If you had to rank which aspects of running a dental practice are the least fun, paying taxes would probably be close to the top of just about everyone’s list. Many folks probably find the experience not just a chore, but a painful one at that. In my new video, I explain how planning ahead and establishing a tax account can make tax time a little bit less of a headache.
A Tax Account is simply a savings account that is allocated for various kinds of tax payments. Every week, set aside a percentage of your gross deposits and designate it to your tax account. You can use the money in your tax account to pay things like income tax, owner taxes withheld from their paycheck, and other business taxes associated with your dental practice.
But why is a tax account important? Having a separate account to handle taxes is a great accounting tool. Not only does it help you keep your finances organized, it also helps to ensure that you’re prepared when taxes are due. Anyone who’s been surprised by an unexpectedly high tax bill can attest to the benefits of having an account on your balance sheet that’s designated strictly for tax payments.
If you’d like to learn more about how to set up a tax account for your dental practice, and how to put profits first, please schedule a free consultation call here!