Most dental practices businesses overpay by tens of thousands every year. Here are the deductions, credits, and strategies that get overlooked.
Dentists over 40 earning $500K+ contribute $23,500 to a 401(k) and think their retirement planning is maxed out. A properly designed defined benefit plan layered with a cash balance plan allows $300K+ in additional annual tax-deductible contributions. This single strategy reduces taxable income by $300K+, saving $120K+ in taxes annually at a 40% combined rate. It is the highest-impact strategy available to dental practice owners.
Every one of these applies to dental practices businesses. If you're not claiming them all, you're overpaying.
Layer a defined benefit plan with a cash balance plan and 401(k) to shelter $350,000+ annually. Far exceeds the $23,500 employee 401(k) limit. Contributions are 100% tax-deductible to the practice.
$80,000-$140,000 in annual tax reduction for dentists over 40Section 179 allows immediate write-off of CBCT scanners ($100K-$200K), CAD/CAM milling systems ($150K+), digital impression units, and intraoral scanners instead of 5-7 year depreciation.
$45,000-$80,000 in first-year tax savings per major equipment purchaseDental offices have specialized components qualifying for accelerated depreciation: plumbing for dental chairs, compressed air and vacuum systems, nitrous oxide delivery, cabinetry, and lead-lined X-ray rooms.
$60,000-$150,000 in first-year deductions on a $1M+ facilityOwn the dental office through a separate LLC that leases to the practice S-Corp. Protects real estate from malpractice claims, creates a deductible lease expense, and allows independent cost segregation.
$25,000-$60,000/year in combined benefitsPrepaying for lab work and stocking dental supplies before year-end creates legitimate deductions in the current tax year. Practices can accelerate $20K-$50K in supply purchases for immediate deduction.
$8,000-$20,000 in accelerated deductionsCE courses, dental conferences, travel to educational events, and associated lodging/meals are fully deductible. Many dentists attend multi-day CE events without tracking the full cost.
$5,000-$15,000/yearStructuring associate compensation as a percentage of collections vs. fixed salary has different tax implications for the practice. Proper modeling can optimize QBI deduction and SE tax across the ownership structure.
$10,000-$30,000/year in entity-level optimizationSEO, Google Ads, social media marketing, website development, and patient management software are fully deductible. Many practices pay for these personally without running them through the business.
$5,000-$20,000/year in properly captured deductionsWrite off qualifying equipment and assets in the year you buy them, instead of spreading deductions over decades.
A single CBCT scanner ($150K) and CAD/CAM system ($200K) purchased in the same year generates $350K in first-year deductions, saving $105K-$140K in taxes at a 30-40% effective rate.
Learn more about bonus depreciation in 2026 →Credits reduce your tax bill dollar-for-dollar. These are the ones most commonly left on the table in dental practices.
Developing new treatment protocols, testing materials, and implementing new digital workflow processes can qualify as R&D activities.
Credit for making dental offices accessible to patients with disabilities.
Credit for providing health insurance through SHOP marketplace to staff.
S-Corp is essential for dental practices to split income between salary and distributions, saving SE tax. Real estate LLC protects the property and enables independent tax strategies. Equipment LLC useful for DSO-scale operations.
Salary/distribution split saves $30K-$60K in SE tax. Enables defined benefit plan where owner is primary beneficiary. QBI deduction available but note SSTB limitations for high-income dentists.
Section 105 medical reimbursement plan can cover 100% of the owner's medical expenses tax-free. Otherwise rarely optimal due to double taxation.
Default for real estate and equipment holding. Avoid for the practice itself due to SE tax exposure on all net income.
For a $1M-$5M revenue dental practice. Solo practitioners with high income benefit most from retirement plan stacking. Multi-location DSOs see additional savings from entity structuring and cost segregation across properties.
For businesses doing $1M–$5M in revenue
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