If you want immediate tax savings for your dental practice, the quickest wins usually come from three places: tightening up your entity structure, claiming all available deductions (especially equipment and retirement), and making sure your spouse and family are paid correctly for real work. Those steps, handled properly and documented well, can lower your tax bill this year, not five years from now. A firm that focuses on Immediate tax savings for dental practice owners can walk you through it, but you can also start to understand the main moves yourself right now.
It might sound strange to talk about tax savings on a site aimed at people who care about art, but if you think about it, a dental practice is very close to a studio. You work with your hands. You shape, restore, adjust. You balance tools, light, color, and symmetry. The only difference is that your pieces walk out the door and then floss.
Tax planning feels less creative than a canvas, but it has a structure, almost like composition. You decide what is in the frame, where the money goes, what is highlighted, and what stays in the background. If you ignore that part, the government will do its own version of “composition” for you, and it is rarely flattering.
Why dentists often overpay taxes without realizing it
Most practice owners are good at clinical work and reasonably good at running the office. The tax side tends to lag behind. Not because dentists are careless. Usually the opposite. They are busy, careful with patients, and then tax planning gets handled once a year in a rush.
Common problems:
- No clear entity strategy (LLC vs S corp vs partnership)
- Missed deductions for equipment, software, and CE courses
- Poor documentation for home office or auto use
- No real retirement plan strategy for high income
- Spouse and family not on payroll even though they help
The odd part is that most of these are fixable fairly quickly. Some changes work only if you act before year end. Some can help even right after year end if your accountant is willing to amend returns or adjust elections.
Many dentists focus on saving money on supplies, but ignore bigger savings hiding in their tax return layout.
Art-minded readers might see the pattern here. You can spend a long time fixing a tiny part of a painting, or you can step back and move the main subject a little and everything gets better. Tax planning works like that too.
Choosing the right entity: is your practice set up correctly?
This part affects a lot of your other choices. It shapes payroll, retirement, and how your income is taxed.
Most small dental practices in the US are one of these:
- Sole proprietor or single-member LLC
- S corp (often an LLC taxed as an S corp)
- Partnership or multi-member LLC
Why S corps are so common for dentists
You have probably heard this line: “Form an S corp and save on self-employment tax.” That is partially true but often oversold. Here is the simple idea.
If you run your practice as:
- Sole proprietor or regular LLC: most profit is subject to self-employment tax.
- S corp: you pay yourself a salary (subject to payroll tax) and the rest of the profit can avoid some of that tax, if the salary is reasonable.
The tension is around “reasonable.” The IRS wants owner-dentists to pay a fair salary that matches what someone would pay another dentist for the same work.
If you are drawing $350,000 from your practice and calling only $60,000 “salary,” that is probably too low. If your skills, production, and market point to $200,000 as a fair salary, then paying $200,000 as W-2 wages and taking $150,000 as S corp profit can give a real tax benefit.
Immediate savings often come from correcting an unreasonable salary, not from some hidden loophole.
Quick comparison of practice types and tax impact
Here is a simple view. It is not perfect, but it gives you a sense of how structure influences tax planning.
| Structure | Who it fits | Tax impact | Immediate opportunities |
|---|---|---|---|
| Sole proprietor / single-member LLC | New solo dentist, small practice, lower profit | All profit subject to self-employment tax | Consider S corp election once profit is steady |
| S corp | Profitable solo or small group practice | Split between salary and S corp profit | Adjust salary, refine payroll, add retirement plan |
| Partnership / multi-member LLC | Group practice, multi-owner office | Complex tax reporting, profit sharing questions | Review agreements, consider S corp structures |
If you do not know what your entity is or how it is taxed, that is the first red flag. Ask your CPA: “Am I currently taxed as a sole proprietor, partnership, S corp, or C corp?” If they cannot explain it in simple terms, or if you still feel confused after the explanation, that is a problem worth fixing.
Equipment and Section 179: turning your tools into tax savings
In art, tools matter. The right brush, the right lens, the right tablet. In dentistry, you have handpieces, chairs, x-ray units, scanners, milling machines. Those are expensive. The tax code gives you a way to write off much of that cost quickly.
Section 179 and bonus depreciation let you deduct a large part of equipment costs in the year you place the asset in service, not slowly over many years.
How Section 179 can help this year
Say you bought:
- $70,000 CBCT scanner
- $30,000 CAD/CAM system
- $10,000 computers and software
Total is $110,000.
If your taxable profit before this is, say, $300,000, you can often choose to write off a good portion of the $110,000 this year. That can drop your taxable income right away.
There are rules and limits. Section 179 is capped and tied to income. Bonus depreciation percentage changes over time. Most dentists do not need to know every line of the code, but you need to track:
- Cost of each piece of equipment
- Date placed in service
- Invoice and payment records
Without that, your accountant cannot safely take the full deductions. I have seen practices where a $50,000 chair sits in the clinical notes, but never shows up correct on the depreciation schedule. That is money left on the table.
If your practice has upgraded equipment in the last 12 to 24 months, you should ask for a fresh depreciation review before you file the next return.
What about small creative touches in the office?
Since this website focuses on art, it is worth touching on aesthetics in a practice. Many dentists care about the visual part of the space:
- Original art on the walls
- Custom photography
- Logo, branding, and graphic design
- Lighting, furniture, and decor
Most of those costs are not treated as “equipment.” They are usually:
- Marketing expenses
- Office decor
- Leasehold improvements
If you buy prints or paintings for the waiting room, that can be deductible as a business expense when used to create the practice atmosphere. There are some gray areas, especially if you like to rotate work and also enjoy collecting. If something is half personal and half business, your accountant needs to know that.
The broader point is: your eye for visuals can intersect with tax planning. Document what was bought, from whom, and for what space. That photographic series of close-up smiles on your wall is not just art. It is part of the business identity, and likely a deductible cost.
Retirement plans that cut taxes today
A lot of dentists complain about their tax bill and at the same time underfund retirement. That is a strange combination, because retirement contributions are one of the cleanest ways to lower taxable income.
For a profitable solo or small group practice, the main options are:
- Traditional 401(k) with profit sharing
- Cash balance plan plus 401(k)
- Simple IRA or SEP IRA for smaller or newer practices
401(k) with profit sharing
If you are under 50, you can defer a set amount as employee contributions. If you are 50 or older, you get extra catch-up contributions. Then the practice can add profit sharing contributions. In many setups, the owner-dentist can reach total contributions in the high five figures each year.
This does three things at once:
- Lowers current taxable income
- Builds retirement savings
- Helps retain staff if you include them
Some owners worry about contributing for employees. That is valid. But in many cases, the tax savings and long term benefits outweigh the cost. The challenge is to design the plan carefully, which needs actuaries or at least a specialist.
Cash balance plan for high income dentists
Once your income reaches a certain point, a 401(k) alone may not feel like enough. A cash balance plan is a type of defined benefit plan that can allow much larger contributions, often in the six-figure range, depending on age and income.
If your practice is strong and you are willing to commit to stable contributions for several years, a cash balance plan can reduce taxable income sharply. I will admit, I am a bit cautious about these for very new practices. The commitment is not small. But for a mature, profitable office, it can be a powerful tool.
For someone who loves art, you can think of it like working on a large canvas over several years. You cannot just stop halfway without impacting the result. If you are not ready for that kind of steady work, you might stay with a smaller piece, like the 401(k) alone.
Paying your spouse and family correctly
Many dental practices are family efforts, even if only one person holds the license. A spouse may handle:
- Bookkeeping
- Marketing and social media
- HR paperwork
- Decor and patient experience
Older children might help with filing, cleaning, or digital tasks. That time can be real work, and if so, it can be real payroll.
But the key is “real work” and “reasonable pay.” You cannot just add your spouse to payroll without hours, tasks, or a job description. That invites trouble.
When done correctly, paying family members can:
- Shift income to family members in lower tax brackets
- Build retirement or Social Security history for them
- Turn some family-level spending into deductible practice payroll
For example, your spouse may already be doing 15 hours a week of admin tasks. If the market rate is, say, $25 per hour, you pay that, track time, issue a W-2, and handle payroll taxes. That is clean. Your practice gets a deduction, and the spouse gets income that can be used for an IRA contribution.
Some dentists are nervous that this looks suspicious. It does not, if records are good and pay is realistic. To be blunt, the suspicious version is when the spouse is “on payroll” but never appears at the office.
Home office, auto, and mixed-use expenses
This part is often messy. Many owners either claim nothing because they fear an audit, or they stretch too far and make everything look like a business expense.
There is a middle ground.
Home office for dental practice owners
Office work does not only happen at the clinic. You might:
- Review charts and treatment plans
- Plan marketing
- Handle payroll and bookkeeping
- Study CE courses or do case planning
If you use a room in your home regularly and exclusively for practice work, a home office deduction can apply. That can include a share of:
- Rent or mortgage interest
- Utilities
- Property taxes
- Internet costs
The key words are “regular” and “exclusive.” Your dining table does not count if you also eat there. A small room that you use only for admin work probably does.
I think this is one of those areas where your risk comfort plays a role. Some dentists prefer to be very conservative and ignore home office, even if they clearly qualify. Others push too far. A calm talk with a tax professional can help you find a reasonable line.
Car use for business
Visits to labs, supply houses, CE courses, and business meetings are business miles. Commute miles from home to your fixed office are not. That rule frustrates many owners, but it is how it is set up.
You can track miles with a dedicated app or a notebook in the glove box. The key is:
- Date
- Purpose
- Start and end miles
Then your accountant can choose the better route for that year: standard mileage rate or actual expenses. It is not glamorous work, but the savings add up over years.
Marketing, photography, and creative work
Here is where the overlap with art becomes more interesting.
Modern dental practices use:
- Professional photography for before-and-after cases
- Video for patient education
- Graphic design for logos and printed materials
- Website design and social media content
All of these are usually marketing or advertising expenses. They are usually fully deductible in the year you pay for them.
If you hire a local photographer or designer who also shows work in galleries or online, that fee still counts as a business cost. It is the purpose that matters: you are paying for promotion of the practice.
I sometimes see dentists shy away from professional creative support because they see it as “extra.” Yet, they tolerate a high tax bill. That feels backwards to me. You can support local artists, improve your brand, and still deduct those costs as legitimate business expenses.
So if you are reading this as an artist, you might wonder: why should I care? Well, some of your clients may be dentists or other professionals who can deduct the work you do for them. Understanding that can help you price and explain your services more clearly.
Cleaning up your bookkeeping for instant clarity
Tax savings usually start with clean books. If your income and expenses are tangled, a CPA has less room to move quickly.
Red flags in dental practice books:
- Personal and business spending mixed on the same card
- No clear chart of accounts for dental-specific expenses
- Owner draws recorded in strange ways
- Year-end adjustments that you do not understand
I know bookkeeping feels boring, especially compared with crown preps or ceramics or watercolor. But it is similar to preparing a canvas. If the gesso is uneven, the painting never quite looks right, no matter what you put on top.
A short list of accounts most dental practices should track separately:
- Clinical supplies
- Lab fees
- Equipment and furnishing
- CE and professional dues
- Advertising and marketing
- Staff wages and benefits
- Owner compensation (salary vs distribution)
When these are clean, a tax person can more easily look for:
- Missed deductions
- Misclassified items that should be depreciated
- Patterns that suggest a better entity or salary strategy
Good books do not magically lower your tax, but they make every smart tax move possible, fast.
Timing moves before and after year end
Some tax moves only work if done before December 31. Others can be fixed after. Knowing which is which matters if you want “immediate” savings rather than vague promises.
Before year end, you can:
- Adjust S corp salary
- Buy and place equipment in service
- Fund retirement contributions, depending on plan rules
- Make charitable contributions from the practice or personally
- Clean up shareholder loans or distributions
After year end, but before filing, you can often:
- Fine-tune depreciation elections
- Confirm home office, car, and travel records
- Set up or fund certain retirement plans, if you meet deadlines
- Review prior year returns for errors or missed benefits
If your tax professional only talks to you once a year in March or April, you lose many of these timing choices. For a dentist with high income, that tends to cost more than the fee for better advice.
Using art and design in the practice in a tax-smart way
Let us circle back briefly to the art angle, since that is why you are on this site in the first place.
Art in a dental office does more than look pretty. It:
- Reduces patient anxiety
- Differentiates the practice from generic clinics
- Reflects your personality and values
From a tax perspective, you want to think about:
- Is this piece mainly for the practice, or is it partly a personal collection item?
- Is the cost documented as a business purchase?
- Is the artist paid as a contractor with an invoice?
If you commission a mural for your office, that is almost always a business cost. If you buy a painting that you move back and forth between home and office, it starts getting fuzzy.
I think it is fine to admit that there is a gray area. Not every decision fits in neat boxes. But trying to pretend everything is either fully business or fully personal is not very realistic either. Good records and honest intent go a long way.
Questions to ask your CPA right now
If you want practical next steps, here are direct questions you can raise. They are not fancy, but they force clear answers.
Entity and compensation
- What entity type am I using, and why is it still the right choice for my current profit level?
- As an S corp, is my current salary really reasonable for my production and market?
- Could adjusting my salary this year create meaningful tax savings without raising risk too much?
Equipment and depreciation
- Can we review my asset and depreciation schedule for the last three years?
- Have we fully used Section 179 and bonus depreciation for recent equipment?
- Are any items misclassified that should be written off sooner?
Retirement and family
- Is my current retirement plan design still the best fit for my income and staff?
- At my income level, would a cash balance plan make sense, or is it overkill right now?
- If my spouse and older children do work for the practice, how should we structure and document that payroll?
A short example: turning a “plain” practice into a tax-aware one
Let me sketch something simple. Imagine Dr. K, a general dentist with:
- $1,000,000 in collections
- $350,000 in net profit before owner pay
- Two hygienists, three assistants, front desk team
- Office that has not been updated in ten years
Dr. K works as a single-member LLC taxed as a sole proprietor. He pays himself by taking draws. He hates dealing with forms, and his tax preparer files returns once a year without much talk.
In one year, Dr. K could:
- Elect S corp status and set a reasonable salary, say $220,000, with the rest as S corp profit
- Upgrade a few major equipment items and claim Section 179 or bonus depreciation
- Start a 401(k) with profit sharing, making strong contributions
- Put his spouse on payroll for truly handling HR and bookkeeping tasks
Total “visible” change in the office:
- New equipment and software
- Clear roles and pay for family help
- Retirement accounts funded
Total change for the IRS:
- New entity tax status
- Rebalanced wage vs profit income
- Higher deductions for equipment and retirement
- Payroll and retirement for spouse
The next tax return may look very different in terms of liability. Not through tricks, but through better structure. The bigger win, long term, is that these choices stack. Once the structure is in place, each new year builds on it.
Common mistakes that reduce your savings
I do not want to paint an overly clean picture. Things often go wrong.
Here are frequent mistakes:
- Switching to S corp with no thought about salary level
- Putting family on payroll without real work or records
- Using practice funds for personal art or luxury items and calling all of it “decor”
- Letting retirement plans run on autopilot while income rises far beyond the original design
- Ignoring book clean-up because it feels tedious
You may notice a pattern. Most of these are not advanced tax code issues. They are basic structure and discipline issues. Fixing them requires some thought, some time, and sometimes a bit of money. But the trade-off is usually clear if your income is high.
How this connects to creative work and your values
One last thought. Many dentists, and many artists, care about craft. You care about doing work that you are proud of. You may not care much about tax forms, and that is understandable.
Still, money supports craft. For a dentist, lower tax burden can mean:
- More freedom to buy better equipment
- A budget for original art and design in the practice
- Room to offer staff better pay or benefits
- Less pressure to cram every day with too many patients
For artists who work with professionals like dentists, architects, or physicians, understanding a bit of how their business spending works can help you talk their language. If you explain how your service fits their marketing or patient experience and is deductible, your offer becomes clearer.
You might not want to think of your studio invoices as part of someone else’s tax plan. But they are. Not in a cold way, just in a practical sense. That does not devalue the art. It can actually help more art show up in more spaces.
Common questions from dental practice owners, with short answers
Can I save taxes this year if year end is close?
Often yes. Changing salary, buying and placing equipment in service, and funding certain retirement contributions can all work close to year end, if handled quickly and documented well. But if you wait until tax filing season to ask, many options will be gone.
Are tax strategies for dentists very different from other small businesses?
Some are similar, like S corp planning and retirement. Some are more dental-specific, like how you handle large equipment, lab fees, and CE. The regular pattern of high, stable income in many practices also makes certain advanced plans more suitable than in very volatile businesses.
Is it risky to claim home office or car expenses?
It can be if you fake records or stretch the rules. With real logs, clear use, and consistent behavior, it is less dramatic than people fear. The bigger risk is usually sloppy or absent documentation, not the deduction itself.
Should I buy equipment just to lower my tax bill?
No. That is one place where I disagree with what some advisors say. Buying something you do not need is still worse than paying tax on money you keep. Tax savings should follow real business needs, not drive pointless spending.
How do I know if my current CPA is missing things?
Ask the questions listed earlier about entity choice, salary, depreciation, retirement, and family payroll. If the answers are vague, defensive, or full of buzzwords without clear numbers, that is a sign to seek a second opinion.
Where should I start if all of this feels overwhelming?
Start small. Clarify your entity type and your current salary vs profit mix. Then check your equipment records for the last couple of years. Once those are clear, you can move on to retirement plans and family pay. You do not need to fix everything at once. What single change would likely make the biggest difference for your next tax bill?