Whatever profession you’re involved in, approaching your finances in a proactive and year-round manner can go a long way towards preventing an unpleasant surprise when your tax bill lands, and this includes those with potential for high earning, such as medical and dental professionals.
But many dental professionals aren’t aware of exactly what they can write-off in taxes each year, which if they don’t seek advice from a dental tax specialist, often leaves them paying more than they need to.
If you’re a dental professional worried about overpaying on your taxes because you aren’t taking advantage of all the credits you’re entitled to, checking out the list of top dental deductions below and working with an expert in tax planning for oral surgeons, could stop you ever overpaying on your taxes again:
Everyday deductions
With many operational costs being deductible for dental professionals, such as lab fees, employee payroll, office rent, utilities and dental supplies, there are plenty of opportunities to make big tax savings. However, you must keep detailed records of every expense, otherwise they’re unlikely to be accepted.
Equipment and tech
Much of the specialist technology and equipment used by dentists and oral surgeons is seen by the IRS as a necessary cost for this profession, meaning that significant tax deductions likely apply. That said, working with a dental tax expert is the best way to ensure that you maximize these deductions, as it’s not just about what you’re able to deduct, but when you should do it.
Practice management and software
Just as deductible as physical equipment, from digital imaging software right through to billing software, provided your documentation is maintained properly, you can deduct such software and any associated expenses, including training or ongoing support for using the software.
Section 179 and bonus depreciation
Allowing businesses to make deductions for qualifying new or used software and equipment in its year of purchase, Section 179 can be a powerful tax tool for dental practices. Bonus depreciation can also be used to great advantage for first-year deductions, but it’s important to work with a dental tax pro to make sure you’re leveraging these provisions correctly.
Insurance premiums
Business insurance premiums are considered by the IRS as costs associated with running a dental practice, but it’s imperative that you maintain meticulous records of every premium payment made.
Lawyer and accountant fees
The fees you pay for bookkeeping, tax prep or payroll services are all tax deductible, and should be included in your expenses record.
Marketing and advertising
Any money spent on legitimately promoting your dental practice, through your website, printed promotions or a social media campaign for instance, is considered fully deductible.
Professional memberships and continued education
To build a successful, modern practice, you need to invest in your team, and fortunately, much of what you do to enhance the wellbeing and skill of your team, is tax deductible. From salaries and benefits, to professional memberships and continued education, these investments should be included in your primary financial strategy, and can help lower your tax liability.
Pay and benefits
It might be one of your practice’s biggest expenses, but salaries, commissions bonuses and paid leave, are all fully deductible, as are the benefits you offer your team, such as contributions to retirement funds and health insurance plans.
Training and development
To help your team perform at their best, ongoing training and development is a must. As you might have guessed by now, these costs are also fully deductible, and accounting for orthodontists can ensure that every ounce of money you invest in the future development of your team, is taken advantage of through legitimate deductions, backed up with solid documentation.
With help from a dental tax expert, you need never overlook any tax deductions ever again, and provided you keep meticulous records for every qualifying expense, you can significantly reduce your overall tax liability.
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