Tax Information Every DPC Physician Should Know
As a Direct Primary Care physician, you need to have an accountant who will advise you on taxes for your practice. You should work with someone you trust, but it’s good to know a few of the basics to help you make decisions about your practice.
What You Should Know
- Taxes for yourself
- Taxes and fringes for your staff
- Sales tax if you choose to sell any products.
Taxes for Yourself
What sort of taxes you will pay depends on how your practice is set up. If you set up an LLC as a sole proprietorship, you will need to pay your estimated taxes quarterly. You should work with your accountant to set up an accounting system that your staff can manage and you can monitor (although today’s systems are efficient enough you may want to manage it yourself). Make sure you set aside an appropriate amount of money to cover your estimated taxes. If you haven’t done so already, you should find yourself a qualified accountant!
Taxes and Fringes For Your Staff
You will need to make sure you pay the appropriate taxes and other fringes associated with your state for your employees. Good physician tax information to know would be things like unemployment insurance and social security which you pay for every employee (and also withhold from their paycheck). Other types of benefits may be subject to taxes (for you or an employee) such as reimbursements for continuing education or bonuses. Your accountant or financial institution can help you find a good payroll company to handle these issues.
Sales Tax if You Choose to Sell Any Products
You may want to sell some products in your office for convenience. These could be something simple such as sunblock or a food journal or they could be more regulated such as a series of antibiotics. In most states (all but 2, Illinois and Louisiana), prescription drugs are not taxed. But, you will have to collect sales tax on the other items you choose to sell. Although selling items can save time and reinforce messages you want to send to your patients, as well as generate additional revenue for your practice, it’s important for you to remember that you must discuss this with your accountant to make sure you’re accounting for it properly.
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