Quick answer: The biggest tax savings for dentists usually come from timing equipment purchases with Section 179 or bonus depreciation, paying yourself a reasonable S corp salary, and funding a retirement plan such as a 401(k) with profit sharing. Because dentistry is a health service, higher earning owners may get a reduced QBI deduction, so planning before December 31 matters.
Dentists often earn well and spend heavily on equipment and staff, which makes tax planning especially valuable. Here are the areas that matter most for practice owners.
Common deductions for dentists
- Dental supplies and lab fees
- Equipment, technology and software
- Staff payroll, benefits and payroll taxes
- Rent, utilities and office expenses
- Malpractice and business insurance
- Continuing education, licenses and professional dues
- Marketing and patient communication tools
Equipment: Section 179 and bonus depreciation
Big purchases like imaging systems, chairs and scanners can often be deducted much faster than their useful life. Under current federal law, Section 179 lets you expense qualifying purchases up to a high annual limit, and 100% bonus depreciation is available for qualifying property acquired after January 19, 2025.
Virginia note: Virginia does not follow federal bonus depreciation, so a large federal deduction may be partly added back on your Virginia return. Plan big purchases with both returns in mind.
Financing equipment does not prevent you from deducting it. The deduction is based on when the equipment is placed in service.
S corp salary for practice owners
Many dentists operate as S corporations to save self employment tax. You must pay yourself a reasonable salary for the work you do, and the rest of the profit can be taken as distributions. Read our guides to LLC vs S corp and how to pay yourself.
The QBI deduction and dentists
Dentistry counts as a health service for the qualified business income deduction. That means the 20% deduction phases out for owners whose taxable income is above the annual threshold, so many higher earning dentists receive a reduced deduction or none. Retirement contributions and owner pay can affect where you land.
Retirement plans
A 401(k) with profit sharing lets owners save significantly more than an IRA. Higher earning practice owners sometimes add a cash balance plan to make even larger deductible contributions. The right plan depends on your income, age and staff.
Associates: W-2 or 1099?
Paying an associate as a 1099 contractor only works if they truly operate independently. If the practice sets their schedule, supplies and methods, they are likely an employee. Getting this wrong can lead to back payroll taxes and penalties. See our payroll services for help.
→Related guideDental Bookkeeping in 2026: Best Practices and a Monthly ChecklistGood tax planning depends on clean monthly books, and this checklist shows how dental practices keep them.Dentist Tax FAQs
What is the Section 179 limit for 2026?
The Section 179 limit is adjusted for inflation each year. Virginia has its own rules for depreciation, so the state result can differ from your federal return.
Can dentists deduct continuing education?
Yes. Courses, seminars and related travel that maintain or improve your skills as a dentist are generally deductible business expenses. Education that qualifies you for a new profession is not.
Is it better for a dentist to be an S corp?
Often, once profits are well above a reasonable salary for your role. The S corp can reduce self employment tax on the remaining profit, but it adds payroll and a separate return, so run the numbers first.
Can a dental practice deduct equipment bought on a loan?
Yes. The deduction is based on when the equipment is placed in service, not when you finish paying for it. Interest on the loan is also generally deductible as a business expense.
Do associate dentists get the QBI deduction?
An associate paid on a W-2 does not get the QBI deduction on wages. An associate who is truly an independent contractor may qualify, subject to the income limits for health services.
Plan before year end
Our tax planning service reviews equipment purchases, owner pay and retirement options before December 31. We serve dental practices across Northern Virginia, DC and Maryland.
This article is general information and not tax advice for your situation. Tax rules change, so talk with a qualified professional before making decisions.
