When it comes to managing the financial aspect of a dental practice, there’s much talk about tax. You’ll have to know some essential things about what should be taxed and what can list as a tax-deductible. Every dental practitioner wants to find a way to save money and cut down running costs without negatively affecting their quality of service. And one of the main ways to save money is by knowing what qualifies as tax-deductible expenses.
What Are Tax Deductibles?
Tax deductibles are all forms of expenses incurred wholly for business purposes. They are the necessary costs of your practice, and you can reduce the amount of tax you pay when you figure in these costs. You can outsource your financial management to a professional dental associate accountant San Diego who’ll explain what qualifies as tax-deductible. However, if you’re managing your practice finances, it’s even more vital for you to know these deductibles. They include:
If you have to travel between two different places solely for your dental practice, then the associated expenses are tax-deductible. Also, allowable tax deductibles include motor costs incurred for business-related movements, such as going to provide home service to a patient.
However, motor costs from journeys that include personal elements, such as going from home to your office, do not qualify as tax-deductible. If your practice has an official vehicle used only for business purposes, then costs like vehicle branding, fuelling, servicing and repairs, road tax and insurance are deductibles.
Bank interest on business capital loans and other charges from your business bank accounts qualify as tax relief.
Practice Running Costs
Some direct costs incurred in running your practice, such as costs of drugs, consumables, laboratory, and technician charges, can be listed as tax relief. Also, the expenses you incur from hiring professionals like lawyers and agents are tax-deductible. Expenses categorized under tax relief also include:
- Costs of advertisement for your practice
- Rents and professional license costs
- Costs of general dental supplies
- Costs of amenities like internet, electricity, water, and heating.
- Miscellaneous costs such as association fees, professional indemnities, and dental association levies, are tax relief.
To confirm if you can claim tax relief for your running costs, you can consult with an expert dental associate accountant in San Diego.
Expenses Relating to Your Employees
Staff related expenses like salaries, insurance, professional training costs, employee welfare, and recruitment can qualify as tax relief.
Well, at least to some extent, the costs of entertainment for your employees, like staff parties during the holidays, can fall under tax deductibles. Just don’t go overboard with it, or consult with your accountant first.
In some cases, donations to charities are tax deductibles too.
There are several expenses incurred during your practice that can qualify as tax deductibles. Knowing these costs will help you avoid overpaying taxes and help you save money in the process. However, it is best always to consult an accountant or hire an experienced dental associate accountant in San Diego to handle taxes and manage your business accounts properly.