91: The Most Overlooked Tax Mistake in Dentistry: Excess Distributions

If you're a dental practice owner—or planning to become one—this episode could save you thousands. Wes Read, CPA and CFP, breaks down the financial fundamentals every dentist needs to master, especially when it comes to getting money out of your business without triggering IRS penalties.Wes unpacks the critical role of choosing the right business structure—S Corporation, LLC, or sole proprietorship—and how that decision directly impacts your taxes. You’ll learn why S Corps are often the go-to for dentists, and how your “stock basis” plays a central role in what you can legally distribute from your business.What’s the danger? “Excess distributions”—taking more out of the business than your basis allows. Do this, and you could be looking at capital gains taxes and serious IRS scrutiny.Wes explains the three primary ways dentists take money out of their practices—payroll, direct distributions, and personal expenses—and how to do it smartly. If you’re in the middle of a buildout, just bought a practice, or making big equipment purchases, this episode is a must-listen.With clear explanations and actionable advice, Wes helps you sidestep costly tax traps and plan your cash flow more strategically.What You’ll Learn:How excess distributions work—and why they’re a silent profit killerWhat “basis” really means, and how it affects your ability to take money outThe pros and cons of S Corps, LLCs, and sole proprietorships for dentistsThe three most common ways money exits a dental practice—and the tax implications of eachHow to work with your CPA to avoid penalties and optimize your income #DentalBoardroom #DentalCPA #DentalFinance #ExcessDistributions #SCorporation #DentalPracticeOwner #DentistTaxTips #DentalPo