THE MILLIONAIRE DENTIST™

Tax Troubles and Unexpected Expenses: Protect Your Dental Practice

EPISODE TRANSCRIPTION

Announcer:
Hello, everyone. Welcome to The Millionaire Dentist podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances, and business practices to help you become the millionaire dentist you deserve to be. Please be advised we do speak with an honest tongue that may not be safe for work.

Casey Hiers:
Hello and welcome. This is Casey Hiers back at The Millionaire Dentist podcast in studio with co-host Jarrod Bridgeman.

Jarrod Bridgeman:
Okay. Well, you're not in studio, Casey. You're calling.

Casey Hiers:
That is fact.

Jarrod Bridgeman:
You're calling on the phone.

Casey Hiers:
That is factual. I am not in our swanky podcast studio with rich leather and mahogany.

Jarrod Bridgeman:
Yes, in our cigar lounge.

Casey Hiers:
Yeah, of course.

Jarrod Bridgeman:
Well, Casey, I just wanted to say I haven't seen you really since before the break, but I hope you had a great Thanksgiving. Did you have a good time with your family?

Casey Hiers:
It was nice. We had two Thanksgivings. One my sister's, one at my wife's sisters. Got to see some friends. It was restful, relaxing, lots of fun. How about you?

Jarrod Bridgeman:
It was good. We had one with my mom's side and then one with my dad's side. It was pretty good. I made my new signature dish. I make a wasabi deviled egg. A thing with soy sauce and ginger and stuff like that, and it's a pretty big hit. So that's-

Casey Hiers:
How long you been making that?

Jarrod Bridgeman:
This is my third year making it.

Casey Hiers:
Okay. And it is a big hit, not just a self-proclaimed big hit?

Jarrod Bridgeman:
No, it was gone before dinner even started.

Casey Hiers:
And then you guys got into religion and politics pretty quickly at the family Thanksgiving?

Jarrod Bridgeman:
As usual, yes. Yes. My brother was there and he is the exact opposite of me, so that did come up a little bit.

Casey Hiers:
I made that joke to a family member and they didn't even get the joke. They didn't think it was funny. They thought I was going to launch into those topics. I'm like, "No, no. We'll save those for the podcast."

Jarrod Bridgeman:
That's the funny part is making a joke about the things we can't talk about.

Casey Hiers:
Yeah. And seeing the people that laugh and they're like, "That's pretty good," and the people that get butt hurt.

Jarrod Bridgeman:
Well, Casey. So there's a reason why you're not in the studio at the moment. So do you want to tell me what happened to you? What's going on, pal?

Casey Hiers:
Yeah, as you're cutting your Montecristo No.2 cigar in the podcast-

Jarrod Bridgeman:
Having my whiskey.

Casey Hiers:
... in the podcast suite.

Jarrod Bridgeman:
That's right.

Casey Hiers:
So we had unexpected snow, very little, a light dusting yesterday. People that it normally takes 40 minutes to get home, it took them three hours. I was good to go. Went and worked out last night, coming back through the neighborhood, going a solid eight, nine miles an hour and there's a roundabout, and as you know, all nice, you start to turn and you don't really turn. And I was heading towards a tree and it was slow motion 'cause I wasn't going very fast, but I'm like, "I'm going to take out this tree. This is not good." So I turned hard right and the rim, or the flat part of my tire, drilled the curb pretty stoutly, and then an incredible noise occurred as I drove to my driveway. I was happy to just get it into my driveway.
So then I figured my tires flat. No, everything looks perfectly fine. Appearances, right? The appearances were everything looks fine. So then I go, just drive it up the road again and just terrible noise. So I'm like, "Okay, maybe it's an alignment issue." Not a mechanic, but I hear a loud noise when I drive. It's probably a bad sign.

Jarrod Bridgeman:
Probably, right, right.

Casey Hiers:
There's probably some smoke there. So anyways, yeah, I'm currently waiting for a tow truck to take my SUV to a place that can diagnose and hopefully fix whatever the heck is wrong. But boy, I was grateful yesterday. I'm like, "Hey, I didn't hit a tree and I'm at my house. I got my car back to my house." This morning, some of those effects started to take place though.

Jarrod Bridgeman:
Like what?

Casey Hiers:
Well, taking the kids to school, balancing vehicles. My beautiful wife has things that she needs to do, and then trying to call the tow truck and realizing my morning is going to be hijacked. That's when anger set in, I think.

Jarrod Bridgeman:
Right. And then having to call and then wait on a tow truck, sometimes that can take forever too.

Casey Hiers:
Anywhere from 25 to 110 minutes is-

Jarrod Bridgeman:
That's a large window.

Casey Hiers:
Oh, it's so good.

Jarrod Bridgeman:
That makes me think you are prepared. You're no stranger to driving in winter in Indiana, and you weren't hot rodding around. You were going slower than normal, I would say. I've been in the car with you. So you were going slower than normal and something still happened. Like, you were prepared and as you said, when you got home, all appearances, your car looked fine, but there was something not, I'm going to say under the hood, but it wasn't under the hood, but you know what I mean. There was something underneath that chassis. Something was not right, that's now affected the rest of your day or even week or how long ever it takes.

Casey Hiers:
Well, and the feeling of when you turn your steering wheel to go one way and your vehicle goes the other way. That is a helpless feeling.

Jarrod Bridgeman:
There's nothing scarier really.

Casey Hiers:
No, I think it turned out to the best, but you and I were talking about it this morning via phone, and there's some parallels here to dentistry and some of the challenges they face.

Jarrod Bridgeman:
Right. A big one, and it's something that people are going to start thinking about come January through March and April is taxes, tax situation and bills or other things that may arise even though you thought you were prepared.

Casey Hiers:
I was talking to a practice owner recently and they were talking about how they had a great year, lot of upside. They were sharing how some of their friends and colleagues, who've had staffing issues, they've been blessed to not have those. They've been growing. Everything has seemingly been good. And then they had two pieces of information hit. They owed a property tax that was overlooked $25,000. And because there had been some growth, that they also owed another $45,000 in additional taxes beyond paying quarterly taxes.

Jarrod Bridgeman:
So in their mind, they were doing what they were supposed to do as they thought.

Casey Hiers:
Yeah, their staff was simpatico, they're producing great dentistry, there's a lot of good, and then that unexpected happens and they feel, to quote them, they basically said, "I feel powerless about this. I'm so frustrated. I guess this is just how it is."

Jarrod Bridgeman:
Just one of those things. Again, on the surface of everything, everything was fine. You were doing the right thing. Like, for example, with you in the accident last night. If you were a professional driver, maybe you would've known a better trick to turn the wheel or something that may have prevented the accident. And I think that's the same thing that professionals in the tax field, in a financial field, are much more equipped to deal with than you or I or the normal practice owner. They have much more knowledge about how to alleviate and fix these things before they even happen.

Casey Hiers:
Well, a tax preparer, not one that works with 15 dentists and claims that they know dentistry, but a tax preparer that does dental only forensic accounting, that's what they do, to parallel with my accident. The only thing I could have done was at the last second turned my wheel back where the rubber hit the curb instead of my rim hitting the curb because that impact probably would've prevented whatever this noise I'm about to find out is going to cost me. And in tax and accounting, again, so many of these accountants, they kind of do what I did. They threw their hands up, "Well, I don't know what I could have done. It was slick." Right? Well, I don't know what I could have done. You grew. Well, what you could have done is been tracking this monthly and quarterly and gotten ahead of it. I even talked to people recently, they don't pay quarterly tax estimates, and I asked why. And they didn't have a good answer, but then they started talking themselves into, "Well, it's just better for some cash flow. I've got money throughout the year before writing the big check."
But then there's no barometer on really to be able to track it. If you do it quarterly, you have a feel for it and then you know what that variance is, where if you're a practice owner just playing a lump sum at the end of the year, sometimes that's driven by empathy structure, but you really just don't know.

Jarrod Bridgeman:
And it's a dangerous slope to get onto-

Casey Hiers:
Like black ice.

Jarrod Bridgeman:
Yeah, yeah.

Casey Hiers:
Like black ice. You don't know. You don't see it until you're on it. A lot of these practice owners, they have a year and they just don't know. And they're told this and then they settle. And I can tell you, I went through, "Well, I'm grateful I didn't hit a tree. This isn't so bad," till this morning, I'm a little bit revved up and annoyed because now I'm enduring the consequences of it. Too many practice owners, they just think, "Well, that's just how it is." They endure the consequences of it. And it might take a while. It might take a couple of years, God forbid, a decade of terrible tax accounting, a standard of care that is just unacceptable for them to not accept it, I guess, if that makes sense.

Jarrod Bridgeman:
Right. And even on top of that, you and I had mentioned previously before this recording, tax extensions. So they know things may not be right and so they're getting these extensions, getting these things tacked on to try and fix it and all that is also doing really is eating into next year's time as well.

Casey Hiers:
Well, once I had my car in the driveway, I was like, "Yeah, I can get to it. Maybe I'll just wait, kick the can down the road. Wait a couple of days because I'm real busy." It's never good timing for have them be down a car. But then I thought, "How many practice owners have I talked to that tell me they always file extensions because it's more strategic or there's less probability of getting audited, which we've had a podcast on that before. That's incorrect.

Jarrod Bridgeman:
Correct.

Casey Hiers:
But kicking the can down the road doesn't do anything. I realized, "I got to get this fixed. I got to get this fixed now." So many practice owners settle for the extensions, filing late, the tax surprises that we talk about, not having accurate quarterlies. Just super frustrated. I know how annoyed I am at this minor thing. As a practice owner, why are you putting up with-

Jarrod Bridgeman:
A beater. Driving a beater down the road every day.

Casey Hiers:
Yeah. Yeah. And it's mind-blowing to me that while so many practice owners are producing great dentistry, but yet they settle for subpar accounting. And again, we've talked about this, it's not just how much you pay for your CPA services. What does poor accounting cost you? And we know it's tens and tens of thousands of dollars every year above what they pay on many occasions, but how's a dentist to know, looking at income structures and entity structures and quarterlies and forecasting and making adjustments and all of the unique tax strategies that our dental tax team utilized?

Jarrod Bridgeman:
And then all of a sudden they find out they had a shareholder loan they didn't know about.

Casey Hiers:
Yeah. Well, it's like if I go to a dentist, I used to think they're all equal and the same. Well, wild example, but well, you might go to one that pulls the wrong tooth and you're like, "Well, I guess that just happens." No, it doesn't. That's called terrible dentistry to pull the wrong tooth. How many practice owners tolerate subpar accounting? It's easy for us to get frustrated 'cause we see it so often where we kind of see the before snapshot of... This is just their tax picture, obviously. We do a lot more. But we'll see the before, we'll see all the errors, mistakes, things that should have been done, how much it costs them, and it's just shocking to us to see by just having good accounting, you might have $30,000, $40,000 more every year.
And it's not tricks, right? "Oh, I'm going to run my kids through the practice and my car." All those tricks are gimmicky. Yes, there are opportunities to implement some of those strategies, but so many people, they love that they can run a massage through their business and they think that's just so cool, a couple of hundred bucks. In the meantime, they had a $38,000 tax surprise, but they got to run something fun through the practice and it just makes them feel better.

Jarrod Bridgeman:
It's like throwing a Dixie cup of water on a bonfire.

Casey Hiers:
Yeah.

Jarrod Bridgeman:
Yeah. You like that?

Casey Hiers:
Yeah.

Jarrod Bridgeman:
I just made that up. Well, Casey, in talking about these tax situations and ways that a dental-only firm can really help a practice owner, really help them succeed a lot, that brings me to one of the big projects I've been helping work on is where you and your team of speakers will be next year. It's going to be really exciting. I'm really excited for it. We're going to a lot of really cool areas. I'm not going to cover the entire year right now because I don't want to bore everybody, but I do want to cover our first quarter here and get people in those areas excited and who that listen to us. And if you know somebody that could benefit from one of these events, feel free to send them along as well. Starting in January, on January 23rd, we're going to be in Fort Myers in Jacksonville, Florida. That's going to be a really, really cool event. There's going to be bourbon, there's going to be food, there's going to be [inaudible 00:13:34]

Casey Hiers:
When is that one?

Jarrod Bridgeman:
January 23rd.

Casey Hiers:
Okay, so in Indiana, Carmel, where we're at, in January it's typically cold.

Jarrod Bridgeman:
Correct.

Casey Hiers:
We're going to be in Florida in January.

Jarrod Bridgeman:
That's right.

Casey Hiers:
That is great news.

Jarrod Bridgeman:
But a week after that we'll be in Boston, so that'll be cold again.

Casey Hiers:
Yeah. The Yankee Dental Congress, what a great... There's a lot of great dental meetings and we've really enjoyed going to the Yankee Dental Congress. We present two hours. I think our lecture is on Thursday this year, typically to a sold-out room, again, of people who, in the pit of their stomach, feel that they might be missing the mark on the business and financial side of things. And what a great event. Now Boston is cold in January, but other than that, beautiful city, the North End has some amazing Italian restaurants. We love that meeting. What a great meeting.

Jarrod Bridgeman:
Well, and what's a really fun thing we're doing this year is the night before, that Wednesday night, we're going to be having a little social.

Casey Hiers:
That's right. We're going to get some friends, colleagues and people we don't know. We're just going to get together at a very nice venue and maybe taste some bourbon, have some nice snacks, but no lecture. Just spend time together. I know we've got multiple clients and friends going to join us there and for people in that Boston area, we're going to reach out and invite people to come.

Jarrod Bridgeman:
And if you're in the Boston area or if you know you're going to the Yankee Dental Congress, we'd love for you to come and join us.

Casey Hiers:
What do we got in February?

Jarrod Bridgeman:
Yep. February we've got Fayetteville, Arkansas, and Oklahoma City, which is in Oklahoma. I don't know if you knew that.

Casey Hiers:
Smaller venues. I like it.

Jarrod Bridgeman:
Yeah. Yep. Followed up by Scottsdale, Arizona and Henderson, Nevada. I said Nervada. It's Nevada. My bad. Leading into March, we've got Shreveport, Louisiana, Birmingham, Alabama. Then we're going to be at the Thomas P. Henman conference and you'll be speaking at that one.

Casey Hiers:
That's right.

Jarrod Bridgeman:
Yeah, yeah.

Casey Hiers:
Yeah. That's in Atlanta. I think it's the opening weekend of March Madness. Yeah, we're going to be-

Jarrod Bridgeman:
Yeah, it's like the 20th or the 22nd of March, so that sounds about right.

Casey Hiers:
Yeah. I'm going to do a lecture there and probably do another, call it a cocktail party or social, for dentists and specialists. Going to do that the Wednesday before.

Jarrod Bridgeman:
Yeah. And then wrapping up for March, we're going to be in Northbrook, Illinois and Springfield, Illinois kind of coming back to the-

Casey Hiers:
I like it.

Jarrod Bridgeman:
... Midwest a little bit. Yeah. So I mean, those are just the events in three months. We're going to be all over the place the rest of the year. This is really exciting, and I know you and your team are thrilled about some of these new places that we're going to go to and speak to. It's pretty awesome.

Casey Hiers:
Well, Jarrod a little inside baseball, we go to a lot of different cities, we look at a map, we figure it out. But the Orlando's and the Dallas's of the world, they have a lot of opportunities for just tons and tons and tons of resources and events because they're big cities. Some of the geographies we go to, they don't get catered to. They have to travel long distances, so we thought let's sprinkle some of those in. And we're also, yes, we get into cashflow and tax management and investing and retiring, practice advisory, insurance, a whole bunch of different things, but we're going to talk about how to conquer the DSO and not in a bad way.
But we've talked about it before, how many practice owners, they feel like they have one option. They're upside down on their money. Somebody offers them a big check and they feel like that's their only option and we want people to have more options. Yes, that's an option. How about getting your practice to sub 60% overhead, a practice that isn't completely hijacked by insurance, one that your profit and loss statement and balance sheet and income shows a really strong practice. If you have a practice like that, you have options. We're going to get into that a little bit.

Jarrod Bridgeman:
And when all those things are going right, it allows you to refocus on why you loved going into dentistry in the first place.

Casey Hiers:
That's right. So many people have that youthful energy of being a new practice owner, and the sad thing is when they go to retire, they've just been beat to hell and they're frustrated. And they loved dentistry, but man, it was a tough go because they tried to do everything on their own. The dentistry, the business side, financials, decision-making, and so we don't want people to be in that spot. We want people to be empowered.

Jarrod Bridgeman:
So Casey, before I wrap this up, I just want to tell everybody, if you're in the Fort Myers or Jacksonville Florida areas, seats are now available to register.

Casey Hiers:
We just launched that yesterday, right?

Jarrod Bridgeman:
We did. And so we've got some emails going out and stuff, but if you're listening, go to fourquadrantsadvisory.com/events and they're on there. Within the next couple of weeks, I'll be putting up some of the other cities, towards the end of January, so a lot to look out for.

Casey Hiers:
Well, and as a listener, here's what you can expect. At minimum, you're going to have a great time. We put on a pretty good show, not just the lecture part, but we have some of the best food. We've had chefs carving tomahawk steaks, medium rare for people. We're drinking some of the best bourbon, tasting it in a responsible manner, but really having a good time. You're going to see friends, you're going to see colleagues. You might see competitors, but people end up high-fiving and having a good time. Other people, they might learn a tip or two, but for some of those people, it could change their life, and I don't say that lightly. It might be that they have to challenge their current existing external teams to be better, or they may find there's a better way. But regardless, people have a great time.

Jarrod Bridgeman:
Well, Casey, thank you so much for spending some time with me while you're waiting on that tow truck, and I'll probably see you later on this afternoon at some point.

Casey Hiers:
Fingers crossed. Thanks, Jarrod.

Jarrod Bridgeman:
All right, Casey, have a good one.

Announcer:
Hello, everyone. Welcome to The Millionaire Dentist podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances, and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue that may not be safe for work.