The Dentist’s Year-End Financial Checklist – Episode 262

What financial tax jobs need to get done before the year ends?

On this episode of the Dentist Money™ Show, Ryan & Matt have put together a year-end checklist of financial jobs you can’t ignore. As the year draws to a close there is a lot going on, but Ryan & Matt are on top of things making sure you don’t forget to complete important practice and personal end-of-year tax items.

Here are 10 things that need to be done before December 31st—and a few items that can wait until you file your taxes.

 

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Podcast Transcript

Ryan Isaac:
Hey, everybody. Welcome to another episode of the Dentist Money Show. Today, Matt and I are talking about some of the year end things, the financial tasks, some of the investment account tasks, and accounting or tax return things you’ve got to get done before the end of the year, and which ones you can push off until you file your tax returns. It’s a great list. It’s a great time. And if you have any questions, go to the Dentist Advisors discussion group on Facebook, post a question, we’ll answer it or schedule a consultation with us directly on our website. You’ll get a very knowledgeable, very friendly, dental specific financial advisor on the phone to answer your questions and point you in the right direction. That’s the dentistadvisor.com. Book a free consultation. Thanks for joining us, everybody. Enjoy this show.

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now, here’s your host, Ryan Isaac.

Ryan Isaac:
Welcome to the Dentist Money show where we help dentists make smart financial decisions. I am Ryan Isaac here with Matt, the mountain of the Hollywood, Mulcock.

Matt Mulcock:
Here I am.

Ryan Isaac:
Welcome to the show, Matt. What’s happening? Thanks for being here.

Matt Mulcock:
It’s so good to be here. So, good to be here, Ryan.

Ryan Isaac:
We are your guides this day or this evening, depending on when you are listening to this show. But when you’re listening to the show-

Matt Mulcock:
This time in your life.

Ryan Isaac:
At this point in your … this juncture in your life.

Matt Mulcock:
This juncture.

Ryan Isaac:
This juncture in your life.

Matt Mulcock:
This juncture in your life, we are here.

Ryan Isaac:
A juncture. Everyone needs a good juncture every once in a while. Everyone just needs a good, good old juncture. Just everyone.

Matt Mulcock:
You know what else people need, is what you just finished up before this recording, which is a nice bacon breakfast burrito. Was it a breakfast burrito?

Ryan Isaac:
It was a breakfast burrito. So, here’s my take on this and we can jump into it, is tacos are better than burritos except for breakfast bacon burritos.

Matt Mulcock:
That is so true.

Ryan Isaac:
If anyone would like to debate that-

Matt Mulcock:
It’s not even a hot take, I don’t think, I think that’s just pretty much accepted.

Ryan Isaac:
I think it’s a hot take. But if anyone wants to comment on that let us know. The Dentist Money show, the thing you’re listening to right now at this juncture in your life, is sponsored by Dentist Advisors. Dentist Advisors is a comprehensive, fee only financial planning firm just for dentists across the country. Check us out at dentistadvisors.com. Reach out, talk to us. So, Matt, this episode’s coming out before the end of the year. We made it to the … Well, I guess this will [crosstalk 00:02:30]-

Matt Mulcock:
Don’t you dare say that, Ryan.

Ryan Isaac:
I’m not going to jinx this.

Matt Mulcock:
Don’t you dare.

Ryan Isaac:
I was about to say we made it through 2020, but I don’t … this will come out like with two weeks left. So …

Matt Mulcock:
Well, there it is. We are officially going to spontaneously combust now that you just said that.

Ryan Isaac:
We might spontaneously combust. That’s really true. So, we made it this far, I guess I could say, through 2020. We’re going to give you a 2020 end of the year checklist of some financial stuff to do. That’s the technical term.

Matt Mulcock:
Because who does not love a good checklist?

Ryan Isaac:
Who doesn’t love … I love checklists.

Matt Mulcock:
I actually do too, full disclosure.

Ryan Isaac:
We’re going to talk about an end of year checklist. These are some financial things that you might want to think about doing that have deadlines. We’re going to talk about the deadlines. The bigger list is the deadlines for the end of the year, the end of the calendar year of December 31st, if you follow that calendar year, maybe some other people follow an old Incan or-

Matt Mulcock:
Maybe you don’t yeah. [crosstalk 00:03:23] Mayan calendar or something.

Ryan Isaac:
Yeah, maybe. But these are … we’re going to go through this. And by the way, if you … we did a webinar on this last week. So, if you go to dentistadvisors.com and go to the webinar section, there is this webinar. It’s a little more interactive because we have our screen to share. And we’ve got … last week, we had an audience of, I think, over a hundred people. And so we had some good questions in there too that might be your questions. You might have the same questions that they had.

Ryan Isaac:
Let’s start talking about some of these things here. Some of these things might be issues that you bring up with your CPA because a lot of them are tax issues. These are things you might want to involve your payroll person in the process, because they do involve payroll. But let’s just start going down the list.

Matt Mulcock:
That was like the fine print, right? Like we are not CPAs [crosstalk 00:04:13]-

Ryan Isaac:
We’re not CPAs and we don’t do your payroll. Sometimes I wish we did, honestly, because it would give us better data to understanding some things that we don’t have access to sometimes. But I don’t want to do that job. So, anyway.

Matt Mulcock:
But we don’t want to.

Ryan Isaac:
But we’re not going to go there. All right-

Matt Mulcock:
But we’re not going to do that so don’t ask.

Ryan Isaac:
Number one, and this is going to … I mean, this is kind of like a normal thing every year, but this year is interesting because many people stopped contributing to their retirement plans, we’re talking about simple IRAs and 401ks. But your retirement plan contributions, the stuff that comes out of your paycheck, we’re going to talk about the ones that are different, like profit sharing or pensions, cash balance later. The stuff that comes out of your paycheck, usually that’s … in most dentists’ cases, that’s a simple IRA or a 401k. That’s got to be done. It’s got to be recorded on a payroll on or before December 31st. Now, the money, of course, the payroll might get processed as of December 31st and then hit the bank a few days later. But on payroll records … that’s why we were saying talk to your payroll person, on payroll records it has to be recorded that it was taken out of your paycheck on or before December 31st. So, if you, how this apply … I think a lot of people are going to be short on max funding their retirement plans this year. So, if you have a simple IRA or 401k and during the shutdown, March through … depending on when you were … almost June … June for some people, right? Was it that long for some people?

Matt Mulcock:
Yeah, I think so. It was like between … I think as late as June, but it was like March, April, May.

Ryan Isaac:
So wild. So, some people … March, April, May, June maybe, they stopped taking a W2. Not everyone did. Some people did. And therefore they have a few months worth of deductions that did not happen in their retirement plan. So make sure you do that. I was going to say, the end authority on this … so if you have a 401k, you might have like four people involved. Let’s see you have a 401k, you might have a third party administrator, you got a CPA, you might have a financial advisor attached to the 401k, and then you got your payroll People. The people who really have the definitive, official record of how much has been deferred this year is your payroll person.

Matt Mulcock:
Ding, ding, ding, they’re the winner. They’re the winner.

Ryan Isaac:
Yeah, they win. It’s kind of a weird, frustrating thing as a financial advisor with … same with simple IRAs. Anything that gets recorded deducted from your paycheck, sometimes frustrating as a financial advisor because we as advisors see the money that comes in. But depending on the bank that people use, sometimes they’re just like chunks of money. Your deferral’s mixed with your company match. And something that gets deposited on January 6th, the bank doesn’t say that belonged to last year or this year. They don’t care. They just received the money.

Matt Mulcock:
They just see the money come in and they’re just like, “Thanks for the money.”

Ryan Isaac:
“Thanks for the money.” And then the advisor invests it. So, the person who has the actual official documentation of how much you’ve contributed for that calendar year is your payroll person. So, check with them, make sure you’re on track. What are we talking about this year? Simple IRAs, max is 13,500 and a 401k is 19,500. And then there’s catch-up contributions.

Matt Mulcock:
If you’re over the age of 50.

Ryan Isaac:
If you’re over the age of 50. Wee bit older.

Matt Mulcock:
Six grand for each of those.

Ryan Isaac:
It’s pretty cool.

Matt Mulcock:
So, the last thing I’d say on that would be also kids on payroll, if you have kids on payroll. So, this is … we’re talking about you, your spouse, and then kids. They’re not most likely going to be contributing to any plan at the office, but just making sure you’ve processed their payroll by the end of the year. A lot of people wait until December to do just one check. If you’re paying them the $12,000 each for the max for the year, you just want to make sure you’re getting that done before the end of the year as well.

Ryan Isaac:
Yeah. That’s actually one of the bullet points. So, let’s go to that right now.

Matt Mulcock:
Oh, well, I’m just jumping ahead.

Ryan Isaac:
It’s almost like you did a webinar on this for 90 minutes.

Matt Mulcock:
It’s almost like we talked about this already.

Ryan Isaac:
So, yeah. A lot of people have their family members on payroll, spouse and kids, second cousins, twin cousins. Do you have any twin cousins?

Matt Mulcock:
Twin cousins.

Ryan Isaac:
Shout out to [crosstalk 00:08:17]-

Matt Mulcock:
Irish twins.

Ryan Isaac:
And a lot of people are paying them just in one bulk shot, especially kids. They’ll pay them their … give them their dues. Hope those kids are working by the way. I mean again, this might seem intuitive but it’s been a weird year and a lot of people stopped payrolls or a lot of people do these things in like one-time funding. Sometimes they do spouse payrolls that way too. They’ll just pay a spouse their full year’s paycheck at the end of the year, just to max fund the retirement plan. And just make sure you get that done because what … I don’t know when this will come out, but I think it will come out in like two weeks and we’ll have like 15 days left or something in December.

Matt Mulcock:
Isn’t that crazy?

Ryan Isaac:
It’s crazy, yeah.

Matt Mulcock:
Christmas is like three weeks away.

Ryan Isaac:
Yeah. And it’s coming.

Matt Mulcock:
Do we need to talk about Christmas shopping on this list? Like make sure you’re getting that done.

Ryan Isaac:
Make sure … We are going to talk about purchases in the practice.

Matt Mulcock:
Okay. We’ll sprinkle in their Christmas presents during that.

Ryan Isaac:
Yeah, we’ll get there. It’s charitable contributions folks. Charitable contributions, for those that do it, you want to make sure to get that done. That does have a deadline. So, that’s in our list of deadlines, by the end of December 31st. There are some people who like to transfer shares of stock, ETFs, or mutual funds to the charity of their choice. Sometimes charities can receive appreciated shares of mutual funds. Matt, why don’t you tell people why they do that? could be a whole other episode on like charitable giving, but why do people transfer funds to charities?

Matt Mulcock:
Yeah. There’s different tax treatments depending on what you’re giving. So, a standard way to do it is just giving cash. And there’s going to be certain tax treatments for giving cash. A reason why you’d maybe want to do an appreciated asset as opposed to cash would be the getting rid of basically that tax burden when you go to sell that asset. So, for example, you buy an asset, let’s say for a hundred dollars. It then appreciates to $200. You’ve got a hundred dollars in gain. If you go to sell that, that’s a taxable gain to you. But if you donate that instead, there’s no tax liability to you. So, it’s a way for you to kind of take that off the books. You’re donating anyway, and then you can actually buy that asset back with cash you have. And what you’re doing is moving … what we’d call moving your basis up. So, if it’s a long-term hold, you can still buy that at the higher basis and then hold it for the longterm. It’s a strategy some people use.

Ryan Isaac:
Yeah, what they’ll do is let’s say you got 10 grand. You want to donate 10 grand a year. You can move 10 grand of appreciated stock out and then just move the cash back in just buy the stuff in the basis. Maybe you bought the shares really cheap and they had tons of capital gains in them. And now you move them out. Now your capital gains are gone and then-

Matt Mulcock:
You still hold the asset.

Ryan Isaac:
Yeah, still hold the asset.

Matt Mulcock:
You still hold your Tesla stock, Ryan. Don’t worry.

Ryan Isaac:
Yeah, I have triple X leveraged, reverse ETF, shortage [crosstalk 00:11:13], SNP, inverse, double leveraged Tesla options. The thing about moving stock is, most financial institutions need to have recorded that by … it’s usually like December 19th or 20th. It’s earlier than the end of the year, actually. So, it’s kind of like one of the fastest approaching deadlines is transferring appreciated shares of stock or funds out to a charity. So, if you do that, talk to your advisor and get it done. Okay, let’s take a little break. I feel like I need a break here.

Matt Mulcock:
Yeah. The burrito’s sitting heavy.

Ryan Isaac:
It’s sitting heavy. Two things. The burrito is sitting really heavy that I ate just barely and I haven’t had my caffeinated beverage in four days, of my choice.

Matt Mulcock:
That’s impressive, man.

Ryan Isaac:
I need to do some jumping jacks, wake up.

Matt Mulcock:
We need to talk about that.

Ryan Isaac:
We’ll get on that in a second. All right. Well be right back to finish talking about the year end checklist deadlines.

Ryan Isaac:
Matt. It’s time.

Matt Mulcock:
Time for what, Ryan?

Ryan Isaac:
It’s time to book a free consultation dentistadvisors.com. Just click on the big book free consultation button on the homepage and talk to one of our friendly advisors today.

Ryan Isaac:
All right. Back on the checklist train. Checklist train. If you give money to your kids through 529s … and there are some other state ran educational dependent education funds that are not really common nowadays. It’s mostly just 529s that are pretty common. Most states have this deadline of the end of the year. Some, it’s actually a minority of states, let you contribute up until tax filing. So, oftentimes though the contributions through a 529 plan for a lot of people don’t make a big tax difference. I’m trying to think of the scenario.

Matt Mulcock:
Depends on your state.

Ryan Isaac:
Yeah. It depends on your state. Well, no, actually that’s true. Yeah. It depends on your state. And many states actually do give some kind of small tax credit or something like that, like a little credit or-

Matt Mulcock:
Yeah. It’ll be a state … usually it’s a state income deduction, not a federal deduction. So, anyone worrying about getting a federal tax deduction, it doesn’t exist for a 529 on the front end. But state deductions, it varies state by state.

Ryan Isaac:
Yeah. So, if you do 529s, just make sure that your state … you can check it. I mean, just Google it and you can find out when the deadline is. But most states, from when I looked at the list last week, are the end of the year. So 529, other … there’s other dependent education programs through the states but they’re not that common. Most people are 529s.

Matt Mulcock:
And it’s just easier. If you’re going to be funding something like that, it’s just easier to get it done in the year. [crosstalk 00:14:02]-

Ryan Isaac:
This is how my brain thinks of it, man, is like, I’m a very … I’m the person who has to clean out email boxes by Friday and text threads by the end of every day. I don’t like the messiness. So, yes, it is easier. Just feels clean and nice. That’s what I don’t like about some things that have to push into the next year, that we’ll talk about coming up here. Like you have to push them into the next year to fund for the previous year. It bothers me, man. I don’t like it. It bothers me.

Ryan Isaac:
All right. Medical expense deductions. This is something that dentists are constantly telling all of their patients to get done. Get your medical spending in. So, there’s that surgery you’ve always wanted. Like Matt, you’ve got a couple lined up, I think for December? What were they?

Matt Mulcock:
Yeah. The calf implants.

Ryan Isaac:
Calf implants.

Matt Mulcock:
Calf implants, a little lipo. I’m going to get all that done this year.

Ryan Isaac:
Calf and lipo. That’s cool.

Matt Mulcock:
Yeah. I mean, you just got to get ready for … I think 2021 is going to be a good year. So, I want to just make sure I’m ready.

Ryan Isaac:
That’s our new nickname. That’s our new duo nickname. Calf and Lipo. It sounds like a morning show in like a crappy city or something like that. Welcome to Calf and Lipo.

Matt Mulcock:
Calf and Lipo. It’s short for calf implants and liposuction.

Ryan Isaac:
Of course.

Matt Mulcock:
Calf and Lipo. I like that. We’re going to start our own little side show.

Ryan Isaac:
We need a t-shirt. Calf and Lipo.

Matt Mulcock:
Calf and Lipo.

Ryan Isaac:
Yeah, just like you tell your patients, if you have medical things that need to get done, especially as they relate to HSA spending and with your health insurance is really broad these days, but they relate to deductibles, hitting certain deductibles, and out-of-pocket maxes. So, those are always good to know. It’s kind of a weird thing to think. Like sometimes people have a big medical expense here and then they’re like, “Oh, we hit our deductible, so let’s just go-”

Matt Mulcock:
Let’s go crazy.

Ryan Isaac:
Let’s go to the doctor. Calf and lipo and LASIK. New teeth.

Ryan Isaac:
Calf and Lipo are advising you to go take care of that. Take care of those medical expenses.

Matt Mulcock:
Got to make sure you take care of that today.

Ryan Isaac:
We talked about-

Matt Mulcock:
Ryan will get you hooked up. He’s got some contacts.

Ryan Isaac:
I know people who know people. They don’t operate legally. And most of them are operating out of vans. Here’s one that’s not that common either, but some people might do this and it depends on your entity structure. This is definitely a CPA question. But this is income deferral. So, depending on, again, entity structure, the way you do your accounting through those different entities, this isn’t that common. But some people do push income into different years, like receivable income into different years. I’m not your CPA, okay. Like hands up.

Matt Mulcock:
Hands up. Not CPA, just so you know.

Ryan Isaac:
Don’t look at me.

Matt Mulcock:
Hey, don’t talk to me.

Ryan Isaac:
Hey, hey, hey. Don’t look at me that way, I’m not your a CPA. But that is a thing … that’s the deadline, I guess. You know? So, if that did apply to you, if that’s something that sounds familiar, that you’re talking to your CPA with, just know if you’re hearing that and you’re like, I don’t get it, it’s not that common. It’s okay. But it does happen. So, that’s an end of year thing. Taking losses and gains. Matt, what are the situations where people would take losses and gains? How does that apply?

Matt Mulcock:
Yeah. Again, it would be talk to your CPA to see … all these are going to depend on your current tax situation. But there might be a situation where, let’s say in your after-tax brokerage account, you’ve got some losses in some individual positions that you’re holding. So, certain investments you have are sitting at a loss. And again, depending on your tax situation, it might make sense to sell those at a loss, take those losses. You can offset them against other gains that you’ve had to equal out for taxes. You can carry forward. There’s limitations to that, but you can carry forward losses later on. And again, depending on your tax situation, it can make sense to take a short-term loss for a long-term tax benefit potentially.

Ryan Isaac:
So, I was just thinking about this, Matt. One of the things you’re talking about is something called tax loss harvesting, which is a tactic to prioritize taxes a little bit sometimes over investments. But it’s a tax investment tactic. If you want to know what we think about this, this is a whole other subject, but go to the Dentist Advisors discussion group. So, search for that, Dentist Advisors discussion group on Facebook, or go to dentistadvisors.com/group. And you can search in there. Just type in tax loss. And you’ll pull up a video from October 16th, 2020. Yeah, October 16th. And we did a little video.

Ryan Isaac:
Okay, number eight. I like this one. Placing equipment in service. This is a big thing. And actually … was it a podcast we just did with Morgan Hammond?

Matt Mulcock:
Yeah, with Morgan.

Ryan Isaac:
Yeah, it was a podcast. Go to Dentist Money Show and find the latest podcast with Morgan Hammond. If you did not listen to that-

Matt Mulcock:
It’s number 258.

Ryan Isaac:
You have that? You know what that is? 258.

Matt Mulcock:
I think.

Ryan Isaac:
Yeah. There it is.

Matt Mulcock:
Boom.

Ryan Isaac:
How will the economics of 2020 affect your taxes? With Morgan Hammond, episode 258. That was actually a really timely podcast for some end of the year stuff and things to be thinking about as you head into the 2021 year. And on that episode we talked about with Morgan, placing equipment in service. Now he gave us three words … he didn’t make the acronym, I did later and it’s really dumb.

Matt Mulcock:
We did.

Ryan Isaac:
We did. It’s terrible. But he gave us three tips on placing equipment in service by the end of the year. I wasn’t aware of some of these things. Well, what was … our acronym was …

Matt Mulcock:
Dirty.

Ryan Isaac:
It was dirty. D-I-R …

Matt Mulcock:
We added the year.

Ryan Isaac:
The T-Y was like this year. But what was DIR? So, DIR, what does it stand for?

Matt Mulcock:
Oh man. Crap. I just blanked. Do we not know?

Ryan Isaac:
I just totally blanked on it too. DIR. You have to …

Matt Mulcock:
Delivered.

Ryan Isaac:
It has to be delivered, installed …

Matt Mulcock:
And ready.

Ryan Isaac:
And ready for use. There we go. DIR. We’re not editing that out by the way. I want everyone to hear …

Matt Mulcock:
We just blanked.

Ryan Isaac:
I want you to imagine the look me and Matt just gave each other.

Matt Mulcock:
We both looked at each other and just like-

Ryan Isaac:
Eyes got wide.

Matt Mulcock:
I don’t know.

Ryan Isaac:
[crosstalk 00:20:01] idiots. That was your content. No, Morgan Hammond said there’s these three words you have to remember when installing equipment. And they’re important because I hear people say all the time, “Oh, I got to get this thing in and I got to get patients in it. I got to use it on patients before I can deduct it.” Or the opposite. They’ll say like, “Oh, I bought it. It won’t be delivered till February but-”

Matt Mulcock:
Yeah. It’s on its way.

Ryan Isaac:
… I paid for it.

Matt Mulcock:
Amazon Prime, bro.

Ryan Isaac:
Yeah. I put a down payment so I’m going to deduct it. No, no, no. DIR. Delivered, physically delivered, installed, and ready for use. It doesn’t mean you have to actually use it on somebody, but it has to be in ready position for use. DIR. And the TY someone said just to make it a better acronym is this year. DIRTY. DIR this year.

Matt Mulcock:
It’s good.

Ryan Isaac:
Direct.

Matt Mulcock:
I like it.

Ryan Isaac:
Yeah. Delivered, installed. Ready for use this year. DIRTY.

Matt Mulcock:
This year.

Ryan Isaac:
There’s your dirty acronym. Okay.

Matt Mulcock:
Boom. DIRTY.

Ryan Isaac:
Last one I had on my list … Matt, let me know if you had any more, was Roth IRA conversions. If you are converting from a regular IRA to a Roth, or you’re doing what are called Roth reversions back to a Roth … what are some of the other fancy way … people, they call them … back to a Roths and the secret Roths. What are they-

Matt Mulcock:
Mega mega Roth conversions.

Ryan Isaac:
Mega Roths. There’s all these funny names on blogs online. It just … when you convert from an IRA to a Roth, okay. The conversion has to be done in the calendar year though to make it count. So, Roth conversions are the other ones for December 31st. I think that brings us to the end of our pretty immediate list of stuff that has to be done. What do you think?

Matt Mulcock:
The only one I would add, and it was really just a piggyback on one you already mentioned, you said-

Ryan Isaac:
Let’s piggy on my back. [crosstalk 00:21:46].

Matt Mulcock:
I’m going to piggy on that back. I’m going to piggy back on that burrito, that bacon breakfast burrito. So, you’d mentioned deferring income. Kind of along the same lines would be accelerating expenses or deductions. Again, doesn’t happen too often, but it is possible where let’s say you pre-pay something in the office for … you do like a three-year subscription for some tech or just whatever. [crosstalk 00:22:16] Something you can-

Ryan Isaac:
Like prepaying for stuff.

Matt Mulcock:
… possibly pre-pay. Pre-pay. Maybe you want to … and again, talk to your CPA, but there might be reasons why you’d want to pay for things you’d normally pay in 2021 in, but you want to pay for them in 2020. So, it’s for a service in 2021, but you’re paying for it for this year. We call that accelerating deductions.

Ryan Isaac:
Yeah, that’s a good call.

Matt Mulcock:
And it depends on the situation.

Ryan Isaac:
That’s pretty common. People do that.

Matt Mulcock:
That’s more common than deferring income, for sure.

Ryan Isaac:
Yeah. Way more common. I was going to say … well, that’s another subject. We’ll leave it there. That’s great. Okay. Let’s take a quick break. And I’m going to let you go outside into the balmy 34 degrees that you live in. Right? It’s 34 there?

Matt Mulcock:
I’m going to go for quick jog.

Ryan Isaac:
Go for a quick jog. We’re going to come right back. Go build a fire outside, warm up, and then come back in.

Matt Mulcock:
As if I could do that. Come on.

Ryan Isaac:
You don’t know how. I don’t know either. We’ll come back in. We’ll talk about some of the things, shorter list, that are due by your tax filing deadline when we come back.

Matt Mulcock:
What if a podcast listener loves our podcasts and all the things we talk about, but they want to see our faces and go into subjects a little bit deeper?

Ryan Isaac:
Man, it’s amazing you just asked that. The best way to do it is to listen to our webinars. Actually watch the webinars. You and I, as you know because you’re there, cover one subject a month where we both host and we talk about a whole range of things in a lot of detail.

Matt Mulcock:
Yeah. It’s really fun. And we’re going to go into all the topics that we go into on the Dentist Money Show, but go in more depth. Super easy to sign up. Go to dentistadvisors.com, click on webinars under the education library button on the homepage.

Ryan Isaac:
All right. Things due by your tax filing deadline. Now tax filing deadlines, as you know, most people listening … well, business owners listening, you’re going to have multiple tax filing deadlines that technically are at different times of the year. And they can be pushed back. So, you can extend your returns and this does extend the deadlines on some of these things. So, number one thing is your HSA contributions. First of all, depending on your health insurance situation and your actual health insurance needs of your family, a lot of people do have higher deductible plans and we need all … man, we need all of the deductions we can get here, folks. We need the deductions. Okay? So, get your deductions and get your HSAs done. HSAs are a whole other beast we could talk about. A lot of people end up piling up quite a bit of money in their HSAs and they invest the money. Or some people get really fancy and they have the receipt box thing going on. But we won’t talking about that. This isn’t an HSA show.

Matt Mulcock:
That’s a whole other episode.

Ryan Isaac:
This isn’t an HSA show.

Matt Mulcock:
I do like that strategy, let me tell you.

Ryan Isaac:
You like it. It feels really complicated to me.

Matt Mulcock:
I enjoy it

Ryan Isaac:
And I guarantee I’m losing that box of papers at some point. That’s the problem with me. I guess you could digitize them though. Right?

Matt Mulcock:
Totally.

Ryan Isaac:
Digitize that stuff. All right.

Matt Mulcock:
Digitize it.

Ryan Isaac:
Digitize. Okay. For those of you who have bigger retirement plans at the office, like profit sharing plans, pensions, and cash balance plans, also known as defined benefit plans, the pensions, those aren’t due until your tax filing deadline. And they can’t even be officially, technically computed, like with official numbers calculated until January 1st and beyond. So, you have to wait.

Matt Mulcock:
Usually beyond, yeah.

Ryan Isaac:
Yeah, you have to wait until the end of the year is done because they need official end of the year census records and payroll records and income records to calculate those. But then you have until your tax filing to fund those accounts. Some people, when they’re consistently doing a profit sharing … and I like this for clients that do it year over year and especially when it’s like a cash balance, you know you’re going to fund it because you don’t have a choice. When we kind of have a range, especially in the pension world and cash balance world, they give you these ranges of what you need to hit. They give you ideals and they give you ranges.

Ryan Isaac:
I like pre-funding that through the previous year, not trying to get to the max because you don’t want to accidentally over-fund for some reason. Because you run the numbers at the end of the year, and if you had a huge year, they’re like, “Oops, sorry. Your accounts grew so much that we … ” But I like the idea of pre-funding it a little bit, maybe 50, 60, maybe 70% of what you think it’s going to be the previous year so you don’t have a gigantic chunk that you have to put in later. But anyway, so profit sharing, pensions, cash balance, defined benefit. Those all are due by your tax filing deadline, which could be the spring or the fall, depending when you choose to file your tax returns.

Matt Mulcock:
It’s like paying quarterlies, right?

Ryan Isaac:
Yes.

Matt Mulcock:
You don’t want that big surprise at the end.

Ryan Isaac:
Same principles.

Matt Mulcock:
So, there’s different ways to do it. But try to … I would try to get a percentage in each month. It’s just … like any saving strategy, making is as automatic as possible is going to be better.

Ryan Isaac:
Well, and it kind of gets hard when you know, all right, we’re going to do a hundred grand in the profit sharing or the pension next year. And so, let’s just sit on a hundred grand of cash all year. It’s like, I kind of … let’s get as much of that invested as possible before it comes up. Makes sense to me. Okay. Funding IRAs, Roth IRAs, SEP IRAs, and … are there any other kinds of IRAs? Kids’ IRAs? So, personal IRAs, like traditional IRAs, personal Roths, SEPs, which is a weird one because a SEP IRA is kind of like a corporate retirement plan, but its funding is up until tax time. Because you don’t fund a SEP IRA through your payroll contributions. That’s the difference. That’s the difference between a SEP and then a simple and a 401k. A simple and a 401k, you contribute through your payroll. And the SEP, it’s not. It’s calculated on your payroll and your income partly, but the deadline’s different. So, regular IRAs, Roths, SEPs, and kids’ IRAs, the deadline, you’ve got time. You’ve got time until you file your taxes and then you don’t have time.

Matt Mulcock:
And then it’s over.

Ryan Isaac:
Then it’s over, folks.

Matt Mulcock:
But if you’re like a 1099 … we talk to people all the time that are a 1099 associate. We come across this all the time. A great tax planning tool is the SEP IRA. You can wait, again, until your tax filing deadline. You can kind of review with your CPA what your tax situation looks like. You can literally set it up and fund it the day of, like the day you’re filing your taxes.

Ryan Isaac:
Yeah. I love SEPs. Yeah. For any associate out there that’s a 1099 … or it gets a little trickier when you have multiple places one might be a 1099 and maybe work somewhere else that’s a W2. Check with your advisor and your CPA to make sure you do it legally, that you’re not illegally excluding employees from one entity.

Matt Mulcock:
We don’t advocate for illegal shenanigans on this show.

Ryan Isaac:
Look, here’s the thing, this is not going to be shocking or maybe it will be, the IRS figured out decades ago that people would set up separate entities to exclude employees in another. They figured it out, folks.

Matt Mulcock:
Yeah. Weird.

Ryan Isaac:
They thought of it. A long time ago.

Matt Mulcock:
Just as a general rule, you can pretty much just … this is a general principle, IRS principle, that if you’re ever thinking, do you think the IRS has figured this out? The answer is yes, they have figured it.

Ryan Isaac:
Yeah because we’re all thinking, this would be a good way to save money from the IRS. And they’re thinking, with a lot more resources than we have, how do we get more money from these people?

Matt Mulcock:
Totally.

Ryan Isaac:
So, they thought of it. So, it gets a little tricky, but it’s easy. Like if you’re an associate, like a straight up associate 1099, no other entities, no employees, man, SEPs are great tools. Talk to your advisor, your CPA about it first, but they’re great tools and they’re really flexible. And you can kind of just do it year to year and see how she goes. Although I guess here’s what you would say about a SEP though, it’s interesting. The SEP’s based on your income from the previous year.

Matt Mulcock:
Income.

Ryan Isaac:
So, any income that you need to make or adjust or set to show for the SEP, should be done before the end of December 31st.

Matt Mulcock:
That’s a good point. That’s a good distinction to make.

Ryan Isaac:
But we covered that.

Matt Mulcock:
You can’t change those numbers.

Ryan Isaac:
You can’t change it. You can’t go to your payroll person in June and be like, “Oh yeah, can you change the December 31st payroll?” I don’t know, maybe they can adjust them. I don’t-

Matt Mulcock:
Maybe they could. Maybe they could.

Ryan Isaac:
[crosstalk 00:30:22] Again, we’re not your payroll people.

Matt Mulcock:
Talk to your … Hey!

Ryan Isaac:
Hey, hey, hey.

Matt Mulcock:
Hands up. We’re not your CPA. But that is true. It’s a good distinction. The percentage is based on your income that you paid yourself, that’s subject to payroll tax. So, keep that in mind.

Ryan Isaac:
You got a tax payment coming up, your quarterlies, those are … that’s another deadline for tax returns. But there are some estimateds that are due at certain periods of time earlier. That got brought up on the webinar.

Matt Mulcock:
I was going to say, we sort of missed that one a little. I mean, sort of. But I think it would be … just make sure that you’re … we’re backtracking a little.

Ryan Isaac:
Got you.

Matt Mulcock:
The one prior to the end of the year, make sure you’re sitting down with your … I would imagine most people are. I hope so. If your CPA’s not sitting down with you to do Q4 tax planning and getting ready for the … making sure that you’re at least up to date on your quarterlies, get a new CPA.

Ryan Isaac:
Force it to happen. Make it happen.

Matt Mulcock:
Yeah.

Ryan Isaac:
Make it happen. You guys, thanks for listening and tuning in. Hopefully this list … this is going to come out with only a couple of weeks left in the year. So, if you’re hearing this-

Matt Mulcock:
It’s a sprint.

Ryan Isaac:
sprint to the finish, guys. Get this stuff done. And if you have any questions for us, there’s a few ways you can pose your questions. This is so great. Okay. The world moves on. It’s fantastic. I’m going to lift some weights here.

Matt Mulcock:
So many options.

Ryan Isaac:
Here’s the options you got. Option number one is you kind of just want to like at arms length, you don’t want us to bug ya. You don’t want to talk to a human on the phone.

Matt Mulcock:
Yeah. Which is fine. I respect it.

Ryan Isaac:
I get that.

Matt Mulcock:
It’s 2020

Ryan Isaac:
Go to our Facebook group, dentistadvisors.com/group or search on Facebook for the Dentist Advisors discussion group. We need a different name, I swear. But until then.

Matt Mulcock:
It’s a lot. It’s a mouthful.

Ryan Isaac:
Post a question and we will answer directly and we’ll make a video of it and we’ll answer your question. And we appreciate those questions. Those are great. Also, if you’re daring, you can just call us. You can go to the website, dentistadvisors.com, schedule a time-

Matt Mulcock:
Scary!

Ryan Isaac:
Big button, schedule a time, and you’ll get … I promise you will get an extremely friendly financial advisor on the phone to answer your questions, point you in the right direction.

Matt Mulcock:
It’s true.

Ryan Isaac:
And we’ll talk to you like-

Matt Mulcock:
Because we don’t hire unfriendly people.

Ryan Isaac:
We don’t hire unfriendly people. And all we do is work with dentists. So, we know your stuff. And we see these questions from hundreds of people all year long and it’s all we do. So, call us and you’ll get someone friendly on the phone and we can chat with you and point you in the right direction. So, if you’re listening to this at the time it comes out, this is probably the … probably not the last one for the year, but we’re getting close. So, hope everyone’s doing okay.

Matt Mulcock:
Wait. You didn’t get the final option.

Ryan Isaac:
What was the final option? [crosstalk 00:32:52] directly?

Matt Mulcock:
The final options for … So, well, yeah, so we’re going like kind of down the spectrum of being a personal [crosstalk 00:32:58]. So, it’s like, okay, arms length. You don’t want to talk to us. Facebook group.

Ryan Isaac:
Then book a call.

Matt Mulcock:
Book a call. And then the third is I’m going to post Ryan’s address in the show notes. And then you can just show up at his house and have a little drink and hang out.

Ryan Isaac:
You can do that. Well, actually we’ll just one up it. I will meet anyone in person for any consultation on the ocean, on a surfboard.

Matt Mulcock:
There you go.

Ryan Isaac:
Anybody, anybody.

Matt Mulcock:
Or come out to Utah for me and I’ll take you skiing.

Ryan Isaac:
Matt will meet you on the mountain.

Matt Mulcock:
I’ll take you skiing.

Ryan Isaac:
The mountain will meet you on the mountain. And I will-

Matt Mulcock:
I will.

Ryan Isaac:
Now I’m new at this, and so don’t make fun of me, my surfing, okay? But I love it and I’m trying really hard. I’ll meet you on the water. And then we can do personal meetings if you want.

Matt Mulcock:
Yes.

Ryan Isaac:
That is the-

Matt Mulcock:
You know, we’re making promises here, so people might take us up on this.

Ryan Isaac:
I’ll do it. No, I will 100% do it.

Matt Mulcock:
I will do it.

Ryan Isaac:
I will totally do it.

Matt Mulcock:
You go to California with Ryan, you come to Utah with me, and we’ll have some fun.

Ryan Isaac:
We’ll do that. You guys, hopefully the year is ending okay for everyone and you’re staying warm or staying cool. I don’t know, whatever your preference is, do your thing-

Matt Mulcock:
Wherever you are.

Ryan Isaac:
You do you. But thanks for joining us. Thanks for the support. A whole other year has gone by of the Dentist Money Show and it’s been awesome and we’ve gotten great questions and I hope, we hope, that it’s been helpful to you and that it’s a good resource. And if it is, and you know other dentists, you want to share it with them, shoot them a link, be like, “Hey, check out this podcast. Here’s an episode for you buddy. Merry Christmas, happy holidays.”

Matt Mulcock:
Buddy.

Ryan Isaac:
Give them one of that. But thanks for joining us-

Matt Mulcock:
Put it in your bean.

Ryan Isaac:
Cover your bean. Keep your bean warm. Happy holidays. We’ll talk to you guys later. Till next time.

 

 

Taxes