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Employee or Independent Contractor — What’s the Difference?

The ADA Center for Professional Success

The ADA Center for Professional Success

Sometimes there is confusion over what it means to work as an independent contractor vs. working as an employee. Here’s the IRS on the topic (PDF link):

“An employer must generally withhold federal income taxes, and pay unemployment tax on wages paid to an employee. An employer does not generally have to withhold or pay any taxes on payments to independent contractors.”(IRS Publication 15-A)

So is this just a matter of word choice? Absolutely not!

The ADA Center for Professional Success has more information:

Employees are typically subject to the employer’s instruction, such as when and where to work, what supplies must be used, how work is to be completed and other procedures. Employees may not be required to invest in their own materials and may be eligible for benefits. For an employee, the employer dentist must generally withhold income taxes, withhold and pay social security and Medicare taxes, pay unemployment tax, and afford workers’ compensation benefits.

Be careful though, as being an employee does not mean that the employee dentist can defer ethical responsibility for care. That always rests with the individual professional. “The boss made me do it” is never a good defense!

Independent contractors have more control and are often paid a flat fee for their work. They are not as likely to be reimbursed for expenses, nor to receive benefits and the relationship is usually just centered around the end results of the work, not the time at or means by which those results are accomplished. There is generally no requirement to withhold or pay taxes for independent contractors — the burden is on the independent contractor. Keep in mind that the final test comes from what actually goes on in the relationship. The label on a piece of paper doesn’t matter as much as the day-to-day workings of the practice.

If the IRS believes that a worker has been mis-classified, the business may be liable for back taxes. And it’s important to note that part-time or full-time status is not a deciding factor.

If you are concerned about the classification of those who work for you, or of the classification of yourself as a worker, it’s important to consult with a local employment attorney in your state of practice.

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ADA members — check out the ADA Center for Professional Success at Success.ADA.org. Resources include financial calculators to factor loan payments and overhead expenditures, ergonomic tips to keep you healthy and patient communications strategies to build trust and increase patient satisfaction.

Life as a New Dentist — Solo Practitioner

The ADA is made up of individuals — here’s one of them.

Dr. Joseph Laudie

Dr. Joseph Laudie

Who are you? I’m Dr. Joseph Laudie. I’m a proud member of the Class of 2009 of the University of Missouri – Kansas City, and I am a solo practitioner in a dental practice in Emporia, Kansas.

If you could have any job OTHER THAN dentistry, what would it be? I had previous business experience before becoming a practice owner, and I could see myself running some other sort of business, as well as teaching others how to be successful in business.

Why did you choose being a solo practice owner? I knew that I wanted to own a practice after completing my GPR. I found a thriving practice where the owner was retiring. There wasn’t really a transition; he stepped out and I stepped in. On balance, things went well, and patient retention has been fantastic!

Biggest surprise so far about what you do? Being a business owner can be a headache and involve long hours in the office! While I enjoy directing my business, I cannot do it all by myself. I have found that it’s important for me to do what I do best and let others do what they do best to be successful. For example, offering care to my patients is what I am good at, but designing and building my new website is best left to the web developers. As often as I can, I bring on other professionals to help me with the important parts of my business that aren’t directly connected to patient care like tax planning, marketing, insurance and so forth.

What’s your schedule like? I work four days each week from 8 until 5 with an hour lunch. I see two hygiene patients each hour, and I have two assistants working chairside, with another two members of our team at the front desk. I’m proud to say we’ve increased the number of active patients in the practice by 63% over the past three years, so we are a busy practice!

What are you doing for fun? I have three kids, with a fourth on the way, so that occupies a lot of my time. Family and church helps me to balance out the experience of being a business owner. I am a ham radio operator. And recently I completed the Dirty Kanza bike race – nothing like biking up hills on gravel roads for a couple hundred miles to relax and unwind!

Any advice for someone considering your career path? A GPR was very helpful for me. Not only did it boost my speed and abilities, it broadened my education giving me exposure to dental implants, wisdom teeth, bone grafting and medically complex patients. Plus I am the only general practice dentist in a 13 county radius who is licensed to offer IV sedation. I practice in a rural area and being able to offer these services has been a real plus to my patients.

What are your plans for the future? This is the early phase of my “master plan.” I hope to bring on a second dentist as a practice partner, and to increase the number of referrals I receive from my colleagues who don’t offer the same mix of procedures that I do.

Interested in sharing your experience as a new dentist? If you are fewer than ten years out of dental school we’d love to hear from you! Contact us at newdentist@ada.org.

Life as a New Dentist — Community Health Center

Dr. Kari Cunningham

Dr. Kari Cunningham

Life as a New Dentist — Community Health Center

The ADA is made up of individuals — here’s one of them.

Who are you? I’m Dr. Kari Cunningham. I’m a proud member of the Class of 2010 of Case Western Reserve University. I completed a pediatric residency in 2012, and today I am a pediatric dentist in a community health center in Cleveland, OH.

If you could have any job OTHER THAN dentistry, what would it be? Event planner! I am always planning a social event or fundraiser for the organizations I’m involved in. I have the best time coming up with a theme, creating invitations, promoting the event and seeing it all come together!

Why did you choose this career path? I am a National Health Service Corps scholarship recipient, so I am happy to be fulfilling my service commitment so close to my hometown. I’m passionate about serving the underserved.

Biggest surprise since leaving dental school? I was asked to be an adjunct faculty at dental school! Giving lectures to first year students is encouraging to me — they are so motivated and willing to learn. I just completed University of California, San Diego’s three week faculty development program Addressing the Oral Health Needs of the Underserved.

What’s your schedule like? My job is 8:30 – 5:30. Outside of that I serve on the executive committee of our alumni association, I am active in National Health Service Corps, and being part of a sickle cell family, I have joined the board of the American Sickle Cell Anemia Association. I have learned to better manage my schedule, and I no longer say yes to everything!

What are you doing for fun? I just bought a house, and I’m enjoying the process of turning that into a home. I love spending time with my family and our Cunningham Sunday Fundays. And I’ve got a pediatric dentistry mission trip planned to Kenya that will overlap with my 30th birthday. This will be my second trip to Africa in ten years, and I’m very excited!

Any advice for someone considering your career path? If serving the underserved is your passion, look into the National Health Service Corps and other entities that can assist you in sharing your craft with our nation’s most vulnerable population. For the scholarship, apply early and apply often! Look into loan repayment opportunities as well. Learn about underserved populations and realize how you can play a significant role in improving the lives of many. If you like teaching, find a mentor and volunteer to facilitate small group sessions at your school or serve as a liaison to a pre dental society. Our future colleagues want to learn from you!

What are your plans for the future? Ever since I was a resident I have tracked my immediate, short and long-term goals. Working at this health center as its first and only pediatric dentist is an early part of my plan. Becoming a private-practice owner and teaching in a dental school are my long term goals.

Interested in sharing your experience as a new dentist? If you are fewer than ten years out of dental school we’d love to hear from you! Contact us at newdentist@ada.org.

Real Talk from New Dentists in Private Practice

Dr. Jill McMahon

Dr. Jill McMahon

The panel discussion Real Talk from New Dentists in Private Practice just concluded. The wide-ranging conversation covered topics from improving efficiency to marketing the practice.

According to the most recent ADA Survey of Dental Practice just over 88% of dentists are owners, either as solo practitioners or partners. For almost every dentist, ownership becomes a consideration at some point in his or her career.

Earlier this year ADA New Dentist News spoke with several new dentists who were new to practice ownership to get their suggestions on how to approach ownership. Dr. Jill McMahon, who graduated from dental school in 2007, is not just the first dentist in her family, she’s also the first small business owner.

“At first it was scary, thinking about all the new responsibilities, and of course the new financial obligations that go with ownership,” Dr. McMahon remembers. “What helped a lot was connecting with other dentists who were in my situation and realizing that if they could do it, I could do it too!”

If you are attending the 2013 ADA Annual Session, you have lots of opportunities to connect with other new dentists. But if you aren’t at the meeting, what’s on your action plan to make sure you can get that real talk from other new dentists exploring their private practice options? Share your suggestions in the comments. And if you don’t have any networking events on your calendar, may we suggest the 2014 New Dentist Conference July 17-19 in Kansas City, Missouri.

Life as a New Dentist — Associate

Dr. Anna Schultz

Dr. Anna Schultz

The ADA is made up of individuals — here’s one of them.

Who are you? I’m Dr. Anna Schultz. I’m a proud member of the Georgia Regents University College of Dental Medicine Class of 2012, and I am working as an associate for a wonderful practice in Newnan, Georgia.

If you could have any job OTHER THAN dentistry, what would it be? I’m an avid reader and writer, so I love the idea of being an author or editing a magazine. Of course, there’s nothing about being a dentist that stands in the way of me pursuing those interests!

Why did you choose to become an associate? After completing my AEGD program earlier this year, I was looking for a practice setting where I could hone my clinical and treatment planning skills while developing patient relationships, all without the responsibility of running and maintaining a business. Now that I’m actually in an associateship, I’m confident that this is the best place and environment for me!

Biggest surprise so far? Treatment planning is challenging! During dental school and residency, the administration would give our patients significant discounts because their priority was to give us the best education. But in the real world, there is insurance, there are budgets, and not everything we plan is financially feasible for patients. It highlights the importance of developing rapport with patients and gaining their trust, so that they will be engaged in their own oral health.

What’s your schedule like? It’s amazing how much free time I find myself with since graduating from dental school! I currently work four days per week and those days change so that every other weekend is a four-day weekend (not bad, huh?) Most mornings start with a team huddle at 7:30, and we finish for the day between 5:00 and 5:30. On Fridays, we huddle at 6:30 and finish between 2:00 and 2:30.

What are you doing for fun? I enjoy running, biking, working out, trying new restaurants and listening to live music. I’m also working my way through a long list of novels that took a back seat to lectures and research while I was in dental school and residency.

Any advice for someone considering your career path? Completing an AEGD program after dental school was one of the best decisions I ever made. A year of busy practice and more education in advanced techniques and procedures immensely improved my clinical skills and speed, and gave me more confidence in my treatment planning ability and knowledge of clinical dentistry. I know every program is not created equal, but mine was invaluable.

What’s the best thing about being a new dentist? Being excited about everything! I love coming to work in the morning, and I am so happy to work with such an exceptional team and wonderful patients. It makes the work not seem like work at all, and it reaffirms why I love my career!

Interested in sharing your experience as a new dentist? If you are fewer than ten years out of dental school we’d love to hear from you! Contact us at newdentist@ada.org

Not going to New Orleans? Join the ADA Meeting Online at ADA365

Annual Session LogoGo to ADA.org/ADA365 and you can

•    watch President Bill Clinton’s address live on Thursday, October 31 (not available on-demand)

•    view Education in the Round courses

•    sit in on the hottest lectures

•    take a virtual tour of the Dental Office Design Center.

Access to ADA365 is free to members; non-members can sign up for $50. Visit ADA.org/ADA365 to join the experience!

Looking for CE? While continuing education credit is not offered on ADA365, select courses from the 2013 meeting, including the Pride Institute Technology Expo will be available at ADA CE Online for credit after the meeting. To learn more about ADA CE Online, including unlimited access through the ADA CE Online Loyalty program, visit ADA CE Online at ADACEOnline.org.

All this CE for One Flat Fee

ADA CE Online logoThe ADA CE Online Loyalty Program gives you access to the entire ADA CE Online course library for one year and one flat fee of $479 for ADA members (non-members pay $719.) Take as few or as many courses as you like – as the course library grows, so do your CE options!

Choose from a variety of educational courses featuring embedded video, live-patient dental procedures, and case study examples to enhance your education.

Imagine having a library of CE courses at your fingertips for one year and never having to search for an online CE opportunity again!

If you’d like to learn more, or if you are ready to get started visit ADACEonline.org.

I Wish I Had Known…Exploring My Options

Dr Ryder Waldron

Dr. Ryder Waldron

By Dr. Ryder Waldron

When I was in dental school I was under the incorrect assumption that all dentists were private practice owners. I thought that I either had to buy an existing practice from a retiring dentist or start my own from scratch. I became a practice owner right out of dental school. It was a struggle to make ends meet for several years.

I wish I had explored more options.

  • I wish I had a course in dental school to help me with that exploration
  • I wish I had started researching before my third year in dental school.
  • I wish I had considered an associateship, an employee situation, or other approach to earning a living immediately after graduation

Ask yourself this question: Why did I choose dentistry?

  • To be your own boss?
  • To earn a comfortable income?
  • To set your own hours?
  • Because you’re a people person?
  • Because you’re good with your hands?

These are all questions that I wish I had answered before setting out on a career in dentistry.

The good news is that it all worked out and I’m thrilled to be doing what I love every day. But I could have saved myself a lot of time, stress and money by doing more research prior to graduation.

That said – now that I’ve been there, I’ll know to take a step back and evaluate things before I make any major career changes in the future. I will get advice and input from other dentists who have come before me. And I will continue to share what I’ve learned with my dentist colleagues along the way!

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Dr. Ryder Waldron is a proud member of the class of 2003 of Marquette University School of Dentistry and the co-author with Dr. Marcus Neff and Dr. Troy Stevens of the book So You Want To Be A Dentist? What you Must Know To Succeed In Dentistry.

Want to be more productive? Get the Happiness Advantage

New Dentist Reception

Happiness is hanging out with colleagues

At the Build Network blog, Jeffrey Goldsmith writes about happiness expert and former Harvard researcher Shawn Achor. In the research projects, Achor primes some subjects to be happy (by giving them candy.) The takeaway is that happy people outperform others:

“I can give you an SAT test, a Sudoku puzzle, a crossword puzzle – any of 15 different tasks all requiring intelligence – and prime you to be in a happy group, a neutral group or an unhappy group,” says Achor, citing a study of 65,000 businesspeople. “The happy group will outperform the others every time.”

How can you apply this approach yourself? During one tax season, Achor managed to improve both the happiness and productivity of tax managers at the accounting firm KPMG simply by asking them to do one of these tasks during the workday:

  • Jot down three things you are grateful for
  • Write a positive message to someone in your social support network
  • Meditate at your desk for two minutes
  • Exercise for 10 minutes
  • Take two minutes to write down in a journal the most meaningful experiences of the past 24 hours

How about you — is there anything in your daily routine that contributes positively to your workday? Leave your suggestions in the comments.

Ethical Dental Marketing

Young girl using tabletNo matter whether you are an employee, an owner or practicing in another setting, the way you market yourself as a dentist must be ethical, as well as effective. Consult the ADA Advertising Basics for Dentists and Dental Associations: A Guide to Federal and State Rules and Standards for information on common questions dentists have when preparing marketing materials.

Find information on assessing an advertisement for problems, substantiating claims made in advertisements and navigating the ethical considerations of newer marketing tactics such as deal-of-the-day social couponing sites.

Truthful advertising can be a solid foundation for building a trusted dentist-patient relationship. Be sure to consult your local and state dental associations and your own legal counsel for advice.