EPISODE 2: TAX PREPARATION VS TAX PLANNING

Show Notes

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Why you need to listen to this episode:

• You’ll see the advantage of having all your professional needs under one roof
• You will learn how you can save taxes and keep more of the dollars and cents of what you earn
• Discover how you can save taxes, fees, and interest costs
• How you can bypass some issues that have been causing many problems in your practice for years

Summary

The challenge that every dentist faced in today’s day and age is time.

They have no time to check their finances. Dentists nowadays also have no time to check if they’re getting the right professional help for their business. And all they got is a maxed-out fee that they have to pay every six months or at the end of the year.

The truth is that most dentists even believe that they have the right system in place.

In today’s episode, Adam Tenaschuk from Dental Tax expands on the importance of having your systems managed by professionals under one roof. He also shares case studies that more often than not, are the same situation that’s happening to your practice right now.

Listen in as we discuss and explain the difference it would make to your bottom line if you have the right professionals that will help you grow your practice and how you can save money along the way.

Topics discussed in today’s episode:

1. [0:01:18] The challenge in Canada is that many accountants that are out there just do tax preparation. So every year, tax preparation is a cost for compliance.
2. [0:01:43] Typically, a month or so, or if it's a corporate year-end, even longer, typically about six months, three to six months. And then they just tell you how much you owe, and there's no true planning done. There's no actual tax preparation done.
3. [0:02:39] Dental Tax a few years back for this purpose. It is to provide a one-stop-shop approach where we'll do your tax planning, implement retirement planning, insurance planning, all under one roof. 
4. [0:03:30] The primary reason for starting Dental Tax was to make sure dentists can continue to save taxes, do proper tax planning, not just tax preparation, and keep more of the dollars and cents of what you earn, because you work hard, in your pocket for your family.
5. [0:04:00] Most dentists have different silos. They have their accountant, then they have their lawyer, they have the other professionals that are helping them, but nobody's talking. And they expect the dentist is going to be the quarterback for all of that, who's the person who has the least time.
6. [0:04:27] So the services that we do are a group of financial planners and accountants that have come together to formulate Dental Tax. But on the financial planning side, what we can do for you is we implement the investing and the insurance angle. And then with our accounting team that we liaise with, they handle your tax preparation, and we work with them to make sure that the plan that we've built is all on one page, and it's succinct, and there's no disjointedness.
7. [0:04:56] The problem we have that your accountant would say here's a couple of strategies for you or your investment advisor would have a couple of strategies to implement, but these two individuals aren't talking. And if they are talking, they may not be on the same page.
8. [0:05:10] The challenge is that you're leaving thousands of potential dollars on the table because either one, you're not a big enough client on the financial planning advisory side, so they won't pay enough attention to you.
9. [0:07:43] Dentists have their own silo of health care professional banking at each bank, so it doesn't matter if you're with Royal Bank, TD Bank, CIBC, they have their dedicated people.
10. [0:14:44] Any income earned, either dividends, interest, or capital gains that have been realized, we can now distribute those dividends to family members at a lower rate. And that by-passes this issue that's been causing a lot of the problems.
11. [0:17:34] The problem at the end of the day is while they may be individually very good, you're still not getting the full benefit because they're just not, if it's the same person who's advising on all fronts, how could that possibly not be better than having three separate individuals, in separate offices, often in different areas, there's just no way that you can get the same result.
12. [0:19:08] My goal is to really just try to make sure that as many dentists as possible are set up for success when it comes to the whole financial goal of my financial game because there's a lot of ways that this can be played.
13. [0:20:03] They had a friend that incorporated; they would just take their articles and assume that those articles of incorporation are something that they could just copy and do on their own. And then they do something wrong, and it's going to cost them more money to fix later.
14. [0:20:56] If there's something that's wrong not to do, you've got to do things right from the beginning. Don't just try to do things on your own because you heard it's easy or you saw a commercial on TV.
15. [0:22:55] The wrong time to do it is when you're midway or late in your career. The best time to do it is when you're starting so that you can have the runway to take advantage of these things. 

Shareable quotes from this episode

" About 46% of the amount of income that is brought in the door goes to tax for the average dentist."

" The challenge that every dentist has is time"

" There's just not people communicating back and forth, and you have to just figure this out on your own."

" We save not only taxes but we save taxes, fees, and interest costs, and, on average, they can amount to, our average clients save about 24,000 and change per year right now."

" Tax planning is an investment, and tax preparation is a cost. So when you combine the two, it equals true tax savings, fee savings."

" If you're not paying for the work, or you're getting a discount, you always get what you pay for."

" The more consistent and intentional you can make the process, the more likely it is to give you the results you want."

" It's just all about true tax planning and it even comes down to the simple things of taking track of your expenses."

"If you don't start with installed processes to make sure you pay less taxes, it's just never going to happen."

"The wrong time to do it is when you're midway or late in your career."

" You need a cohesive team of communication. And if there's no communication, then there are thousands of dollars left on the table for these dentists."

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