12k for PLLC tax setup and file? Advice seeked

[Tooth Wizard]

Long story short:

Bought into our practice this year and became partner. Started my own PLLC and run the business as a pass through to pay myself.

My partner and the actual dental practice use a financial group to do tax work and file, so I assumed I should just use them as well since they had a lot of the leg work already done from previous filings with the practice.

After 6 months and multiple meetings, they have not been able to tell me which accounts to set up (sep, solo 401, etc) and have only told me to be a PLLC and be taxed like a SCorp. The practice currently offers a 401k match to all employees that I could take part in. They've also tried to sell me multiple things apart from tax planning that do not interest me.

The kicker is this: they want 12k to file my taxes for my personal PLLC, individual, and to set up an initial "tax strategy". They want 8k a year, every year afterwords. I wish this would have been made known to me from the very beginning, but it's a lesson learned for the future. To me, this seems high. After asking around, it seems like most my dental friends who are owners pay around 2-3k.

I'm looking for general advice on how to move forward. Any suggestions on investment accounts, tax planning, entity setup, and/or general advice would be greatly appreciated.

[jfoxcpacfp]

It sounds as if their fees are inversely related to their usefulness. Those fees are ridiculous.

This is a scam. Pigs get fat and hogs get slaughtered. They are banking on the assumption that all partners will "need" them. My advice is that you do not move forward.

[childay]

Sounds like a total ripoff for your situation.

You can setup a PLLC yourself quite easily.  Whether you should s-corp or not depends on your income level, if you care to provide.  There are several threads on this topic as well.

If your practice is running a 401k then you cannot to set up a SEP or solo401k, you would be covered under the practice plan.  Figure out who is administering it and get a copy of the plan document.  In my spouse's case we used fidelity for a "investment only" non-prototype account, under the practice's plan document.

[Tooth Wizard]

Thanks for the reply. The PLLC has already been set up. At this time I was advised to pay myself a "reasonable" salary, which we decided on 12k a month.  On an average month I take around 30k for my collections portion. We take a quarterly draw as partners, usually around 30k each quarter. That adds up close to 475-500k. This is my first year as a partner, so we will see, but so far that is what it looks like.

 

The 401k is set up with a guy named James Lunney and his group "The wealth strategies group or WSG". I have all the documentation. I wish it were another option, as I am a firm believer in a 3 fund portfolio and keeping things as simple as possible.

[childay]

Tooth Wizard wrote:

Thanks for the reply. The PLLC has already been set up. At this time I was advised to pay myself a “reasonable” salary, which we decided on 12k a month.  On an average month I take around 30k for my collections portion. We take a quarterly draw as partners, usually around 30k each quarter. That adds up close to 475-500k. This is my first year as a partner, so we will see, but so far that is what it looks like.

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I am not sure exactly what you mean by these terms.  I am assuming you have already elected to be taxed as an s-corp.  If by salary you mean your W2 salary, that might be on the low side.  Are you taking the extra $$ as a distribution from the s-corp?  Taking ~25% of profits as salary and the rest as a distribution probably is pushing it.  I am however not a CPA etc.