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EMPLOYMENT STATUS & ENTITY CHOICE

EMPLOYMENT STATUS & ENTITY CHOICE. UNIVERSITY OF FLORIDA 2 nd ANNUAL DENTAL BUSINESS SYMPOSIUM . EMPLOYEE vs. INDEPENDENT CONTRACTOR. Employee Tax Treatment Advantages – Payroll taxes, fringe benefits, insurance coverage Disadvantages – 2% AGI limitation Independent Contractor

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EMPLOYMENT STATUS & ENTITY CHOICE

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  1. EMPLOYMENT STATUS & ENTITY CHOICE UNIVERSITY OF FLORIDA 2nd ANNUAL DENTAL BUSINESS SYMPOSIUM

  2. EMPLOYEE vs. INDEPENDENT CONTRACTOR • Employee • Tax Treatment • Advantages – Payroll taxes, fringe benefits, insurance coverage • Disadvantages – 2% AGI limitation • Independent Contractor • Tax Treatment • Advantages – Tax planning opportunities, retirement planning • Disadvantages – More responsibilities and filing requirements • IRS 20 Point Test • General Dentist vs. Specialist

  3. IRS 20 POINT TEST • Level of Instruction • Control of Assistants • Continuity of Relationship • Flexibility of Schedule • Need for On-Site Services • Method of Payment • Provision of Tools & Materials • Investment in Facilities • Work for Multiple Companies • Availability to the Public

  4. CHOICE OF ENTITY • Limited Liability Company (LLC) • Legal Liability • Taxation • Income Tax • Self-Employment Tax • S Corporation • Professional Association • Legal Liability • Taxation • Income Tax • Payroll Taxes

  5. Limited Liability Company vs. S Corporation

  6. Limited Liability Company vs. S Corporation

  7. LIABILITY PROTECTION • Limited Liability Company • Charging Order • S Corporation • Stock Exposure

  8. Business considerations • Initial set up • What can I write off when I incorporate? • Keep business and personal activity separate • Easier at year-end • Liability protection • Proper documentation of expenses and revenue • Business credit card • Mileage log • Business use of personal assets • Payroll considerations

  9. FRINGE BENEFITS • Health Insurance • Disability Insurance • Pre vs. Post tax • Occupation-specific • Retirement Plans • SEP IRA – Up to 25% of compensation to a max of $52,000 for 2014 • SOLO 401(k) with profit sharing – Up to $17,500 deferral with additional profit sharing amount up to 25% of compensation to a max of $52,000 for 2014

  10. EMPLOYEE THEFT • Not if, but when • Trust, but with oversight • Security levels • Check day sheets to appointment schedule to deposits made • Cash or Check? • No rubber stamp. • Inventory, supplies, small equipment, and postage

  11. UNDERSTANDING THE BUSINESS • Understand the business, but focus on the chair • Surround yourself with trusted advisors • Consult with advisors before making important decisions

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