What Expenses are Tax-Deductible for Dentists?

Starting up a dental business can be one of the most fulfilling achievements you do in your career, but it is also an investment. A lot must be sacrificed and put into the company to see it flourish on the other side. Many expenses go into dentistry, such as dental and office supplies, along with wages and overhead. Luckily, many expenses are tax-deductible for dental practices, lowering the tax you must pay. 

Expenses that are solely from your business have the chance to be written off. What does that all consist of? This blog will outline the major costs that are considered tax-deductible for your dental practice so your company can thrive as best as possible in the economy. Consult with an accountant at Cooper Norman to ensure that no expense is overlooked and all are taken into consideration.  

Note: Before writing off these expenses, consult with an accounting professional to ensure they are eligible and accurate. While they may be considered tax-deductible expenses, an accountant can look at all the details of your practice specifically, such as background information, how often something is used, net income, number of employees, etc. At Cooper Norman, we can help ensure your business is compliant with tax regulations while also maximizing the savings you can have. 

1. Equipment and Supplies 

One of the biggest dental expenses for your practice is getting all the equipment needed and updating it when necessary. Dental equipment is essential for a fully operating dental practice. Equipment such as x-ray machines, drills, chairs, and other tools can be deducted from taxes. According to Section 179 for tax deductions, the equipment must be used at least 50% of the time to qualify as a tax write-off. 

Office supplies used for everyday business tasks can also be deducted. This can include printers, paper, computers, and software systems. Any essential supplies that are used only for dental office purposes can qualify, 

2. Rent 

Whether renting out an office or seeing patients in your home, this can be considered for a tax write-off. Wherever you perform your services is considered a business expense. You can write off a portion of your rent at an in-home office for business purposes. 

3. Uniforms 

Because dentistry requires certain clothing to be worn on the job, it is considered tax deductible. This can include scrubs, lab coats, or any other necessary clothing. The main determinant for clothing to be considered tax-deductible is if it doesn’t double as normal clothing and isn’t worn for ordinary, everyday wear. 

4. Start-Up Costs 

If you are opening up your own dental practice, expenses such as initial equipment, software, dental accounting services, legal fees, etc. can qualify for a tax deduction. Starting a business can be overwhelming with all the expenses involved, so take advantage of the $5,000 given by the IRS to help you in these beginning stages. 

5. Business Travel 

If you are traveling for business purposes, your accommodations can be considered tax-deductible. This can include plane tickets, hotel stays, car rentals, etc. If you are traveling to receive more education or have a business meeting over a meal, these can be considered tax-deductible as well. 

6. Insurance 

As a business owner, you probably pay for many different insurance plans. Most, if not all, are eligible to be deducted from taxes. This can include property insurance, health insurance, malpractice insurance, etc.  

7. Employee Salary & Retirement Plan

Many expenses are incurred from paying employees. Whether it is hiring and paying them a salary or contributing to their retirement plan, these expenses can start to add up. Luckily, portions of these expenses can be written off. 

Trust Cooper Norman with Tax Planning

At Cooper Norman, we want to help you maximize your savings and avoid overpaying your taxes. We also want to ensure that you are compliant with the IRS regulations regarding taxes. We know how overwhelming taxes can be for a business. We are here to make your life simple and help your dental practice operate as smoothly as possible.