DMD Staff

The tax year will end in a few short weeks. But if you’re like most taxpayers, you won’t even think about your personal income tax payments until late January at the earliest, or late April for the true slackers! But there is some benefit to thinking about your 2016 taxes within the next few weeks. There are some things you can do between now and the end of the year to positively affect your tax burden for the year. 

(As always with tax information, this article is for informational purposes only and should not be considered tax advice.)

Let’s start with when you do your taxes. Many taxpayers use their tax withholdings as a sort of mini-savings plan, putting aside too much throughout the year so that they’ll get a refund. If this is part of your strategy, you will want to file your taxes as soon as possible to regain control of those funds you’ve been loaning, interest-free, to the Federal and State governments. Overpayment throughout the year is a bad financial idea that awards interest to your Uncle Sam that should be going to you. While that interest is unlikely to make a huge difference to your bottom line in any one year, over time, everything adds up.

	That aside, here are some steps to take now.

	Some work now can help you make sure you get the most from your tax deductions. Around the holidays, many are thinking of making charitable donations. While lowering your tax responsibility is rarely the primary impetus for such donations, you can positively affect your tax responsibility if you make your donation by December 31. If there’s no more room under the stairs to hide Santa’s upcoming delivery, clean out your closets and make donations of clothes, furniture, old appliances, and anything else you no longer need or want. Make your donations to a qualified organization, as 

	Also be sure to obtain receipts for non-cash donations. Despite what many think, charitable contributions aren’t typically at the top of the list of items in your filed return that can trigger an audit from the IRS, but exaggerating or inventing donations is both immoral and a bad idea. And any 

at the top of the IRS’ list for triggering an audit.

	Donations don’t have to only be in the form of cash or goods. You can also donate investments, such as shares of a stock, and take a deduction based on the full market value at the time of the gift. There are some restrictions on doing this, and the transaction can be a little more complicated. If you work with an advisor, talk to them about the best way to make this kind of donation and what it will mean for your tax liability.

	You know that the interest you pay on your mortgage is tax deductible, but what you might not know is that if you’re in position to do so, you can pay 2017’s January mortgage bill and deduct that interest in 2016, as long as the payment is made by December 31. The same is true for property tax payments, which you can make in advance as well.

	When it comes to your taxes, like anything else, advance preparation can pay dividends. 

Articles

There are some things you can do between now and the end of the year to positively affect your tax burden for the year. Here is an overview.

End-of-Year Strategies: Simple Tax Tips

We write often about the pros and cons of working with an advisor. Among the significant pros is not having to spend a lot of time poring over financial statements and not having to know the nitty-gritty details of all of your investments. This can be a particular bonus for busy dentists.

	But one of the cons is that you still need to check under the hood now and again. The old stratagem of “trust, but verify” should be your mantra when it comes to working with anyone regarding your finances. Even if you’ve worked successfully with the same individual or company over the years, you’ll want to do a review, and the end of the year is a great time to do so. What should you look at? In short: your tax situation, your budget, your investment performance, and your current level of diversification. Let’s take a closer look.

	Investing for retirement is a marathon, not a sprint, right? Theoretically, then, your financial goals shouldn’t change dramatically from year to year. In reality, though, they often do. Maybe a big leap in practice income has changed your financial standing. Maybe a huge unexpected health issue has come up. Maybe there was a change in junior’s plans that now involve a sudden need for swift accruement of a college savings account.

	This year’s performance and next year’s goals may seem like two very different things, but they’re linked. Investment performance that exceeds--or conversely, fails to meet--the goals established don’t necessarily require annual adjustments. But you and your advisor should always be aware of the recent performance data and vigilant about any possible adjustments that need to be made.

	Market fluctuations are a natural and unavoidable aspect of investing, so a small dip in some investments is not necessarily cause for alarm. But sometimes our investments drift slowly away from our financial goals over time, in increments nearly too small to notice. Take some time with your advisor to make sure you’re still on track.

	In April 2017, the first provisions of the Department of Labor’s Conflict of Interest rule will take effect. In short, this may change how your financial advisor works with you, the disclosures he or she is required to make, and the need for your advisor to work in a “fiduciary” capacity as opposed to simply recommending investments that are “suitable.” Make sure you understand in advance how the relationship will change and what changes complying with the new regulation might mean to the commissions and fees your advisor charges. Look at 2016 transaction fees to make sure what you’re paying is appropriate for the services delivered.

	Any advisor worth their salt will have a good grasp of current financial indicators and how those may play out in the year to come. This is particularly important in the uncertain economic times that may result from the election of Donald Trump. It may not necessarily mean you’ll need to make seismic shifts in your investment strategy. But it may mean making some changes to your investment mix.

	The end of the year can be hectic, but a good, attentive advisor will make the time to ensure that the partnership is proceeding on solid ground. 

With the approaching New Year, now is the perfect time for a status check on your financial advisor. You should examine your tax situation, your budget, your investment performance, and your current level of diversification.

Year-End Strategies: Evaluating Your Advisor

Derek Pearson is the VP of Business Development at Banyan. Here, he explains how to stay HIPAA compliant with your practice’s social media.

 Keeping Your Dental Practice's Social Media HIPAA Compliant

Derek Pearson is the VP of Business Development at Banyan, a company dedicated to improving social media performance for dentists. Here, he explains how to stay HIPAA compliant with your practice’s social media.

Interview Transcript (slightly modified for readability)

“The best tip I can give for a practice to stay HIPAA compliant is put a system in place that can be pretty automated. When things are automated, you don’t forget. You don’t lose track of what you’re supposed to be doing. Put a system in place and make sure that you’re following it consistently, that your team knows it.

We’ve created that electronically. Our technology allows you to take a photo, it prompts a HIPAA media release, and then you can share directly to your Facebook pages. Otherwise, you need the HIPAA compliance, the privacy form, the consent releases, you need all of those signed, you need to back them up, you need to scan them. It can be a tedious process for a dental practice and it can take up to 15 minutes. Fifteen minutes is a long time in a dental practice. You take a photo Monday, if it takes 15 minutes, it might not be posted until Friday. Look at technologies that can help eliminate the busy work of it and make it more efficient, like ours, and help you do social media in the right way.”

Videos

Derek Pearson is the VP of Business Development at Banyan, a company dedicated to improving social media performance for dentists. Here, he explains how to stay HIPAA compliant with your practice's social media.

Keeping Your Dental Practice's Social Media HIPAA Compliant

The holiday season comes on quickly and seems to depart just as fast. It may seem like the Halloween bowls finally reached their bottoms, but the simple truth is that there are less than 3 shopping weeks left, and less than a month until we welcome 2017. The financial sins of 2016, if indeed there were any, are just about in the rearview mirror, and the opportunity to get on a productive financial course is right at your fingertips.

Let’s take a look at a few simple steps to hitting the ground running in 2017.

Budgeting isn’t everyone’s strong suit, and you may be getting by just fine without one. But as the calendar changes over, consider developing at least a basic budget, even if you don’t look at it every day and don’t account for every dollar of income and expenditure. No budget is perfect, but fortunately, none has to be. But a sound budget can be not only the roadmap to a successful financial future, but also the foundation for it.

During the dog days of winter, before the allure of spring takes you back outside, take a quick glance at 2016, including what went well and what you’d like to have done differently. While you’re at it, take advantage of one of the free credit report services--preferably at 

-- to do a maintenance check on your credit rating. (Other companies that advertise free credit reports often engage in a bait-and-switch in which people who don’t read the fine print closely are enrolled in clubs and other nonsense that ultimately lead to charges.) Check your reports for inaccuracies and alarm bells, and have a general sense of your credit rating, which can affect borrowing power and overall credit availability.

But here’s the thing: Don’t get too caught up in what happened last year. Mistakes made then were last year’s mistakes. If they hurt, be determined to do better in 2017. Always keep in mind, though, that retirement investing is a long-haul endeavor. There will be roadblocks along the way. Keep moving, and you’ll get where you need to be.

Consider that the two biggest fears of working with an advisor--fear of stepping out of your comfort zone and a lack of trust giving access to outside persons--can both be overcome through time and effort. Working with the right professional can be an important step in this year’s financial journey. The beginning of the year is a good time to think about this, because your advisor may also be able to provide some tax guidance, which will come in handy over the next few months.

If you didn’t get a chance to do it last year, look at your insurance coverage and make sure your beneficiaries are updated and that your coverage still reflects your needs. Loyalty to one fine insurance company may be important to you, but it never hurts to shop around and find out what other insurers are charging for policies similar to yours. If nothing else, you can go to your current insurer, explain that you’d like them to keep your business, but ask for lower costs comparable to other reputable companies. 

Follow these steps to hit the ground running financially in 2017.

End of Year Strategies: Fresh Start for 2017

Derek Pearson is the VP of Business Development at Banyan, a company dedicated to improving social media performance for dentists. Here, he explains which social media platforms tend to be the most effective for promoting dentistry.

Interview Transcript (slightly modified for readability) 

I think, at the end of the day, not many dentists want to do social media. The ones who do and get it are really, really successful at it. They understand it and things blow up for them. They go great, right? The ones who try to do it all, typically I tell the dentists, ‘You don’t need to personally do this. Hire someone. Find someone who knows social media to do it for you. And you don’t have to do all of them. If you want to hit certain demographics, try it out, experiment with it, but ultimately, at the end of the day, Facebook is by far the biggest one. Instagram is going to be number two. Twitter is really hard to do for a dentist but if you do it right, you can be effective with it. It just takes a lot of time and energy, where Facebook and Instagram are going to be a little bit easier and a lot more effective. And YouTube, even though it’s not fully a social media platform, YouTube videos are huge for dentists. They help your SEO—where you rank on Google, they help tremendously. But by far, Facebook is the most impactful.

The Best Social Media Platforms for Dentists

, we outlined the importance of making sure you’re on the same page with your partner regarding 2017 financial plans. This is true of family partners and of financial planning partners. Primary among those communication needs is getting past the discomfort or laziness associated with simply not communicating, and scheduling some regular time to not only discuss your financial goals, but also measure your progress.

	In Part 2, we’ll look at some slightly more obscure but no less important steps, including one that many investors overlook.

	Most of us hate chores, myself included. But one that I generally like is ironing clothes. The reason for that, I think, is that it yields an immediate and obvious reward. A shirt that was hideously wrinkled is now miraculously crisp and ready to wear. Gardening was never a hobby of mine. Too much work for too little—and too delayed&mdash;a payoff.

	One key reason investing over the long haul is such a challenge is that the rewards for doing so are not immediately obvious. There is nothing more rewarding than an impulse buy. See. Want. Have. But often, those impulse buys prove unsatisfying, and they can derail a long-term investment strategy.

	One way to avoid this is to create a rewards system for you and your partner for taking the more difficult, less immediately gratifying road. Maybe your reward is a short, on-budget getaway to a place you’ve always wanted to visit. Maybe it’s an extra day off from the rigors of dental care each week in the month of August. Maybe it’s as simple as a favorite meal prepared together, a hike in a nearby reserve, or a special bottle of wine saved for the right occasion. Giving yourself a little positive feedback now and again is often as important as any feedback you get from watching your investments grow. That growth will likely be slow and unsatisfying. Planning a small rewards system is an excellent way to keep on track without feeling like you’re living a life of austerity.

	As a dentist, you may be the primary earner in any relationship, but that doesn’t necessarily give you the full authority over every financial decision. Hold your ground on the issues of greatest importance to you, but allow your partner to do the same.

	Sometimes, the best aspect of a good compromise is simply sending the message that the other person’s input is important, too. That can often lead to better communication, and better retirement planning, down the road. 

In Part 2, we examine more obscure but no less important steps, including one that many investors overlook.

End of Year Strategies: Coordinate Your Financial Plans (Part 2)

. That column introduced the concept of the solo artist (making most investing decisions alone), the power duo (working almost exclusively with a partner, which could be a financial planner or a life partner) and the ensemble band (a team of people assembled for investment decisions). Most investors fall under the latter two categories, even if they are the primary breadwinner, as dentists often are.

For the true solo artist, this column may be slightly less germane. But for the main two categories, one key end-of-year strategy is to make sure you’re on the same page with the other members of the team.

As you look back on your financial year and plan for 2016, have you done so in a vacuum? Or have you consulted the other affected parties? If it’s the former, great; keep up the good work. If it’s the latter, your financial plans are at greater risk. Further, frustration or feelings of resentment can creep in to your key relationships. Studies consistently show that the biggest factor in most marital strife is financial issues. Here are a few ways to communicate better with those who will affect, be affected by, and share in your decision-making.

At any stage of life, money can be a difficult issue for people to talk about with others, even within their own family. Address the issue head-on by committing to communicating with your partner and family members. Like other forms of inertia, avoidance can become engrained. But it only takes one action on your part to get the objects in question—in this case, you and your partner&mdash;into motion.

Start with the basics: Are you and your partner on the same page in understanding your financial situation? Are their goals the same as yours, or at least complementary to yours? Not all family members or partners have to be in complete agreement on every line item in a budget or every financial decision, but having any potential issues out in the open will help you avoid conflicts, festering resentment, and overall uncertainty about your financial past. Such discussions can not only be productive, but they can also get you thinking about your own spending habits and goals. That’s a win-win.  

This may sound unnecessary, but it really works. Schedule some time each week or month to get together with your partner to discuss financial issues, including the budget versus the actual spending for the previous month, any “unanticipated” items that impacted the budget, and any new situations arising that could affect the budget and savings goals in the future. Once or twice a year, schedule a longer session to go over larger goals and review life priorities. End of year may not be the best time, given other priorities, but it may be helpful just to get something on the calendar for the dead days of February. If that seems too late to set a financial plan for 2017, consider that the alternative of not setting a plan at all is infinitely counterproductive.

In part 2, we’ll look at a few outside the box strategies for enhancing your communications.

Talk over your goals to make sure they're shared.

End of Year Strategies: Coordinate Your Financial Plans

Derek Pearson is the VP of Business Development at Banyan, a company dedicated to improving social media performance for dentists. Here, he explains why social media has become a new way for dentists to attract new patients.

“I’ve talked to a lot of doctors where Facebook is their new source of patients. It’s where they get their most patients from, it’s through social media—Facebook, Instagram. And it’s because it’s the new form of word of mouth. Dentists understand how important word-of-mouth marketing is--their patients talking to their friends and family about it. Now with social media you can actually put that online. Instead of them talking to 2 or 3 of their friends, they’re talking to hundreds of their friends, just through that photo and it starts this engaging conversation based around your practice.”

Social Media is the New Word of Mouth for Dentistry

In this clip, Dr. Zuckerberg reflects on how far technology in the dental practice has come from its humble beginnings.

Revisiting the Early Days of Tech in Dentistry

Ed Zuckerberg, DDS, is the founder of Painless Social Media, a company geared toward bringing in new clients and bolstering relationships with existing ones. He’s also the father of Facebook founder and CEO Mark Zuckerberg. In this clip, Dr. Zuckerberg reflects on how far technology in the dental practice has come from its humble beginnings.

“I’ve been blessed with a vision of being able to look at some of the technologies and just go, ‘Wow, that’s really useful, that’s going to be great.’ And at other technologies, and say, ‘I’m not quite sure. Maybe it will work. Maybe it won’t.’ Not everybody has that vision of being able to look at something. I took advantage of that, kind of accidentally. Happened to be in the right place at the right time a few places along the way.

Back in 1981, when we bought our home in Westchester County, New York. Interest rates were challenging, to say the least. Mortgage rates were like 17, 18 percent. I fell into a relationship with Citi Bank at the time because they were the only one who were writing mortgages in the New York area. They actually had a pilot online banking program. I had an Atari 800 computer back than and they had a modem that plugged into the Atari and I did a ridiculous online banking session back in 1981 where I paid 3 bills to major utilities in over an hour. My wife was completely unimpressed, stating she could write the checks in 5 minutes. Yet I saw then that that was going to change the way that things are done. I was very excited when PC Store opened up the IBM produce center back in 1985 and even though $10,000 back then bought me a horribly pathetic computer that couldn’t store one of today’s digital photos, and dental practice-management software that was just God awful, but I learned what was bad, and it helped me look for what I wanted.

Along the way, I wasn’t afraid to jump in. New technology would have its place and was just fortunate enough to go with my gut instincts.

I remember I had a lot of resistance back in 1988, I think, is when I actually had the concept of putting computers in the operatories. There were very few clinical needs for computers in the operatories in the late ‘80s. We had a perio charting system that I replaced my hand charting system with. We went to a digital appointment book. Took a lot of flak from the staff members that I was taking away their big, double fold open appointment book. But it was kind of like, I got frustrated. And my frustrations led me to look for solutions. Being in the back, answering the phone, wanting to check the schedule and make an appointment for someone and having someone else have the appointment book tied up while they’re on the phone, that frustrated me.

Looking for ways to do things like that, trying technologies like air abrasion, which never really caught on great, but actually had a place in my practice where I was painless Dr. Z. Having a drill-free alternative fit into a list of phobias that my wife, who’s a psychiatrist, and I worked together on to really develop strategy for making the patient experience comfortable, for patients no matter what their phobia was. The noise of the drill, the smell of chemicals in the office, the appearance of people in white coats. Painful dentistry itself was the problem, and making the dental experience comfortable. Each step along the way, fortunately, helped us achieve our goals.”

Ed Zuckerberg, DDS, is the founder of Painless Social Media, a company geared toward bringing in new clients and bolstering relationships with existing ones. He's also the father of Facebook founder and CEO Mark Zuckerberg. In this clip, Dr. Zuckerberg reflects on how far technology in the dental practice has come from its humble beginnings.

, we covered the absolute bare minimum of what you can do now to promote good health in retirement: stay active and eat right. Truth be told, if you do those 2 things, you’ve got a really good chance to enter your post-dentist years in reasonably good health.

But there are a number of other factors at play, and a few other things you’ll want to do to make sure you don’t end up losing a lot of your retirement income due to poor health. How big a danger is it? A study 

 by Fidelity investments found that a typical person will spend about $130,000 during retirement to cover your health care expenses. Go ahead and double that if you have a spouse or partner. And quadruple it or quintuple it if you enter retirement with significant health concerns.

Investment Vehicles: The Good, The Bad, and The Ugly

Don’t panic. Those numbers are not annual; they are over the course of your entire retirement. But don’t ignore the situation, either. Here are some more tips for entering retirement as healthy as you can.

Exercising and eating right are 2 forms of prevention, but no one knows better than a dentist how important regular “healthy checkups” can be. Put any professional rivalry aside, and make sure to see your friendly neighborhood physician on a regular basis. You can swap patient stories, for sure, but more important, you can make sure the regular maintenance, such as prostate exams annually after age 50, gets taken care of.

Don’t Limit the Exercise to that Buff Bod

Building those bulging biceps is great, but you’ll want to work the brain, too. I have my doubts about those services that promise to keep your mind sharp through brainteasers, but it’s generally accepted that an active brain can reduce the onset of dementia and diseases that affect the memory. There is some research showing that such brain wave stimulators can help fend off some symptoms of depression as well.

End of Year Strategies: Take Stock as You Near Retirement

It’s easy for people who spend their working hours among many people to wall themselves off during off-hours. But maintaining robust friendships can lead to greater emotional health, among many other benefits. It can be a great stress-reliever as well, which can lead to greater physical health.

If you are having medical problems, hopefully you got an early diagnosis, which in the case of almost every condition known to man increases the chances of preventing disease spread and minimizing the effects of the disease. Don’t just assume that health issues will resolve themselves. Be aggressive in pursuing treatment for those conditions that require it.

Catching any medical issues early can prevent them from turning into huge—and costly&mdash;issues later. If you haven’t already done so, take a close look at your medical benefits and make sure you plan matches your needs.

Part of maintaining good health through your retirement years is the simple luck of the draw. You can take all these steps and more, be diligent about your health and your care, and still end up in poor health. But there are things you can do to promote good health that will pay off now and when you retire. You have every reason to consider them.

Things you can do now to promote good health later.