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Big Tax Savings in Office Space

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The animal health industry is a broad field encompassing many different types of professionals and care centers. The term animal health means the broader health ecosystem to some and pet care to others.  While the clientele may differ in each setting, the goal is always the same; to help the patient heal and feel better regardless of how many legs they have!  Another commonality of all animal health professionals is the desire to pay less in taxes legally.

If you’d like to pay less in taxes, then read on…

 

What is cost segregation and what does it have to do with me?
Cost Segregation is the reclassification of assets in order to accelerate depreciation. This method can be used on buildings that are acquired, newly constructed, and even (on a look back basis) for buildings that have been owned and operated for many years!

What if you don’t own your building? No problem, Cost Segregation can be performed on the interior improvements that you have undertaken as a tenant as part a buildout.  This strategy allows you to “front load” your depreciation at tax time, freeing up significant cash flow which can be reinvested into your building or practice. You will not get more money back, you will simply expedite the time frame of your depreciation allowing your money to work for YOU rather than pay our government! This is a particularly good time to consider a Cost Segregation Study with the newly implemented 100% bonus depreciation regulation as part of the Tax Cuts and Jobs Act of 2017. This legislation is different from the past version because it now includes acquisition where previously bonus only applied to newly constructed buildings.

In addition, the bonus rate (as mentioned earlier) is now 100% for certain assets!

 

What is my tax benefit?
The benefits of a Cost Segregation Study vary depending on the details of your property.

For example, a newly constructed pet hospital with a cost basis of $1,540,000 can expect to see around 30% accelerated, and with the new bonus depreciation, the first-year tax savings could be in excess of $180,000!  A rented two story veterinary office with recent tenant improvements totaling over $290,000 was able to accelerate over 91,000 or roughly 60%!

Again, the results are heavily based on the facts and circumstances surrounding your property, but on average veterinary facilities can expect to see between 20-50% accelerated depreciation! If you have bought, built or renovated your office (even if you rent) please let us determine your estimated return!

 

If you’d like to pay less in taxes legally and think cost segregation might fit your situation, then complete this form and we will have a VET CPA contact you immediately.

 

 

VET CPA Association

All members of the VET CPA Association are licensed CPA’s and have been vetted.  In addition, each firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are perfectly legal, they often require extra work that a local generalist would never consider to offset the incremental time demands.  Cost segregation is one example of proactive tax planning designed to maximize tax credits and loopholes.  The VET CPA Association works with a leader within the cost segregation industry to provide ethical ways to lower your taxes.

4 SIGNS YOU NEED AN ANIMAL HEALTH CPA

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Have you wondered whether you actually need to have a CPA accountant who specializes in the animal health industry rather than a generalist accountant nearby?  In other words, at what point should I search for a specialist who has experience working with pet hospitals, clinics and veterinarian practices?

Here are four signs that confirm you do:

  • You earn over $100,000 per year – Your odds of being audited once you start earning over $100,000 a year. It should come as no surprise to you that your odds of being audited increase dramatically as you make more money. Yes, the IRS is much smaller than it used to be but they are also focusing more on higher wage earners.
  • You are a business owner or are self-employed – Utilizing the services of an accounting professional is vitally important for any business owner or entrepreneur. Tax laws change annually and the biggest change in decades occurred for the 2018 tax year.  The current US tax code is 67,204 pages long and there are over 1,638 different forms.  Making sure all of your deductions are included, your assets are depreciating properly, and you are maximizing your tax savings will wind up saving you money in the long run.
  • You are experiencing rapid growth in your business – Not only is keeping your finances up to date time-consuming, it’s also complicated. When you’re experiencing rapid growth, it’s time to call in a CPA professional focused on the animal health industry. Having more customers, employees, and vendors is going to require more paperwork and number crunching and can rapidly become impossible for you to manage.
  • You own an office building or are considering adding a new location – Owning your office building can have significant tax saving opportunities if planned properly.  Also, office building improvements is another huge tax saving opportunities that most generalist accountants overlook.

If you answered yes to one or more of the signs above, then  you should consider working with a CPA who specializes with pet hospitals and veterinarians.  Simply complete this form and a specialist will contact you.

 

VET CPA Association

All members of the VET CPA Association are licensed CPA’s and have been vetted.  In addition, each VET CPA firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are legal, they often require extra work that a generalist CPA would never consider to offset the incremental time demands.

Why Pet Hospitals and Veterinarians Hire Specialists

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In today’s world of specialization, more and more veterinarians and pet hospitals are hiring specialists to help them with legal matters, financial matters, insurance, practice brokerage and even real estate.

Veterinarian Law Firms

Veterinarian CPA Firms

Veterinarian Practice Insurance

Veterinarian Practice Brokerage

Veterinarian Practice Real Estate

In each of these cases, there are local generalists to provide these services and are located close to your place of business.  Typically, a local generalist handles everyone from retail businesses to construction to whatever walks in the door.  However, most savvy veterinarians will trade off location in return for a higher level of industry knowledge and expertise so they make the best decision relative to their competitors and minimize risk.

Whether you are a new veterinarian or a seasoned practitioner, there are law firms who are dedicated to the animal health industry who can save you tons of time and money by focusing on the animal health industry.  The same is true for veterinarian real estate, insurance and accounting/tax.  There are huge advantages to be gained by hiring a specialist who understands the nuances of the animal health industry.

For example, if you own a pet hospital, clinic or vet practice and suspect an employee is stealing cash, a generalist accountant would probably miss this and would not have a clue who to recommend as a specialist.  However, a CPA dedicated to the animal health industry knows a couple experts to recommend.  Or, hiring a VET CPA who has been trained on how to reduce the risk of fraud and theft can save you agony.  This kind of advice is priceless.

Here are several other ways an animal health industry CPA can provide a higher level of service to you:

  • Specialized tax planning techniques – The United States tax code is 67,204 pages long and there are 1,638 different forms. And as you make more money, the complexity increases dramatically which is why the US GAO says that taxpayers overpay $1 billion per year in taxes.  To simplify this, animal health CPA’s focus on aspects of the US tax code that are most advantageous to pet hospitals and veterinarian practices and share techniques that can be harnessed to lower your effective tax rate.
  • Purchase new equipment cost effectively – Animal health CPA’s understand how to finance equipment and expense it better.
  • Cost comparisons – Animal health CPA’s have the ability to compare your costs versus similar hospitals, clinics and vet practices your size so you can understand areas to save money. This covers labor, overhead, fees for services, production, accounts receivable, and more.
  • Due diligence on buying a practice – Most VET CPAs can help you avoid buying an overpriced or problematic business.

 

If you are looking to make the best business decisions for your animal health business, hire a specialist that understands our industry and has a network of experts to recommend as well.

 

VET CPA Association

All members of the VET CPA Association are licensed CPA’s and have been vetted.  In addition, each VET CPA firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are legal, they often require extra work that a generalist CPA would never consider to offset the incremental time demands.

If you’d like to hear from a VET CPA who is best suited for your animal health business, complete this form today.

Top 7 Questions to Ask When Choosing an Accountant?

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The tax changes under President Trump have been major.  In fact, the tax law changes are the most significant tax changes in more than 30 years.  And given those major changes, many pet hospitals and veterinarians are stepping back and re-evaluating what is best for their current needs.

Here are a series of questions that you should be asking to make sure you are in the best tax possible position.

  1. When is the last time you attended a conference for the pet industry?
  2. What is the best corporate entity structure for my practice?
  3. Would I benefit from cost segregation study to lower my taxes?
  4. Should I establish a pension program for my practice and would it be cost effective?
  5. Should I consider captive insurance to lower my effective tax rate?
  6. Should I have more family members on the payroll?
  7. How does my practice compare to my peers?

If you are serious about your financial future, then you should be working with a VET CPA that not only focuses on the animal health and veterinarian industry but knows the best ways to lower your effective tax rate with proactive planning and strategies.

All members within the VET CPA Association attend at least one major conference a year along several tax planning conferences.  In fact, we had a couple members at the Veterinary Meeting and Expo (VMX) recently in Orlando and our group is represented within VET Partners as well.

If you are tired of working with a generalist accountant who does not understand your practice and would like to upgrade to a VET CPA, contact us today and we’ll make the introduction.

Embezzlement Is More Prevalent Than You Realize

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Fraud and embezzlement in veterinary practices and animal hospitals is far more common than any of us realize.  Yes, it will happen to you at some point within your office.

Recently, we had an expert speak to our association and the myriad of ways that embezzlement occurs in a veterinary practice or pet hospital and it was alarming.  All of the various ways they can steal is endless from stealing products, padding payroll, petty cash, employee advances, patient refunds, insurance checks, and even prescriptions.

Here are several ways to minimize your risk of fraud:

  • Background checks – All employees should be subject to background checks before being hired, especially office managers , receptionists and key staff. This is inexpensive and standard procedure for savvy vet practices and pet hospitals.  Most office fraud cases are caused by serial employees who repeat this crime and get better at their craft.
  • Digital time clocks – The days of submitting payroll manually are over. Your office should be using a digital time clock.
  • Inventory levels of products and supplies should be very tight and overseen by multiple people in your office.
  • Separate responsibilities so you don’t rely upon one key employee.
  • Ensure that multiple people can perform all tasks and ensure all employees take vacation. Embezzlers typically avoid taking time off and want to control all tasks.
  • Many embezzlers have a tight relationship with the practice owner. Physical or emotional.

In a nutshell, over 70% of veterinary practices and pet hospitals experience fraud, theft or embezzlement.  Unfortunately, most bad apples were identified but not prosecuted.

If you suspect embezzlement at your office, there is a process to follow before accusing any staff member.

VET CPA Association firms are another resource to contact if you suspect something is not quite right.  Our members have a process to follow and an independent fraud risk expert to help you at the appropriate time.

Best States for Veterinarians

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While there are many ways to determine where veterinarians have it best, here’s two different top ten lists.  The first ranking comes from Veterinarian’s Money Digest and second comes from Zippia.

Best States                                             Vet Money Digest

For Veterinarians                                Top Ten States                  Top Ten States (Zippia)

1                                                              Oklahoma                           Idaho

2                                                              Wyoming                            Pennsylvania

3                                                              Texas                                   Virginia

4                                                              Pennsylvania                     Rhode Island

5                                                              Michigan                            North Carolina

6                                                              Virginia                               South Dakota

7                                                              North Carolina                  New Mexico

8                                                              Indiana                               South Carolina

9                                                              New Jersey                        Indiana

10                                                           Idaho                                    Maine

 

And while there are many ways to analyze this, there are some patterns between the two lists.  These are Pennsylvania, Idaho, North Carolina, Indiana, and Virginia.