Tax Strategy, 1099 Dentistry, and Financial Decisions with Travis Slade

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All right, let's go back to the show.

Hey, welcome to Dental Digest. I'm your host, Dr. Melissa Seibert, and this is a podcast with a mission of enabling you to stay on the cutting edge of evidence-based dentistry.

Today, I'm featuring my accountant, Travis Slade of Uluru Dental Accounting. He's exceptional because he effectively only works with dentists, which means he understands all the intricacies of the tax and financial aspect of dentistry. Having someone who's a true subject matter expert in our profession can make a huge difference.

But here's the thing. One of the best ways to actually see more money in your bank account isn't just by producing more, but by getting smarter with your taxes. There are really only two levers: make more or save more.

What if one of the easiest ways to save more is by paying less in taxes and doing it legally the right way? This episode, Travis is going to walk us through how to keep more of what you earn.

He'll share strategies for minimizing your audit risk, the kinds of expenses that could land you in trouble, and smart ways to leverage retirement accounts so you can build wealth and cut your tax bill all at the same time.

By the way, if you enjoy this podcast, leaving a rating and review really does make a difference. You wouldn't believe it, but it's almost like leaving a Google review for your favorite small business.

It helps more people find the show. If you've left a review or you're about to, I truly want to thank you for supporting Dental Digest. And one of the best ways you can help grow the show is by telling your friend about it.

Okay, let's jump in.

Dr. Melissa Seibert: So Travis, welcome. So glad to have you on the podcast. You have really devoted your career toward working with dentists and physicians and helping them to navigate the tax code, whether they are an associate and they're a 1099 employee or they're a practice owner. And you help walk them through all the things that they can do to protect themselves, to keep their practice financially sound, and also really make the most of tax advantage opportunities and avoid getting into trouble. Do you want to start by just saying how you got into this in the first place?

Travis Slade: Yeah. So the quick version is my degree is in accounting. But a couple years out of school, I was convinced by my brother, who is a dentist, to go work in his dental practice. I spent a year there as kind of the office manager. We were trying to grow into multiple locations, but it was one year of seeing intimately what it's like to be a practice owner and how much opportunity there was to do better for practice owners on the accounting side and just getting better numbers in your practice.

Obviously taxes are your biggest expense. So that's kind of my natural passion, accounting. From then on, I was determined to become the best dental CPA in the world. That's my mission. There's only 30 of us out there, so I got to do my best. No, just joking.

Being in my brother's practice, seeing how hard he worked to get through dental school, to get a practice, it is not an easy road to be a dentist. I think a lot of people out there that don't know, they see dentists and think, oh, these rich people that make all this money and don't even work five days a week. If you know dentists, you know that's not what it is. It's a very hard road. There's a lot of big financial decisions that have big implications. Not to sound cheesy, but my heart goes out to dentists and the road you chose. I think it's a hard road. It has great upside, but you have some important decisions to make.

Dr. Melissa Seibert: Okay, so let's jump into this. One of the best ways that you can potentially see more take-home money is just being savvy on the tax code. I know that this topic could seem extremely dry, but we're going to make this really relevant and engaging. There are ways that as associates, you could be seeing a lot more in your take-home pay and as owners you can. Let's just start with associates. Many of the people listening here work in a dental practice, and they are going to be 1099 employees. Can you explain what a 1099 is versus a W-2?

Travis Slade: Yes. W-2 means you are an employee and 1099 means you're a contractor and you can effectively do whatever you want. Now, a lot of times as an associate, you don't get to pick. It's not like you go in and they're like, well, what do you want to be? It's given to you if you're a 1099 or W-2.

A lot of times you maybe should be a W-2, but you're paid as a 1099, or maybe the other way around. Usually that's the situation where maybe you should actually be an employee, but they're paying you as 1099.

If you're paid as a 1099, you typically pay more in taxes, in payroll taxes. But you also have a much more wide-open space on tax deductions as a 1099. So it's not necessarily always worse to be a 1099 contractor. It just depends on your specific situation.

To give you high-level rules, whether you're 1099 or W-2, this is actually something that's been contested in courts a lot of times because Uber drivers were 1099 and then they were fighting to be paid as W-2 employees. That's where a lot of this stuff comes from.

There is state law, and the IRS has its own things that they've come out with. So there's a lot of noise around this 1099 versus W-2. Some general rules of thumb are: how much are you managed at your job? How much autonomy do you have? How much training are you given? How integrated are you into the system?

Typically, a good rule of thumb is if you're a specialist going into a GP practice, that's pretty safe to assume you're 1099. But if you're an associate dentist and your schedule is being dictated, your treatment plans, your philosophies, the training that you get is all influenced from the practice that you're working for, there's a good chance you probably should be W-2.

Dr. Melissa Seibert: What are the things that need to happen in order to be perhaps a 1099, an independent contractor? If I were to go into private practice and be a 1099 independent contractor, am I responsible for providing my own materials? What are the reasonable boundaries here? Because if you can really begin to understand things correctly, being a 1099 can be quite profitable.

Travis Slade: It just depends. There's no hard and fast rule on what you actually need to provide. The IRS has these terms that they use. One of the terms is facts and circumstances. It takes into account everything around your employment or your work that you're doing and if it actually constitutes 1099 or not.

But if the opportunity that you're getting dictates that you're going to be paid as a 1099, usually it's a take-it-or-leave-it type thing. Basically that means they're going to pay you. If you earned $10,000 that period, you get a $10,000 check. There's no taxes that are withheld. There's no payroll taxes. Now it's on your shoulders to make sure that you're going to be prepared for taxes by the next year that you have to file.

Dr. Melissa Seibert: Now let's talk about all the potential benefits of being a 1099. What are reasonable tax write-offs?

Travis Slade: The first thing I will say, just as a little tangent to this, when you're a 1099 associate, or even just a practice owner, the first decision you have to make is if you want to be a sole proprietor or an S-corporation. People talk about, should I form an S-corp or not?

An S-corporation has expenses. You have another tax return you have to file. You usually have to file forms with your state to form the S-corporation. As a general rule of thumb, and most accountants wouldn't say this because there's always “it depends on your situation,” but as a general rule of thumb, if you're making more than $140,000, you should probably be an S-corporation. You're going to save more money on taxes.

I do have a worksheet, a little calculator. If you want to plug numbers in on, should I be a sole proprietor or an S-corporation, email me at [email protected]. That's G-O-U-L-U-R-U.com. I can send that to you and you can do the calculation yourself.

That's the first thing when it comes to deductions. Now, both of those options, a sole proprietor or an S-corp, all of these things we'll talk about later, they apply to both. There are just certain taxes that you save as an S-corp.

One thing that's really confusing with the IRS, and on the accounting threads I'm on, people always get confused. If you have an LLC, the IRS ignores that. It's called a disregarded entity. It means nothing to the IRS. So if you have an LLC, you have to pick, do you want that LLC to be taxed as a sole proprietor or as an S-corporation?

So when we talk about sole proprietor versus S-corp, that even applies if you have an LLC, which you probably should have an LLC. But you still have to make that decision on which entity to be taxed as.

Dr. Melissa Seibert: A few things there. First of all, can you say your email again? You said it a little fast.

Travis Slade: I know. Shoot. So [email protected]. That's G-O-U-L-U-R-U.com. It's a mountain in the middle of the Australian Outback, Uluru. Google it. But I have this great calculator. If you're ever in that position where you need to decide which entity to choose, it's a great tool to help you decide.

Dr. Melissa Seibert: Okay. Now please explain why someone would want to be an LLC, because I think that's perhaps the misconception there, that this is a protective entity, but it's not automatically going to give you certain tax advantages.

Travis Slade: Yeah. Forming an LLC has zero tax advantages. The IRS ignores LLC, right? So there is no tax reason to form an LLC unless you're forming the LLC to then become taxed as an S-corporation. If you want to do the S-corporation, that has tax benefits. But forming an LLC by itself, zero tax benefits. It's just legal benefits.

Effectively, liability protection. If someone tries to sue you, they can only get the business assets. They can't go after your personal assets. You should probably have an attorney speak more to that.

As an associate, the reasons to form an LLC, there's not a lot of things that people could sue you over, but it could be sexual harassment type things in the workplace if someone accuses you of that. If you own a practice, it could be slip and fall at your location. Malpractice, if someone's trying to sue you for malpractice, whether you have an LLC or not, it doesn't matter.

But yeah, it's really a few things. And it's generally a good idea to have. It doesn't cost too much to set it up. Especially if you plan on buying a practice someday, if you're an associate and you're planning to buy a practice someday, it's not a bad idea to set it up sooner than later just so that it's ready to go when you buy a practice.

Dr. Melissa Seibert: This is really helpful because a lot of people that might want to be getting these tax advantages, they're thinking that the first step is that they need to go form an LLC. But you're saying, no, that's kind of a superfluous step. It's good to have from a legal protection standpoint, but you can still get all those tax advantages without forming the LLC.

Travis Slade: Yes. It's so counterintuitive. I have a sister-in-law and she edits my Instagram videos for me. I do a lot of Instagram videos and I had a couple videos where I was talking about this. Don't form an LLC for tax reasons. There's no tax benefit of it.

A few months later, she actually has her own TikTok channel and she's starting to make money. She's like, I need to form an LLC so I can save money on taxes. I was like, you've been editing my videos where I say that you don't need to do this. She's like, it doesn't make sense to me. It just feels warm and fuzzy for people to have an LLC. They think it's legit to form one. But you don't actually need to have one to save money on taxes or to deduct any of the things that we'll talk about.

Dr. Melissa Seibert: Yeah. Let's jump into the things people want to know. Some misconceptions out there. Some of these could perhaps potentially theoretically get you in trouble. If you were a 1099, because again, a lot of the people on this podcast, they're associates. They want to know what are the reasonable tax write-offs that they can take advantage of?

Travis Slade: Okay. So I have a list here I'll go through. And this applies if you own a practice or if you're a 1099 associate. Usually as a 1099 associate, it's harder to know because you don't have this actual practice you own.

Dr. Melissa Seibert: Can I actually interrupt you first? Before we jump into that list, can you really explain the philosophy behind tax write-offs? Why is the government letting us do this in the first place? Because I think there are really good hardworking Americans out there. They want to do the right thing. They don't want to take advantage of something. They feel like they might be cheating by using tax write-offs. So what is the spirit behind these?

Travis Slade: Yeah. The idea is that the IRS or Congress has written into tax law that they only want to tax you on the profit of your business. They understand that businesses have expenses and they don't want you to pay taxes on just your total income. They want to let you reduce your total income by your regular business expenses and only tax you on the profit in your business.

But they want to make sure that those expenses that you're deducting or writing off are ordinary and necessary for your trade or business. Those are probably the two biggest phrases that you'll see in all tax law: your trade or business, and that it's ordinary and necessary for the type of work that you do.

That's one of the benefits of only working with dentists for the past 10 years. We know what's ordinary and necessary and we can give you good guidance on what the IRS would think as well.

So it needs to be ordinary and necessary and related to your business. Now, some people, a good example is getting my hair done. If I'm a girl, I need to get my hair done. I need to look good because that's going to help me close more cases. It feels ordinary and necessary. Well, that's been around long enough and the IRS has been tried in tax courts, and we have enough evidence out there to tell you that you should not deduct your hair appointment.

Some people still argue that should be ordinary and necessary. But as time goes on, some of this stuff gets solidified and you can get a pretty good idea on what you should deduct and what you shouldn't.

Dr. Melissa Seibert: If I didn't know that and I thought that was pretty reasonable and I did try to use that as an expense, what would happen to me if the IRS does come back and audit me? Are they going to immediately throw you in jail? Are they going to fine you? Are they going to give you a warning? What happens? Because I think some people on the other end of the spectrum might be so afraid to utilize these expenses because that's what they're afraid of.

Travis Slade: I would say do not be scared of the IRS. I have talked to thousands of agents. I've called the IRS so many times. I've been through audits, even though they're very rare.

First thing I would say is don't be worried, especially if you're clearly not fraudulent and trying to do illegal things. If you're just an honest person and you thought, my hair should be deductible, and I deducted it, and now I'm getting audited, typically what would happen is you would get a letter from the IRS.

Usually it's all of your expenses, but they will pick out a couple hot items and they could say, give us documentation on why this expense was deducted. Let's just say it's your hair expense. First, you would have to give some documentation. You'd have to maybe find the receipt for the hair salon you went to. Then you would give a written explanation on why it was a business purpose.

You could explain, hey, I don't care what my hair looks like on everyday use, but when I go to work, I have to get it to look really good. I found if I get cut and coloring and all these things, then I close more deals and it's good for business.

You could give that explanation to the IRS. They might accept it. Every IRS agent that audits you has slightly different interpretations of things and things that they care about. There's a chance it could actually go through. It probably won't, I would say.

If it doesn't, let's just say that's the only thing that's getting audited. They would disallow that expense. Let's say you wrote off $1,000 of haircuts for the year. They would say, we're no longer allowing that deduction. So they basically increase your income by $1,000 and apply it to the tax rate. Let's just say it's a 30% tax rate. Now you owe us $300. Then they give you a penalty probably of like 20% and some interest. So maybe you owe $400.

You deducted $1,000. They disallowed it, gave you some penalties and interest, and now you owe $400. Audits are so rare. You're not trying to be fraudulent. But if you feel like there's a real use case and you're willing to fight it if it comes to an audit and you understand the risk, the IRS in some ways kind of allows you to do that. They're not going to take you to jail or anything. They just make their decision and make you pay back additional tax.

Dr. Melissa Seibert: Yes. This is actually incredibly helpful information. I myself as a business owner, especially because I have a dental educational business, I do feel like I get to take advantage of many of those write-offs. But there's so many that I probably could be also writing off, but part of me is afraid to make a misstep. Before we jump into those write-offs, just one other question. What is a clear picture though of a fraudulent charge? What are the things that are obvious, willful, and will get you in trouble?

Travis Slade: I would say it's usually things of larger scale. An example is a client buys a really nice ski boat, a $165,000 boat, has a great wake for wake surfing, and they love that thing, and they call it a water pump on their tax return. They buy a $165,000 water pump and try to write off the whole thing through their business.

It's pretty clear that's not needed for the business. They're even trying to misclassify it on the tax return and get a big deduction. I would say that would probably classify as fraud.

I will say that I have found the IRS throwing out the word fraud fairly lightly, meaning they could define fraud differently than how other people would define fraud. So there's tax courts and ways to get clarity on things if you're too worried about it. But it's basically something that you know is clearly not business, it's clearly personal, but you're trying to just write it off and get away with that.

If there's something that you think has a strong business case legitimately, I would not consider that fraud.

Dr. Melissa Seibert: One final question, then we'll get off this. What about the instance going back to that ski boat? What if they really are taking clients out on it every week, something to that effect? And then also, I just want to close this out. It really sounds like what you're saying is be mindful, especially with those big expenses. You really want to ask yourself, can I justify this to the business? And you want to be transparent about your write-off. So it sounds like the big things are big write-offs will raise flags. And if you are going to have a big write-off, be transparent about what it is.

Travis Slade: Yeah. You can even, if you're worried about it, disclaim it to the IRS. There's a place that you could say, hey, I know this is aggressive. Here's my argument. You can call that out on your tax return.

For the ski boat, yeah, if you truly are taking out patients and you're using it as a marketing tool. I think I did go to the lake one time and there was some orthodontist's logo plastered on this very expensive boat. I do think though what the IRS is going to look at, and this is a common theme that they have, is how often are you using it for personal and how often are you using it for business?

One of the things I'm talking about is automobiles. A lot of people have tested the limits of automobile deductions, so there are a lot of rules now that the IRS has around automobiles and what you can deduct. A lot of it just breaks down to when was it used for business, when was it used for personal, and prorate the business use.

I think you could say something similar about that wakeboard boat. But you're going to have a challenge saying it's ordinary and necessary for the business. You don't have to have a wakeboard boat to be an orthodontist. Maybe you are taking it into work.

Dr. Melissa Seibert: So now let's jump in. What are reasonable tax write-offs? Let's say you're a dentist, you're a 1099 associate. Let's start there.

Travis Slade: There's a long list of stuff and I'll just rattle through this quick unless you stop me. Insurances. Malpractice insurance. If you get a business insurance, which you probably don't need as an associate, but that type of insurance.

If you do have life or disability insurance, which you should have disability, do not deduct those. That's a little caveat. It's very standard practice in the CPA community that we don't deduct your premiums for disability so that if you do get disability, it's tax free. There is very little benefit for deducting your disability insurance. But there's a great benefit for you if it's tax free if you actually have to use it.

Same thing with life insurance for your beneficiaries. So quick little caveat: don't deduct disability and life, but deduct your other insurances.

Continuing education, licensing fees, membership dues, dental equipment that you have to pay for, loupes is a popular one there, office supplies, computers, business cards, notepads, a cell phone. You probably have to use your phone for work. You can deduct that. Your internet. For cell phones and internet, you're only supposed to deduct the business portion. You're supposed to figure out how much is personal use and business use, but you can still deduct those.

Automobiles is a big one. Parking.

Dr. Melissa Seibert: Talk about automobiles. This is a contentious topic. Let's say that 60% of the time I'm using my car to get to work and I purchased it a year ago. How would I deduct that?

Travis Slade: The IRS has this term, when it's placed in service. So you could have bought it a year ago and say, okay, on July 1st I'm placing it in service. There are really two options for deducting your automobile.

With both options, you have to keep track of your miles. How many business miles you drive. You can either take a standard mileage rate. If you drove 1,000 miles, the mileage rate in 2025 is 70 cents per mile. You can take that amount and that is a write-off.

The less popular option, I would say, is the standard mileage option. The more popular option is deducting your actual expenses. So the cost of the vehicle, you deduct it technically through depreciation, but basically the cost of your vehicle and all the costs of the car: gas, insurance, registration, car washes, everything. You deduct that whole cost of the vehicle, but then you take your total miles and your business miles. If it's 60%, then you would take 60% of the total cost of the vehicle and write that off.

Usually that is more for most vehicles, but it depends. If you have an old beater car, like my car this morning that had to get towed, then it usually makes more sense to do the standard mileage rate because it's a $10,000 minivan. It's not going to give me a lot of write-off.

But if you have a nice car, we're talking Teslas and beyond, then you want to write that thing off. There's a lot of nuance to vehicles. There are limits on how much you can write off. There are typically higher limits if it's over 6,000 pounds. So SUVs and trucks usually get more of a write-off. Sometimes people will come to me like, I need a car and I know I have to get a truck for tax reasons. You don't have to get a truck. It just sometimes gives you more benefit.

Dr. Melissa Seibert: So let's say theoretically, you have a $500 car payment, you're a 1099 employee, and 50% of the time you're driving into work. Let's say it is a Tesla, you're not paying for gas. Does that mean that they can write off $250 each month of a car payment?

Travis Slade: Kind of. That's not a bad way to think about it. The accountant in me is like, well, is it leased? Is it owned? Is it being financed? What interest rate? There's a lot of nuance that goes into this. That's not a bad way to think about it though.

Where people really get excited and can also get in trouble with the car is they buy a car. They buy a $60,000 car at the end of the year, which, without going into too much detail, if you are going to buy a car and write it off for the business, I do think it's better to do it at the end of the year. It's easier to support in an IRS audit or defend.

Let's just say you buy a $60,000 car at the end of the year and you put $10,000 down. That $60,000 car, you could potentially write all of it off. On your tax return, you have a $60,000 deduction, which let's just say saved you $20,000 in taxes.

So I bought this car. I only paid $10,000 down. I got a $60,000 write-off and that saved me $20,000 on taxes. So it was like that car was free. I only paid $10,000. Obviously I have car payments now for it.

People think they're cheating the tax code and they get really excited about it. That's not a bad thing to do, but just know you're going to pay for the remaining $50,000 with interest over the next five years. You're not going to get any deductions for the rest of that $50,000 because you accelerated it on the front end. It creates this thing called phantom income. It's like I'm spending money and it's not reducing my taxes. It can get confusing if you do that. It's not a bad thing to do. You just have to have your eyes wide open when you do it.

Along with the vehicle, and it's in its own category, is parking and tolls. Those are not subject to the automobile limits. Parking and tolls is a big one.

Travel, home office deduction, accounting fees, legal fees. If you have health insurance and you're self-employed, you can deduct your health insurance premiums. Advertising and marketing, work attire, scrubs type stuff. Meals. If you have kids, you can put them on payroll, potentially. If you do have a spouse, I would not pay your spouse, just a quick note.

You can also do retirement plans. A popular one for an associate would be a SEP IRA and get big deductions into your retirement plan. You can also, if you're recently out of school, deduct your dental school kit, which is an interesting one. Sometimes when you pay for your tuition in school, you pay $10,000 or $20,000 for a school kit. If you become a 1099 associate, you can actually start deducting that on your taxes.

And then one that is like getting your hair done, but I think this has not been challenged through an audit and I think it would survive, is massages. With dentistry, there's so much back pain and there's a lot of evidence to support how hard dentistry is on your body. I think getting regular massages is something that I would consider, but just know that probably comes with a little bit more risk because for most professions, it's probably not considered ordinary and necessary, but I think for dentistry, it probably should be.

Dr. Melissa Seibert: Hey, I want to welcome you to Elevated GP. This is a brand new platform that includes modern evidence-based on-demand courses for GPs and access to Journal Club. Journal Club is a once-monthly virtual study club where we're going to talk about hot topics in dentistry. To get registered, go to theelevatedgp.com to join. I hope to see you there.

Dr. Melissa Seibert: You talked about the SEP IRA. This is one of my favorite things. Please explain what this is.

Travis Slade: A SEP IRA? Well, I'll just talk for a second about retirement plans. When you have a business, you can set up a retirement plan. The most popular term you'll hear in this retirement plan space is a 401k. If you're an associate and you're just the only person of the corporation, you have a lot of options when you pick your retirement plan.

You could do what's called a solo 401k, which requires a little bit of setup work. You could do what's called a defined benefit plan. But I personally, for a lot of my clients, like a plan that's called a SEP IRA. SEP. Self-employed something. I should know.

A SEP IRA basically allows you to put money into a retirement account and get a tax deduction for it. A good rule of thumb is generally about 25% of your income, or 25% of your W-2 wages if you're an S-corp and you have to pay yourself wages.

Let's just say you made $100,000 and you want to max fund your SEP IRA. That means you could put $25,000 into a retirement account. You would set up an account at Charles Schwab and you move money from your business account into Charles Schwab, $25,000. That $25,000 now is a write-off on your taxes.

Let's just say it saves you $8,000 on taxes. That's great. Now it's in this retirement account and it's growing tax deferred. That $25,000, let's just say I'm 30 years old, grows to be $100,000 by the time I'm 50 or 60 years old, probably more than that. Then when I pull the money out when I'm retired, then I'm taxed on it then.

We're deferring the tax into the future years. There's a lot of philosophy around this, but the idea is that when you're not working, when you're retired, you'll be in a lower tax bracket than the years that you are working. Ideally, when you take it out when you're retired, it's a lower tax bracket than what you had when you put it in.

Dr. Melissa Seibert: All right. So now, common thing, meals. What can people deduct and not deduct?

Travis Slade: Meals, just know if you were to get audited, the first things the IRS is going to go after because they know people abuse it are meals, travel, automobile, home office. Those are the first few things that they're just going to start attacking.

For meals, if you're using any tax software, it'll automatically do this for you, but only 50% of the meal is deductible, meaning I spent $100 on a work-related meal, only $50 of that is going to become a write-off.

Some general rules of thumb: you can't be alone. To deduct the meal, it needs to be with someone unless you're traveling. We can talk about travel later. But unless you're traveling for a business purpose, you going to pick up a Starbucks on your way to work, it's not considered a meal for the IRS. If they see $5 to Starbucks every day, they're going to know you are probably not meeting with someone for all of those meals.

It needs to be with someone. Maybe it was just your portion of the meal, and that could potentially be deductible. But you can't be alone. And it can't be lavish. It can't be over the top. Now that's a subjective term. But if it's clearly a very lavish meal, the IRS would consider that non-deductible.

I had a client one time who was very aggressive. He was one of the rare people that got audited, but probably for good reason. He had some crazy meals. He had a $100,000 meal that he was deducting. He was a physician, but some hyper-specialized doctor, made $3 million a year and was very aggressive. Unsurprisingly, that meal was disallowed by the IRS.

Dr. Melissa Seibert: So let's say you're a practice owner, or you're someone like me who has a dental educational business, and it is not uncommon, as the spouse of any business owner knows, the owner is constantly talking about this. I'm constantly bouncing ideas off my husband, getting his input. Let's say he and I go out to dinner. Is that a reasonable expense as long as we are actually talking about business-related things?

Travis Slade: I would say generally, you're probably going to be okay. But another rule that the IRS says is that it needs to have a business purpose. The meal needs to have a business purpose and you need to keep documentation of the meal.

If the meal is more than $75, you technically need to have the receipt to be able to show the IRS. You need to be able to tell the IRS what the business purpose was, what was discussed at the meal, and what was the business relationship that you had with that person.

Can you deduct a meal with your spouse? I would say yes, but just know you would need to have the documentation and a note on what actual business discussion took place. Some people have their spouse on payroll for different reasons, and that's a whole other topic, but that's even more reason to say it has business purpose to it.

That also can be abused, and the IRS is going to see that and potentially go after it. They don't know. A lot of times these audits happen two years after you had that meal or three years after you had that meal. It's not like they can go back and get video footage of the restaurant or anything. As long as you have a good documentation trail, there's no reason you wouldn't be able to deduct it.

Dr. Melissa Seibert: Okay, let's talk about travel. So let's talk about a very common scenario. A dentist goes to a $4,000 weekend implant course. What are the things that they can reasonably deduct?

Travis Slade: Deduct it all. The most common situation with travel is there's typically business and some personal potentially going on. As long as the amount of business days that you're traveling exceeds the amount of personal days, then you can deduct all of the transportation expense to the course, and they don't count weekends.

Let's just say you go to an implant course and it's four days. Then you stay an extra three days, potentially even more because we don't count the weekend. Let's say you stay an extra three days for personal. Your airplane tickets can be deducted. The whole airplane ticket can be deducted. Then the lodging for the business days and all of the meals for the business days are also deductible.

The place where people get in trouble is when they go on a clearly personal vacation to Disneyland with the family and they take a couple work calls while they're at Disneyland, because you're always taking emergency calls probably or some kind of work call. It's like, well, I had to do some work at Disneyland, so I'm going to write off the whole trip to Disneyland, the whole hotel, the whole Disney tickets. That's where you get in trouble.

The biggest rule of thumb with travel is what is the primary purpose of travel? If it's business, there's a good chance you can write off most of it.

Dr. Melissa Seibert: What if you're a practice owner, let's say, and your spouse is not an employee, they're not on the payroll, but you hear this phenomenon a lot. They will go have a vacation, maybe they'll involve family members that they get advice from, and they try to write that off. I'm guessing that's probably a no-go.

Travis Slade: Probably no-go. Again, are you initiating this travel solely for business? If you can confidently answer that yes and provide documentation, like the IRS will ask, tell us why this was business related. Oh, well, he's on my board of advisors and we can only talk to each other when we're away from our homes. There could be some argument there, but it has a higher likelihood of not being allowed.

Some CPAs will just say, don't do it. It's clearly not and it probably will be disallowed. But if you want to try to take that risk and defend it and come up with that documentation, there's no reason you can't.

We already talked about the worst case scenario in some of these things of it eventually being disallowed, and you'd have to pay back tax and some penalties, which is not the end of the world. If you're being really egregious, like big trips, tens of thousands of dollars, not documented, clearly personal, will it be categorized as fraud? I don't know. It'll probably just be disallowed and you have a big penalty to pay with that.

Dr. Melissa Seibert: One thing to note too, as an aside, is by virtue of owning a general educational business, there are certain things that I do record meeting minutes for. One thing that I'm finding that makes things so easy now with AI is there are incredible apps that you can use, things such as TurboScribe. I just ordered the Bee Watch. We're going to have to look at how to navigate around that because that will record every single conversation, of course, as long as it's on.

Then I will take those conversations and put it into ChatGPT, which I pay $20 a month for, and I will ask it to write up my minutes. It's so nice because in the pre-AI era, those minutes, that's tedious. It's a pain. It's a pain in the butt to format. That's just a little aside for people looking to get those advantageous write-offs that are very reasonable. Use AI. Do yourself a favor.

Travis Slade: Love that. Thanks for bringing that up. Again, with all of this, the IRS is always just like, what's your documentation? Where's your notes? And it's going to be hard three years from now to remember exactly what I was doing today. I don't remember what I was doing yesterday. I love that. That's the Bee Watch? I haven't heard of that.

Dr. Melissa Seibert: I am so excited for this. I just ordered it. I want to be fully transparent here. I haven't had a chance to use it yet. Get back with me. I could tell you it's a piece of garbage. But I think it was either someone in the Washington Post or New York Times. They wrote about their experience with it. It was intriguing to me. It's $50. It's a wearable. My understanding is that when you turn it on, when you turn it off, it will record all of your conversations. Apparently, the battery life is around seven days.

A few setbacks with this, though, is privacy. For example, they do say that they have very rigid security features, but who knows? You could be having a very personal conversation. You run the risk of data being breached.

The way I'm going to be using it is, as a dentist myself, I'm very particular about documentation, not just from a medicolegal standpoint, but also, gosh, I want to go back and be able to reference what is the treatment we're doing today? Why are we doing this? How do we forward the patient? You get it.

I want to be conscientious of the staff. I don't want to make them miserable writing all this down. So my plan right now, just ordered the Bee Watch, should be here pretty soon, and going to wear it all throughout patient care. Of course, we're going to be very conscientious of not having a patient identifier. But then, yeah, plug it into ChatGPT.

I was using ChatGPT as a transcription service, but the problem was anytime that I'd have limited cell phone service in the building or Wi-Fi would cut out, the whole conversation would be lost. So yeah, love AI. I am big into AI.

Travis Slade: Yeah. It's a big topic in the accounting space too. Cool. I love that.

Dr. Melissa Seibert: So let's now also jump into, we've talked about all the tax write-off benefits for associates. What about practice owners? Is there anything else that we should know?

Travis Slade: It's going to be a similar list, but plus all of the regular practice things. Typically when we do accounting for practice owners, we'll have all of their regular business expenses, which is just the stuff that you typically need to run a practice: paying your staff, paying rent, paying supplies, lab bills, all of that stuff.

We categorize that in this one bucket that we call practice overhead. You want to do that however you normally have to do that. You don't want to pay any more than you have to in all those categories. Then we create this bucket on the profit and loss statements that is just doctor expenses, which is really this list that we went through right now.

We want to strip these things out of practice overhead so it doesn't mess with our overhead numbers, like your labs and supplies should be 6% of overhead and all that stuff. So we want that in this doctor section. Really, it's going to be the same things we talked about: things that have an arguably personal benefit, but also a business benefit and that I can legally write off for business purposes, like the vehicle, the meals, the travel, home office, uniforms or scrubs, all that stuff.

Dr. Melissa Seibert: Very fair. Do you want to explain the concept of depreciation? So let's say I bought a $20,000 printer for my office. What is depreciation and how would that apply?

Travis Slade: What depreciation is, basically, the IRS has this rule. A good rule of thumb is if you buy something physical, think of a physical thing that's more than $2,500, the IRS has a specific rule that says you cannot write that off all right away. You have to depreciate it over five years.

Let's say it's a $10,000 printer. You can only write off $2,000 every year. That's depreciation. You get a $10,000 printer and you depreciate $2,000 every year.

Now there's a big bill that's circulating Congress. Depending on when this episode comes out, it may already be published, probably not. One of the things that's in this bill, which seems pretty certain, is that there's 100% bonus depreciation. This is a big headline of this big bill that's being passed. Basically what that means is if you buy that $10,000 printer, you can write all of it off, 100% depreciation in the first year.

Depreciation, typically you have to spread out how long you write it off, but there's a lot of ways. There's Section 179, which is another depreciation lingo that you might hear out there. Section 179 basically just means writing off the item sooner than regular depreciation schedules.

Dr. Melissa Seibert: Now let's pivot a little bit here. Throughout your career, you have also seen dentists put themselves in the financial poorhouse just from misstepping. What are some of the big financial mistakes that you're seeing?

Travis Slade: The hardest one is the psychology of money. I think there's a book called The Psychology of Money, which is a great book. There's a mindset that everyone has around money. There is something about becoming a doctor that makes you feel like you deserve certain things. Who would put themselves through this much school? Who would put themselves through this much debt? Who would take so long before they actually start making money?

You sacrificed a lot to be a dentist, which is really why I do what I do and care about what I do. But I think what can happen in your mind is you go so long without certain things that you feel like you deserve a certain lifestyle, you feel like you deserve a certain vehicle. Maybe it's the image you want to maintain.

I think just living beyond your means is the number one thing, or how you think about money can be really detrimental. Wanting things before you can actually afford it is the number one thing that gets dentists in trouble. And this is not just dentists. This is anyone in general, but I think the road to becoming a dentist is harder. A lot of people are dentists because of the lifestyle they were hoping to have. Sometimes that doesn't come to fruition as quick as they thought it would, but they start spending even though it's not really time to start spending.

The sooner that you can slow your spend creep, because once you start spending a certain amount, you just never go back down. Lifestyle inflation is very real.

Dr. Melissa Seibert: I have to add this as well. Really, in dental school, read the book Rich Dad Poor Dad. I hope everybody listening to this reads it. Even if you don't, the big takeaway is that the rich buy assets, the poor buy liabilities.

Me and my husband made a very conscious decision to really do our best to live within our means. I feel like that has made all the difference because even just from a nervous system standpoint, I just transitioned out of the military. By the time this goes live, I'll have been out of the military for a long time. I'm now in the private sector.

I feel like knowing that we live well within our means, that we have ample savings, made for a very different transition. I wasn't super stressed about X, Y, and Z. I got to really take the time to find a practice that's a very good fit.

I think this is what I think, and Travis, I think you're going to agree with me. I'm really pleading with anybody listening to this. The real luxury good that you can have is not a handbag. It's not a car. It's not a super nice house. It is a calm nervous system. It is knowing that if you lose your job tomorrow, you will have ample savings. So that's the real luxury good.

Travis Slade: Yeah, I love that. I love the idea. I was going to talk about cars. A car is a depreciating asset. You need vehicles, but that's not going to make you any money. If you spend $50,000 on a car, that's not going to be worth $50,000 in five years. If you spend $50,000 in SEP IRA contributions, that will be $100,000 in five years. Appreciating assets versus depreciating assets or liabilities, I think that's a big mistake you make early on. You don't want to buy things that are going to create liabilities or just depreciate more than you have to.

Dr. Melissa Seibert: And is it going to own you? Seriously, we see this a lot. I know that a contingent of this audience is new grads. So I'm pleading with them. The temptation is to graduate and get that dream car. I get it. You have worked so hard.

But one of my other favorite podcasts, White Coat Investor, really talks about this. Me and my husband committed to this: live like a resident for the next few years. Seriously, it's worth it because you don't want something that's going to own you. You can buy that really nice car, and then that owns you. You are having to work far more than you'd want to. You're having to be in a job that you hate. Don't buy something that's going to own you.

Travis Slade: No, I love that. All of this also is to say, I don't think anyone's advocating for misery in your lifestyle. As a dentist, you should be making good enough money to generally get the things you need without discomfort. It's those splurges that are really getting you in trouble.

One other thing that I would caution, I think a lot of people know this now, but not everyone does, is refinancing your student loans too soon. Sometimes that can get you in trouble. I've seen that happen a lot of times, especially if you plan on buying a practice. Typically, don't refinance your student loans until after you buy a practice. That's sometimes a thing that stops people from getting approved for loans. So don't refinance student loans without a plan behind it.

Dr. Melissa Seibert: Forgive me, this is so inert, but can you explain what you mean by that? We have some very recent grads. We have some dental students listening. Can you please explain what is the refinancing process? Why would they do that?

Travis Slade: Let's say you graduate with $300,000 of student loans and you're on a federal program that's income-based repayment. You have a minimum payment that you can make and you start paying that minimum payment. Let's just say it's $500 a month. That $500 a month may not be enough. You may be compliant with the loan, it's not defaulting, but it may not be enough to start paying down the principal portion of the $300,000. Meaning the $300,000 balance grows.

You go a year, you're making $500 payments, and that $300,000 becomes $310,000 after a year because you're keeping your payment low, but the total loan balance is growing. That's a very normal thing in the student loan world.

That seems like a bad decision. Like, oh, my loan balance is growing. I should stop that. One of the ways to stop it is to go out of the federal program and go to a private lender like SoFi and say, hey, I want to pay down $310,000. They'll give you a 10-year term or something. Now your monthly payments though, to pay down $310,000 over 10 years, instead of $500 a month, now you're paying $3,000 a month or more.

Your monthly cash flow starts to get constrained because you refinance. When you go buy a practice, the bank looks at your monthly debts. That $3,000 a month payment that you make to SoFi is eating away at a lot of your cash flow. If you don't have enough, if you have too much debt and not enough income with the practice you're buying, they might think you don't have enough flexibility to buy that practice. And so they're not going to give you a loan.

It's a little counterintuitive. I had a client seven years ago, he was right out of pediatric dental residency, and he was so eager to refinance his student loans. I told him it's not a good idea until you buy a practice. Hold off a little bit. Rates were pretty low at this time, but it drove him crazy that the loan balance was going to grow even a little bit. So he refinanced. Just last week I was meeting with him and he brought it up. He's like, I still think about when I refinanced my student loans. That was a dumb decision. I knew I shouldn't have done that.

It's not terrible. It's not the end of the world, but it can limit you in your future options if you refinance too soon.

Dr. Melissa Seibert: Is it also fair to say that before you start making any of those decisions related to your loans, make sure first of all you understand what you're doing, and second, make sure that you potentially consulted with a professional? I look at my husband's student loan situation and how both he and I have come to learn a lot more about that as time has gone on.

We were potentially at a crossroads to make a decision related to his loans seven years ago, and we got very fortunate. It really was like we flipped a coin. It ended up being absolutely the right situation, but I look back at that and said, oh my gosh, had we selected option B, we would have been up a creek without a paddle.

I'm kicking myself now because back then we weren't really surrounded by professionals to help guide us. Some of these decisions can be quite consequential. The problem is, I think the loan industry, they want to put a gun to your head and have you make a decision very quickly because it's oftentimes in their best interest.

Travis Slade: Yeah. There's, you may know this, the company Student Loan Planner, a guy named Travis Hornsby. Maybe I'm just biased towards Travises, but they have great service. Relatively inexpensive for student loan decision-making. This big bill that's circulating Congress, there's a lot of noise right now on student loans. You definitely want to have someone guiding you because it is a big decision.

Sometimes a consult with them, I don't know what their current price is, but it used to be like $500 for a student loan consultation. I remember having clients being like, oh, that's so much money for a consultation. I'm like, we're talking about $300,000 of student loans and such big implications on what program you choose federally or refinancing and all these things. Clearly thousands and thousands of dollars at stake. It's well worth it to pay someone a few hundred dollars to help you make the right decision.

Dr. Melissa Seibert: Exactly. Lastly, let's round it out with this, going back to financial missteps that you've seen dental professionals make. What about practice owners? Are there any missteps you've seen owners make? For example, buying too much technology too quickly, having too large of an overhead. Are you seeing any of that?

Travis Slade: Oh yeah. I would say the biggest mistake I see, there are a few, but one that comes to mind is people who buy a dental practice and the dental practice is ugly. It's got ugly carpet, ugly walls, ugly furniture, old equipment, smells funny, looks funny. You bought the practice and it had a great patient base. That's what you're buying. You didn't buy a good-looking practice.

It just drives you crazy every day to go into that office that's so ugly. Banks will give you a loan to remodel the practice. You are dying to do it. If you remodel a practice too soon, it can be a really bad thing because remodeling will not bring in more revenue. If you're adding an operatory, that's different. And if you can fill that operatory, you can put a butt in that seat, then that's a different kind of analysis.

But I've seen it happen several times where a doctor will buy a fairly big practice, so they have a fairly big loan, but it's an ugly practice. Then they get another loan to remodel it. Doing a remodel is stressful. It takes up your energy. You're burnt out from the remodel, but now you've got to work even harder and you're taking home less because of that remodel.

I would be cautious on remodeling a practice that you've bought within the last five years. You can do little stuff, but I'm talking about these big $300,000 remodels or more to make the office look really good. Also, patients clearly have been coming to this ugly practice and are fine with it. Sometimes a remodel turns them off. Like, oh, now it looks all super nice in here. I bet my dental prices are going to go up. It doesn't give you an immediate return.

Dr. Melissa Seibert: What would you say though about attracting perhaps a desirable customer base? I don't view patients as customers, but let's say again, you have that really dingy old practice and very loyal patients, but maybe you'd like to be doing more high-end aesthetic cases.

Travis Slade: Totally. There is for sure an argument for that. It depends. I have a client who only does $30,000 veneer cases. If his office looks crappy, that could be an issue. But I would say generally, that's closer to your five-year-plus plan potentially. Again, it depends on the practice and how much you bought.

The examples I'm thinking of are people that have a loan. They bought a big practice, $1.3 million practice, $1.5 million practice, which is a big loan and strong patient base. It's going to be hard to change that demographic quickly. Really, you want to nurture that demographic and make sure cash flow is good for a few years before you add on another big loan payment.

Dr. Melissa Seibert: Fair. So don't jump into a dingy old practice and spread yourself very thin with a giant loan for a remodel. Factor in the cost, factor in the ROI, which as you mentioned is arguably zero, and then really evaluate the financial situation.

Travis Slade: Yeah. I'm pretty opinionated on this because it's very rare for practices to fail. Banks have like a 0.00% default rate on dental loans. They always talk about that. But one of the only practices I know that's failed did that exact same thing. They tried to do too much too fast with too much debt.

Dr. Melissa Seibert: Not only that, this harkens back to what I talk about: don't buy things that own you. I have a really incredible mentor, Jeff Lineberry, wonderful guy. He came on the podcast and talked about earlier in his career. He had a very small practice, I want to say four operatories or so, small is relative, but he described it as small, and he was doing great. Very, very profitable practice.

Then he decided, I'm killing it. Now it's time for me to go out and buy my dream practice. He talked about how every single day it was a grind on the treadmill. He was miserable because now you're on the hook.

These are all things I evaluated. I know I talked about how for me, Melissa Seibert in the year 2025, my luxury good is time and a calm nervous system. So me having that jumbo multi-million dollar practice, multi-million dollar loan is not in alignment with me right now.

Travis Slade: I love that. I think you just have to be careful. I'm all for people wanting to grow and change the practice that they buy, but you just don't want to do too much too fast. Again, I've just seen it multiple times causing too many problems.

Dr. Melissa Seibert: Well, Travis, this has been exceptional. You are a true professional. It's so funny because you remind me of our financial advisor. We had Tess Zigo. She came on the podcast probably two years ago and she was exceptional. She knew what she was talking about. By the end of that episode, I asked her, hey, will you actually be our financial advisor? And she has done so much for our finances.

You are a true professional. What we've really talked about here is making big decisions and needing guidance, and paying that little bit of money upfront for the guidance will save you thousands and thousands of dollars, potentially six figures, in your career and your lifetime. How can people work with you? How can they learn more about you? And you also have a podcast.

Travis Slade: Oh yeah. My podcast is nothing compared to what you have, but it's probably the world's most fascinating podcast. We just talk about dentists and accounting things. No, I'm just joking.

It's called Travis, Can I Have This? The idea is that if you want to buy something, you always ask your accountant first, I guess. People are always asking me, can I buy this laser? Can I hire an associate? Whatever it is. So Travis, Can I Have This? is the podcast. It's on Apple and Spotify.

Any questions, any tax questions or whatever, happy to help. You can email me at [email protected]. That's Travis at G-O-U-L-U-R-U.com. It has a bunch of U's in there because I care about you. That's what I tell people.

Uluru is a mountain in Australia. We named our company after it in the middle of the Australian Outback. The Outback is not a desirable place. No one wants to go to the Outback except there's this one mountain that stands out in the Outback, and it's where everyone travels to. When they go to the Outback, they go to the Uluru mountain.

So that's what we want to be in accounting. Accounting is a very boring, bland space, just like the Outback. And we're trying to stand out and give people a good destination to go to when you think about accounting. So Uluru, gouluru.com, and would love to have any questions that you have.

Dr. Melissa Seibert: Oh, wow. I was going to ask you what the story was behind that. I was like, did you have a life-altering experience here? But that all makes sense. People know how to get ahold of me if you need Travis's information. Travis, this has been exceptional, and I learned a lot. Thank you.

Travis Slade: Yeah. Thank you, Melissa.