it, please do so and that's not just a passive ask that's an active ask, because without you, this podcast cannot continue to reach thousands, and our goal is to reach millions of people. Alright guys, let's dive into... Actually, speaking of our fantastic podcast family, we actually had somebody email in a question that they wanted us to answer on the podcast.

0:03:00.5 KD: Guys, I love this, you can either go on our podcast page, so thedentalateam.com. Click on Podcast and there is a place for you to submit suggestions for the podcast, or you can email us, [email protected]. One, I love, love, love pen pals, and two, I love to hear the questions that would benefit you. So today's question is, How do you double check your CPA? Because one of my clients was missing a dependent on his tax return, so it helps to know at a high level, what to look for on your tax return and have a team of advisors to level up. So with that, this is a zone... I should probably have a CPA on here and I might even do this with a CPA, but I just wanted to give you guys a couple of quick tips of things I've done in my business, things that we've helped our clients do. So first and foremost, as much as I hate saying this, I do believe as a business owner, you do need to become tax savvy. Now, that does not mean tax perfect, it means tax savvy. I kind of feel like taxes are like... I've been trying to think of a good analogy. I feel like it's a game.

0:04:03.7 KD: My brother had this weird game and he called it violation. Why he named it? I don't know but it was pretty epic. And what happened was, my little brother went to a garage sale and he bought this game. And this game had no title on it, there was nothing on it and there were no instructions in the box. So my brother was super creative and he decided to name the game, come up with the rules of the game and then have us all play this game. That's honest to goodness how I feel like taxes are. Because the rules changed, none of us have the rule book, none of us knew what we were doing and that's honestly how I feel like taxes are. I feel like when I talk to my CPA, they'll answer my question but they forget to give me the whole rest of the picture of things I could have done. For example, writing off cars in the business. Well, I had no idea, and again, check with yours because for us as a consulting company, we drive to clients and we have to cart clients around. And so writing off cars in the business is totally legal for me to do, but for some dentists it is not legal for you to do it.

0:05:07.0 Speaker 2: But my CPA... The first time I bought a car, I didn't know that if you buy a car that's over 6000 pounds, it's 100% write-off. I also don't know that if you buy a car below $50,000, it's a five-year write-off. If you buy above $50,000, it's a 12-year write-off because it's a luxury tax. So with this client who called in... Things for taxes is I actually have my taxes double checked by a secondary person. So I have two people I use, Eide Bailly and my current tax guy, his name is Preston with Panda Accounting out of Arizona. Preston and I have been together for several, several years, and I feel like sometimes he's my big brother and I'm like, "Preston, you have to tell me the rules of the game so I can win." I just believe in having a second set of eyes go on it. Pro-Fi is a CPA firm we recommend, I also recommend Eide Bailly. Scott Haberman with Eide Bailey is fantastic. I also recommend Morgan with HDA Accounting. Those are three of my favorites for dental, they're very good with dental specifics, because a lot of things you can actually have write-offs on. You can have different deductions.

0:06:18.2 KD: If you guys haven't heard Derick with Big Life Financial, he is another great resource and he does the R&D tax credits. We've got some offices that have saved... I'm legit, I'm not lying to you guys, they are getting thousands. We're talking six, seven, eight, $900,000 back from these R&D credits. So I'm a big believer of in your tax world, of having a tax team of experts.

0:06:43.9 KD: So for me, I have my main CPA. My main CPA, he does my bookkeeping, they help me with my payroll and they file my taxes for me. He also helps me with setting up entities, some people are weirded out by that, some people prefer a legal team, other people prefer their CPAs. At the end of the day, check with your legal team, see what they prefer. For me, I decided my... I don't have that big of a risk. So my CPA is great, he's got businesses in multiple ones, he's got lawyers on his team, I feel very confident with that decision.

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0:07:15.7 KD: How many of you would just love to DIY and get the secrets of people who have been there, done that, on your own time? Because I know for me, I love to learn from the best of the best, the people who have been there, done that and can give me the shortcuts. That's why we have created our Dental A Team Virtual Academy, where it's on-demand courses for you at your fingertips. Where you literally can learn the secrets from all of my experience, all of Tiffany's experience, Britney, Dana, our entire team's experience at your fingertips. So stop taking the hard route, guys, there's a shortcut sitting there waiting for you, and it's also CE. Head on over to Dental A... Thedentalateam.com and click on our Virtual Academy. Be sure to use coupon code Podcast and get started on that DIY and become the practice of your dreams.

0:08:02.0 KD: In addition to that, I want someone who's a freaking tax expert. So I ask people, people... So what I found is when your business... When I watched practices, when your business is producing or right around that million mark, you're pretty good with a pretty generic CPA bookkeeper. When you break that million mark and you're going from 1,000,000 to about 5,000,000, that's when you need to have a little bit more advanced. So we're talking, you might need a secondary advisor, you might need to start looking into estate planning. You wanna have somebody who's going to double check your taxes at the end of the year for you so you have a second set of eyes. What did we miss? What other deductions could we take? Double-checking it. Once we go from that 5,000,000 to that 20,000,000, we need to have a pretty strong financial board. We have a bookkeeper, we have a CPA, we have our financial advisors, we have our investment strategies. At this point in time, your assets have gotten so large that you're actually needing more help. And what I found is when your take-home pay from that zero to about 100,000, pretty good. And we always can look at the tax years, when you started hitting that 30% to 40% paying in tax, for me, that's when I started having a board of advisors in our company and for other dental practices. I needed a board of advisors to start looking to see what other deductions and credits could I have.

0:09:22.3 KD: Missing dependents, you can have family members, you can write off portions of your house, you can have kids on payroll, there's so many areas and if you're not looking at those areas, you could be paying excessive tax or missing deductions. So that's where I'm really big on one... There's some great books that I actually have and that I read that I wanna share with you guys because I'm a... [chuckle] Like I said, I decided this year that I'm gonna become a freaking tax expert. I'm like, "Tell me the rules of the game. I am tired of not knowing." So there's a couple of books that I have, if these are helpful for you, one is called Tax-Free wealth: How to Build Massive Wealth, and the other one is The Tax and Legal Playbook. So those are two books that I personally have bought, that I'm reading to go through, just again, so I have an overview and a benchmark of what I'm looking for. I think it's really important so you know what you're looking for. Just like I believe every dentist should know the basics of billing in their practice. I don't want you to do billing, but I do want you to sit with your billing team and I want you to do an insurance verification so you know the process.

0:10:31.5 KD: I do want you to post a payment so you know the process, I do want you to write something off so you know the process, I do want you to send a statement so you know the process, I do want you to submit a denied claim, so you know the process. Same thing with taxes, the more I learn, the more I'm educated. I also go to tax strategy events. So for me, I joined Tony Robbins Group, he's got Wealth Mastery, that's a really great event that I found that I really liked. Keith Cunningham is another great expert when it comes to numbers and tax that you can go to to just educate yourself. So I joined Tony Robbins platinum group, and I went to his finance course and then I've also gone to Wealth Mastery and I'm going to Wealth Mastery again this year, 'Cause I'm sick of not knowing all the rules of what you can do. There are great people out there that you can just start attending, going to these events, going to different places, reading books on it, because I feel no matter what, of how you can double-check this, so many things get missed. I just wanna have a basic understanding so I can notice red flags without knowing all the red flags. So I feel like as business owners, we do have a moral obligation to ourselves and to our business to at least be educated on what's going on.

0:11:50.1 KD: Guys, this isn't my wheelhouse, this isn't the zone, but I will speak from an authentic non-CPA voice of... The things I do are one; I have tax meetings with my CPA in July, in October and in December and then again in January. Does my CPA maybe hate that? The answer is yes. Am I sick of crying every year when we find out and I'm so sick of the stress of it? The answer is a heck yeah. [chuckle] So I don't care if he's annoyed by it, these are the meetings I have. I'm having my meeting this month in July, this podcast might come out in August, so I had it in July with my CPA, and we are looking to see what we are planning, what we're estimating, my estimated tax payments. Where I'm going, what I need to do, where am I at. Now I just added in a house to my mix, so it's gonna change up my tax strategy for this year. I also, I'm looking at... I bought a lot of things for the business, I need to start projecting for future. Do I need to invest in more employees? Do I need to be investing in... For dental practices, we need to start buying cone beams, larger expenses. What is happening with our taxes this year, and what is our strategy? The reason I meet in July is because it's my halfway point through the year. So we've seen what we've done in Q1 and Q2, I can probably forecast how Q3 and Q4 are going to be, that way I'm prepared and I can start making expenses.

0:13:11.8 KD: I do not like shelling cash in December trying to make all these purchases because I feel like it's very frantic, I don't enjoy the holidays. And I also don't like having that much cash flow gone in December. So in July, I start meeting to make sure I'm prepared. Now, I'm sure Pro-Fi, Eide Bailey, Morgan with HDA are like, "Kiera, what the heck? I don't want all these calls." Guys, I don't care. My CPA works for me, and if this helps me feel more confident in my decision so I don't have surprises at the end of the year, to me, I'm going to expect that of my CPA. This year, I set up a scorecard so I am seeing all my estimated taxes, I put money into a third-party bank account for all of my taxes to make sure it's prepared that way. In July, our goal is to plan our tax strategy for the remainder of the year, in October it's to check to see how are we out-looking for the end of the year, and the beginning of December is, where am I at? Let's review it. What is it? I have them prepare my taxes in January, so I'm reviewing all of it, but guess what guys, as soon as December 31st hits, I can't go back and do anything other than adding to my 401K steps and IRAs past December 31st.

0:14:21.9 KD: So that's why I have my multiple meetings with my CPA to ensure that I'm set up for the end of the year. That way I can make smarter decisions and navigate and pivot quicker rather than wait until the end of the year. I also think this is a great way to not have as many mistakes made, because guess what, we're not having the mistakes made. We have more time to plan, we have more time to double check. In December is when I send it off to a second CPA and say, "Hey, this is what I'm estimated to pay for next year, can you double-check me and just see if you see anything? Because I had the entire month of December to make pivots and changes." So that's my strategy, guys, of what I do, how I have my board of advisors and what I've advised a lot of clients to do as well. I love CPAs, I also realize they're human. Eide Bailly has tax strategists, Goldman Sachs has tax strategists, these are people who their job is to know the tax law inside and out, but I also wanna come to the table educated to know what things to ask.

0:15:18.3 KD: Guys, there are thousands of ways to do it. I purposely joined Tony Robbins Platinum Group because I wanted to be around multi-million and billionaires. I wanna ask them what they do for tax strategy, I wanna pick their brains. I wanna know what they're doing even though I'm not there yet. Because I believe if I think like them, I act like them and I utilize the resources, I will become them. So hopefully that was helpful. Thank you to this reader, this listener who shouted out, send it out, I appreciate you. And guys contact those people, if we can help get you connected be sure to tell all those CPAs that Dental A Team recommended you. I have a few others, if you want someone else, if you're not crazy about them, let me know, but the number one piece to success is, do you trust your CPA? And if you don't, it's time for you to find a new one. If I can help you guys, this is stuff we do, it's not 100% my wheelhouse, but I do feel like our team is pretty well educated and we have a thousand resources. Let us know, 'cause I'm a big believer in preparation leads to a lack of fear. So if we're super prepared, you won't fear and that's my strategy.

0:16:22.7 KD: So hopefully that helps. Just having those double checks, have a friend check it for you, I do pay for that second check, just so you know, it's not something free. I do pay those other teams to review my taxes, review my books, look at everything and see that... If anything is off, if anything was missed. Sometimes having a separate person file your taxes than your CPA can also be a second set of eyes so you've got two different people. I'm not there yet, I've thought about doing it. Right now, I just like having it all in one place and having that second person that I know and I trust, double check my taxes for me. So hopefully that's helpful, guys, email me any time, ask any of these questions, [email protected]. And as always, thanks for listening, and I'll catch you next time on the dental team podcast.

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0:17:07.6 S2: And that wraps it up for another episode of The Dental A Team Podcast. Thank you so much for listening and we'll talk to you next time.