Further Tax Deduction Updates for Dentists: What Meal & Perk Changes Mean in Practice

Key Takeaways:

  • Several everyday deductions dental practices relied on are now limited or eliminated.
  • Employer‑provided meals and on‑site food are no longer deductible beginning in 2026.
  • Client meals and business travel meals continue to be 50% deductible with proper documentation.
  • These changes affect day-to-day spending decisions, not just year-end planning.
  • Practices should reassess perks, reimbursements, and cash‑flow assumptions now, not at filing time.

Earlier this year, we shared an overview of the broader tax deduction changes affecting dental practices in 2026: what changed, what stayed the same, and how to stay ahead. This follow-up takes a closer look at one area where many practices are now seeing real, day-to-day impact: meals, staff perks, and operating expenses that quietly lost their tax benefit as of January 1.

While these provisions aren’t new to the tax code, 2026 is the year they are fully phased out. For many dental practice owners, the impact is only now becoming clear, especially as routine expenses no longer reduce taxable income the way they once did.

These changes don’t mean your practice is out of compliance. But they do mean that assumptions built into your budgeting and tax planning may need to be updated to avoid surprises.

The Biggest Change: Employer-Provided Meals

For most dental practices, the most noticeable shift in 2026 is how employee meals are treated for tax purposes. Meals provided for the employer’s convenience are no longer deductible. This includes:

  • Breakroom snacks and beverages
  • Coffee and refreshments
  • Catered lunches
  • Meals provided during long workdays or late hours
  • On‑site cafeteria or food programs

This rule applies even when meals support productivity, keep staff on-site, or contribute to team morale. In prior years, these costs were partially deductible, but that benefit has officially expired.

However, some meal deductions remain intact:

  • Meals with patients, referral partners, vendors, or consultants are still 50% deductible, as long as there is a clear business purpose.
  • Meals during overnight business travel also remain 50% deductible with proper documentation.

For practices that treat food as part of their culture, this change isn’t about compliance; it’s about budgeting. The expense still exists, but the tax benefit does not.

2026 Deductibility Comparison Table

Here’s a quick glance at how common meal-related expenses are treated starting in 2026:

Expense TypeDeductible Before 2026Deductible in 2026
Employer-provided meals (on-site, convenience)50%0%
Breakroom snacks, coffee, beverages50%0%
Client / referral source meals50%50%
Employee travel meals (overnight travel)50%50%

Documentation and proper reporting remain essential.

What Dental Practice Owners Should Review and Update for 2026

While meal deductions tend to draw the most attention, they’re often just the first place where outdated assumptions show up. The broader issue for many dental practices is that certain expenses still exist, but no longer deliver the same tax benefit they once did.

To stay ahead of surprises, this is a good time to review:

  • How compensation, benefits, and non-cash perks are structured
  • Whether certain fringe benefits should now be treated as taxable wages
  • Recurring expenses that were previously deductible but no longer are
  • Whether certain perks still make sense without a tax offset
  • Timing of equipment purchases or office improvements
  • Whether some expenses should shift from the practice to the personal level
  • Cash flow projections built around deductions that no longer apply
  • Documentation for client meals, travel meals, and reimbursements

This isn’t about alarm or drastic change. It’s about making sure your planning reflects today’s tax landscape, not rules that quietly expired. Addressing these items proactively almost always leads to better outcomes than trying to retroactively adjust at year-end.

Our Take: Awareness Beats Surprise

Tax laws don’t always change with big headlines. Sometimes they shift quietly in the background. The impact often shows up only when the numbers don’t look the way you expected.

At Edwards & Associates, we help dental practice owners understand how current tax rules influence real‑world decisions, from payroll and perks to cash flow and long‑term planning. If your practice may still be operating under assumptions from prior years, now is the right moment to revisit them. If you’d like to review how the 2026 deduction changes affect your practice specifically, our team is ready to walk you through the details long before small changes turn into costly surprises.

A New Federal Education Tax Credit Is Coming in 2027

Key Takeaways

  • A new federal education tax credit under Section 25F begins in 2027, but it is capped at $1,700 per year and is nonrefundable.
  • The credit is only available if a taxpayer’s state opts in and certifies eligible Scholarship Granting Organizations (SGOs).
  • Contributions used for the SGO credit cannot also be claimed as charitable deductions and may be reduced by state-level credits.
  • Strict qualification rules mean only certain nonprofits will be eligible, especially in the early years of the program.
  • For most high-income dentists and practice owners, this credit is a supplemental tool, not a core tax strategy.

Starting in 2027, a new federal tax credit will enter the picture for individual taxpayers who support K–12 education through qualified scholarship organizations. Known as the Scholarship Granting Organization (SGO) tax credit, this provision was created under the One Big Beautiful Bill Act and added to the tax code as Section 25F.

At first glance, this credit looks like another charitable incentive. In reality, it operates very differently from traditional charitable deductions and has some important limitations that dentists and practice owners should understand before factoring it into their planning.

The big takeaway: this is a real credit, but it is narrow, conditional, and unlikely to be a game changer for most high-income earners.

How the SGO Tax Credit Works

Beginning January 1, 2027, individuals may claim a federal income tax credit of up to $1,700 per year for cash contributions made to qualified Scholarship Granting Organizations. The credit reduces federal tax liability dollar for dollar, but it is nonrefundable, meaning it cannot create a refund if no tax is owed. If the full credit cannot be used in a given year, unused amounts may be carried forward for up to five years.

For dentists and practice owners, federal tax liability is rarely the limiting factor. The more important questions are availability, coordination with other credits, and whether the credit adds value compared to existing strategies.

Why State Participation Matters More Than Income

One of the most misunderstood aspects of the SGO credit is that states must opt in before any taxpayer can claim it. No state is automatically included. States that choose to participate must formally elect to do so and submit a list of certified SGOs to the IRS. States can begin making these advance elections this year for 2027.

As of now, no states, including Texas, have opted in. If Texas does not participate, Texas-based dentists would only be able to claim the credit by donating to an SGO located in another participating state, assuming the organization accepts out-of-state donors and is properly certified. Whether that becomes practical will depend heavily on how states implement the program.

What Makes an Organization a “Qualified” SGO

Not every education-related nonprofit will qualify for this credit. To be eligible, an organization must meet strict criteria designed to ensure funds are used for broad-based scholarship support rather than individual benefit.

Among other requirements, a qualified SGO must:

  • Operate as a 501(c)(3) public charity
  • Use at least 90% of its income for scholarships
  • Serve K–12 students from families earning no more than 300% of area median income
  • Provide scholarships only for qualified education expenses
  • Maintain separate accounting for credit-eligible contributions
  • Avoid earmarking donations for specific students

These guardrails are important, but they also mean the pool of eligible organizations may be limited, particularly in the early years.

The Trade-Off Dentists Need to Consider

The SGO credit comes with a key restriction that matters for high-income taxpayers: no double dipping. If a taxpayer receives a state tax credit for the same contribution, the federal credit is reduced dollar for dollar. In addition, any contribution used to claim the SGO credit cannot also be deducted as a charitable contribution.

For dentists who already give charitably and rely on itemized deductions as part of their tax strategy, this trade-off may reduce the appeal. In many cases, the lost deduction could offset much of the credit’s benefit.

Who the Program Is Designed to Help

The scholarships funded through SGOs are intended for students from low- and middle-income families. Eligible students must meet income thresholds and may use scholarship funds only for qualified K–12 education expenses such as tuition, fees, tutoring, books, and special-needs services.

Beginning in 2027, scholarship amounts used for these qualified expenses are excluded from federal income for the recipient. From a policy standpoint, the goal is to expand access to education. From a tax planning standpoint, the benefit to donors is secondary and intentionally capped.

What This Means for High-Income Dental Professionals

Many dentists and practice owners will qualify for the SGO credit. The issue is not eligibility; it’s impact. At a maximum of $1,700 per year, the credit is helpful but modest. It may make sense for those who already support education-focused charities or who value the program’s mission, but it is unlikely to materially change overall tax strategy for most high-income earners. Think of this as a supplemental planning tool, not a cornerstone strategy.

Planning Ahead

As with many new tax provisions, the real planning opportunity lies in understanding the details before acting. For now, the most important things to watch are whether Texas, or your state, elects to participate, which organizations become certified, and how the credit interacts with existing charitable and state-level programs.

Used thoughtfully, the SGO credit may complement an existing plan. Used casually, it may add complexity without much benefit. If you’d like to talk through how this credit fits into your broader personal tax plan or charitable strategy as a dentist or practice owner, we’re happy to help you evaluate it in context rather than in isolation.

New Trump Accounts Are Now Available

A new federal savings tool known informally as Trump Accounts officially becomes available with the opening of tax season on January 26, 2026. While the name has attracted attention, the real opportunity lies in how these accounts can support families and potentially serve as a new employee benefit for dental practices.

Created under the One Big Beautiful Bill in 2025, Trump Accounts introduce a new way to help children build long-term savings starting at birth. For dentists and practice owners, the question isn’t just what these accounts are, but how they might fit into both personal planning and practice benefits strategies.

What Are Trump Accounts?

Trump Accounts are a new type of tax-advantaged savings and investment account established for U.S. children. While they share some features with custodial accounts, they are designed to transition into an IRA-like structure once the child reaches adulthood.

Key features include:

  • Federal seed contribution: Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens with Social Security numbers, are eligible for a one-time $1,000 federal contribution when an account is established.
  • Who can open and fund the account: Parents or guardians can establish a Trump Account when filing their tax return by completing IRS Form 4547 and submitting it with their return. Once open, parents, relatives, employers, and others can make contributions.
  • Annual contribution limits: Total contributions are generally capped at $5,000 per year per child, though certain public or charitable contributions may be treated differently.
  • Investment structure: Funds must be invested in eligible mutual funds or ETFs, typically those tracking broad U.S. equity indexes.
  • Access and use at age 18: When the beneficiary turns 18, the account converts into an IRA-like structure. From there, funds may be used for retirement, education, a first home purchase, or other qualified purposes, subject to applicable rules.

Why This Matters for Dental Families

Many dental professionals already use tools like 529 plans for education savings. Trump Accounts are different. They are not limited to education and are designed to support a broader range of long-term goals.

That flexibility can be appealing, particularly when combined with the early federal contribution and decades of potential investment growth. At the same time, these accounts introduce another layer of complexity into family financial planning.

For dental households, Trump Accounts should be evaluated alongside:

  • Existing education savings plans
  • Retirement strategies
  • Trust or estate planning structures
  • Cash flow demands tied to practice ownership

They are not an automatic replacement for other tools, but they may complement them when used thoughtfully.

A New Opportunity for Dental Practices as Employers

From a practice-owner perspective, Trump Accounts also introduce a new benefits consideration. Employers may contribute to these accounts for employees with eligible children, offering a family-focused benefit that supports long-term financial security without tying compensation solely to wages.

For dental practices competing for hygienists, assistants, and administrative staff in a tight labor market, this opens a new conversation about benefits that resonate with younger employees.

Potential advantages for practices include:

  • Offering a family-focused benefit that goes beyond traditional retirement plans
  • Differentiating the practice in recruiting, especially for early-career team members
  • Providing a benefit that supports long-term financial wellness without increasing immediate payroll costs in the same way wages do

Unlike health insurance or retirement plans, contributions to a child’s savings account can feel highly personal and values-driven, something many employees notice and remember.

That said, employer participation comes with administrative, tax, and compliance considerations that not every practice will want or need to offer. The key is understanding how it fits with your existing compensation and benefits philosophy.

Planning Questions for Dentists and Practice Owners

Whether you’re thinking about Trump Accounts for your own family, your employees, or both, these questions are worth exploring:

  • How does this account compare to a 529 plan or other long-term savings vehicles?
  • Would offering contributions as an employer create meaningful value for your team?
  • How would contributions be structured, tracked, and communicated?
  • How does this fit with practice cash flow, growth plans, and existing benefits?

Because contribution rules and tax treatment intersect with other planning areas, this is not a decision to make in isolation.

Bringing It All Together

Trump Accounts represent a meaningful shift in how long-term savings for children can be structured, and for dental practices, they introduce a potential new way to support employees at key life moments. Handled carefully, they can be a powerful planning tool. Handled casually, they can add unnecessary complexity.

If you’d like help evaluating how Trump Accounts fit into your personal financial plan or whether offering them as a benefit makes sense for your practice, we’re here to help. We specialize in working with dental professionals and dental practices and can help you assess both the opportunity and the implications before moving forward.

Podcast Recap: How Design Trends Are Changing Dental Practices and Patient Experiences

Key Takeaways

  • Dental practice design is increasingly focused on patient comfort, anxiety reduction, and overall experience, not just clinical efficiency.
  • Layout and square footage matter, but flexibility, flow, and shape of the space often matter more than size alone.
  • Lease terms and real estate decisions can significantly impact a practice’s financial health and long-term flexibility.
  • A practice’s physical space plays a meaningful role in resale value and buyer perception.
  • Thoughtful design and real estate planning support patient retention, staff experience, and future growth.

In this episode of Beyond Bitewings, Ash sits down with Mark Broson of Resource Commercial Advisors to explore how dental practice real estate and design trends have evolved, and what dentists should think about before signing a lease or building out a new space. While Mark shares insight from his work as a medically focused commercial real estate broker, the conversation centers on one core theme: today’s dental practices are being designed just as much for patient comfort and long-term value as they are for clinical efficiency.

One of the most noticeable shifts Mark highlights is the move away from sterile, medical-feeling offices toward environments that reduce anxiety and feel welcoming from the moment a patient walks in. Dentists are increasingly investing in soft lighting, natural materials, calming scents, and spa-like layouts that help patients feel at ease. These design choices aren’t just cosmetic; they shape the entire patient experience and can influence retention, referrals, and patients’ perception of the quality of care.

The discussion also dives into practical space planning considerations. While a large, concierge-style practice with multiple specialists under one roof may work for some, Mark explains that most dental offices today typically range from 2,000 to 3,500 square feet. A common planning guideline is approximately 400 square feet per operatory, but layout is just as important as size. Square-shaped spaces often offer more flexibility than long, narrow layouts, allowing room for consult areas, staff break rooms, and patient lounges without sacrificing efficiency.

Beyond design, Mark emphasizes the importance of thinking strategically about leasing versus owning. Leasing often makes more sense for practices focused on growth and flexibility, while ownership can work well for dentists planning long-term stability or family succession. Regardless of which path a dentist chooses, lease terms matter. Clauses such as rights of first refusal, tenant improvement allowances, and protections against forced relocation or demolition can have significant financial consequences if overlooked.

Another critical insight from the episode is how a practice’s physical space impacts its resale value. According to Mark, roughly one-third of a practice’s value is tied to aesthetics and real estate. Modern, well-maintained spaces are far more attractive to buyers than outdated offices, even when patient volume and clinical reputation are strong. In many cases, dentists nearing lease renewal can negotiate landlord-funded improvements that refresh their space without major out-of-pocket costs.

The episode closes with a clear message: dental real estate decisions are too important to navigate alone. From site selection and buildout to lease negotiations and long-term planning, having professionals who understand the dental industry can protect your investment and support your practice’s future. As Mark puts it, dentists deserve to be known for their work in the chair, not for avoidable real estate mistakes behind the scenes.

If you’re considering a new space, a renovation, or a lease renewal, this episode offers practical insight worth hearing, whether you’re early in your career or planning your next chapter.

Podcast Recap: Don’t Leave Money on the Table – How to Sell Smart to a DSO

Key Takeaways

  • DSOs value practices using EBITDA multiples, not collections.
  • A higher headline price often includes earn-outs and multi-year commitments.
  • Responding to unsolicited offers can significantly reduce leverage.
  • EBITDA calculations are frequently adjusted in ways that favor the buyer.
  • Exploring multiple offers creates optionality and protects long-term value.

Dental Service Organizations (DSOs) continue to expand rapidly, and many dental practice owners are receiving calls offering valuations far above what traditional peer-to-peer sales have historically delivered. While those offers can be tempting, a recent episode of Beyond Bitewings makes one thing clear: selling to a DSO is not a simple transaction, and without preparation, owners can leave substantial value on the table.

The episode features insights from Todd Wilson, formerly of Star Dental Partners, along with perspectives from Brannon Moncrief, of McLerran & Associates Practice Transitions, and Robert and Ash from the Edwards & Associates team. Rather than focusing on any one deal, the conversation centers on how DSOs think about value, risk, and control, and why that perspective differs so dramatically from how dentists often view their own practices.

Why DSOs Can Offer More And What That Really Means

Traditional dental practice sales are often based on a percentage of trailing collections. DSOs, however, value practices using a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). Depending on the practice, those multiples can range from three to well over ten.

That difference explains why DSO offers can appear dramatically higher than independent buyer offers. Private equity groups backing DSOs are targeting a predictable return, often around 12 to 13 percent, and they structure deals mathematically to achieve that outcome. The higher price isn’t generosity; it’s engineering.

EBITDA Is the Battleground

One of the most important takeaways from the discussion is that EBITDA is rarely a fixed number. DSOs frequently adjust EBITDA calculations by excluding add-backs, questioning discretionary expenses, or allocating costs in ways that reduce the final figure.

Even small adjustments can have outsized consequences. A $50,000 change in EBITDA, when multiplied by seven, can reduce a sale price by $350,000. Larger practices can see swings in the millions. This is why controlling the EBITDA narrative and understanding how it’s calculated is critical before accepting any offer.

What Happens After the Sale

Another major difference between selling to a DSO and selling to an independent buyer is the post-sale commitment. In a peer-to-peer transaction, sellers typically transition out within a few months. With DSOs, sellers are often required to stay on as associate doctors for three to five years.

In many cases, only a portion of the sale price is paid upfront, with the remainder tied to earn-outs over time. Leaving early can mean forfeiting a significant share of the promised value. While ongoing compensation continues, these structures fundamentally change the seller’s role, autonomy, and risk profile.

The Risk of Saying Yes Too Soon

A recurring theme throughout the episode is the danger of responding to unsolicited offers without representation. DSOs are designed to create proprietary deal flow, often engaging owners in “informal” conversations that quickly turn into binding negotiations.

Without exploring multiple buyers and deal structures, owners lose leverage. Creating optionality, by understanding motivations, comparing offers, and aligning the deal with personal and professional goals, can dramatically improve outcomes. The right deal isn’t just about price; it’s about structure, timing, and long-term fit.

A More Strategic Way Forward

DSOs are not going away. For some dental practices, they can be an excellent partner. But the episode underscores that preparation matters. Understanding valuation mechanics, earn-outs, lease considerations, and post-sale expectations gives owners control over decisions that can shape their financial future.

The bottom line: selling to a DSO should be a strategic choice, not a reactive one.

Why Dental Practices Need Better Financial Reporting, Not Just Tax Returns

Key Takeaways

  • Tax returns are compliance tools; financial reports are decision-making tools.
  • Many dental practices lack visibility into cash flow, margins, and performance drivers.
  • Better reporting supports smarter growth, staffing, and investment decisions.
  • Clean financial statements matter long before a practice is sold or financed.

Dental practice owners sometimes assume that once the tax return is filed, their financial picture is complete. In reality, a tax return answers only one question: what you owe after the year is already over. It does very little to help you understand how your practice is performing while decisions are still being made.

That gap becomes more obvious as practices grow. A tax return summarizes the past. Financial reporting, when done well, gives you visibility into the present and a clearer view of what’s coming next.

What Tax Returns Miss

Tax returns are built around IRS rules, not operational insight. They consolidate income and expenses in ways that make sense for compliance but often blur the details that matter most to owners. Monthly performance trends, cash flow timing, and margin pressure rarely stand out on a return finalized months after year-end.

This is why many dentists feel busy and profitable yet unsure whether growth is actually improving their financial position. The information they need simply isn’t surfaced in a tax document.

The Role of Ongoing Financial Reporting

Better financial reporting changes the conversation. Regularly reviewed profit-and-loss statements and balance sheets help owners understand how revenue is translating into profit, whether expenses are scaling appropriately, and how cash moves through the practice over time.

This visibility supports better decisions around hiring, equipment purchases, scheduling, and expansion. Instead of reacting to year-end results, owners can adjust course while there’s still time to do so.

Why Reporting Matters Beyond the Owner

Clean, consistent financial statements also matter to people outside the practice. Lenders, buyers, and potential partners rely on financial reports, not tax returns, to evaluate stability, risk, and value. When reporting is inconsistent or unclear, it raises questions and can complicate financing or slow down transactions.

Even if a sale isn’t on the horizon, strong reporting preserves optionality. It keeps doors open and reduces stress when opportunities or challenges arise.

From Compliance to Clarity

Tax returns will always be necessary. But they should be the result of good financial reporting, not the only window into your practice’s finances.

When reporting is accurate, timely, and reviewed consistently, it supports everything else: tax planning, cash management, growth decisions, and long-term strategy. At Edwards & Associates, we help dental practices move beyond compliance and toward clarity so owners can lead with confidence instead of guesswork. Reach out to us to talk about how we can support your practice finances so you can focus on your patients. 

Payroll Mistakes Dental Practices Make When They Start Growing

Key Takeaways

  • Payroll problems typically surface during growth, not at startup.
  • Owner compensation needs to be revisited as profits rise and consider the type of reporting entity for tax purposes. 
  • Hiring decisions should be tied to cash flow, not just production needs.
  • Payroll strategy must evolve alongside practice complexity.

Payroll is often the single largest expense in a dental practice, yet it’s rarely treated as a strategic area of focus. When practices are small, payroll often feels manageable and intuitive. As the team grows, those same habits can quietly create risk, inefficiency, and financial strain.

Most payroll issues don’t appear suddenly. They build gradually as headcount increases, roles evolve, and decisions are made faster than the financial infrastructure supporting them.

When Payroll Becomes More Than a Process

In the early stages, payroll is largely administrative: pay people accurately and on time. As a practice grows, payroll decisions begin to influence cash flow, tax exposure, retirement contributions, and compliance. At that point, payroll is no longer just a process; it’s a financial lever.

One of the earliest warning signs is when payroll timing starts to clash with quarterly tax payments or debt service. Another is when payroll grows consistently faster than collections. Practices often don’t notice this until margins feel tighter, even though production is up.

A useful rule of thumb is to review payroll as a percentage of collections at least quarterly. If that percentage is drifting upward without a clear reason, new providers ramping up, expanded hours, or increased production, it’s time to pause and reassess.

Owner Compensation Gets Harder to Ignore

The nature of owner compensation, either wages or owner distributions, depends on the type of entity the practice is for tax purposes. The IRS requires wages based on “reasonable compensation” for owners of S-corporations.

Owner compensation often stays unchanged longer than it should. A salary that felt reasonable when the practice was smaller may no longer align with IRS expectations or the economics of the practice as profits increase. 

Inconsistent pay schedules, artificially low salaries, or “we’ll true it up later” approaches create unnecessary exposure. As income rises, so does visibility. Owner compensation should be reviewed annually and adjusted intentionally, with documentation to support the rationale.

If your practice offers a 401(k) retirement plan with profit-sharing options, the optimum wage for owners to maximize their contributions should be updated annually. A good practice is to separate owner pay into predictable wages and planned distributions, rather than treating compensation as an afterthought at year-end.

Hiring Without a Cash-Flow Model

Hiring decisions are often driven by operational pressure: full schedules, long days, or staff burnout. While those signals matter, payroll expenses begin immediately, while revenue from new hires almost always lags.

Before adding staff, it’s helpful to model:

  • How long it will it take for the new role to generate revenue
  • Whether existing cash reserves can support payroll during the ramp-up period
  • How the hire affects benefits, overtime, and payroll taxes, not just base wages

If your practice can’t comfortably support the new payroll cost for several months without relying on future growth, the timing may be premature, or it may mean you have to take out a line of credit to cover these costs. Growth feels positive, but payroll is often where optimism turns into strain if the math isn’t tested first.

Classification and Benefits Complexity

As your practice expands, you may bring on consultants, part-time providers, or temporary staff. Worker classification mistakes are common during this phase and can be costly. Misclassifying employees as independent contractors often comes to light during audits, acquisitions, or state reviews.

At the same time, benefits and retirement plans add layers of complexity as headcount grows. Eligibility rules, employer contributions, and compliance requirements change once certain thresholds are reached.

What worked for a five-person team may not scale cleanly to a team of fifteen without adjustment.

Payroll as a Growth Tool

The most successful dental practices don’t avoid payroll complexity; they manage it intentionally. They review payroll metrics regularly, revisit compensation as profitability changes, and coordinate payroll decisions with tax and retirement planning.

When payroll is aligned with a growth strategy, it supports stability and flexibility. When it’s reactive, it becomes a source of stress and surprises.

At Edwards & Associates, we help dental practice owners treat payroll as part of the larger financial picture, so growth strengthens the practice instead of straining it.

Why Waiting Until the Tax Deadline Is Riskier Than It Used to Be for Dental Practices

Key Takeaways

  • Relying on last-minute mailing or filing is increasingly risky.
  • Delays, missing information, and timing issues can derail even simple filings.
  • Dental practices face higher stakes because of payroll, ownership, and equipment complexity.
  • Sharing information with your CPA early leads to better planning and fewer extensions.
  • Proactive preparation reduces stress, delays, and costly surprises.

For years, many taxpayers relied on a simple assumption: if you dropped something in the mail by the deadline, the postmark would protect you. That assumption no longer holds as reliably as it once did.

Changes in how mail is processed mean that the date something is postmarked may not match the date it was mailed. For time-sensitive documents, tax returns, extension forms, payments, or required signatures, that gap can matter. While many filings are now electronic, dental practices still rely on physical paperwork and mailed payments more often than most realize.

The lesson isn’t just to mail things earlier. It’s a reminder that waiting until the deadline leaves far less room for error than it used to.

The Postmark Issue Is a Symptom, Not the Core Problem

Mail delays simply highlight a broader reality: tax season has become increasingly unforgiving when everything is handled at the last minute.

When information comes together late, even small hiccups can create outsized problems. A missing payroll report, a question about owner compensation, an unclear equipment purchase date, or a delayed signature can quickly turn a straightforward filing into a scramble or an extension that no one wanted.

At that point, as your CPA, we aren’t planning; we are reacting.

Why Dental Practices Feel This More Than Most

Dental practices aren’t simple W-2 households. They involve payroll systems, benefits, retirement plans, equipment financing, production-based income, and often multiple owners or providers. Each of those elements depends on accurate, timely information.

When documents arrive late, planning options narrow. Retirement contributions may be constrained by timing. Depreciation decisions may be locked in without discussion. Estimated tax payments may be conservative rather than strategic. What could have been an informed choice becomes a rushed decision. This isn’t just about filing on time. It’s about losing control of the process.

Extensions Can Be Useful, but Are Not Always Neutral

Extensions are common and sometimes necessary, but they’re often misunderstood. An extension gives you more time to file, not more time to pay. And it doesn’t preserve every opportunity for tax planning.

For dental practices, filing late could delay financing conversations, complicate personal planning for owners, and push important decisions into the next tax year. In some cases, extensions aren’t strategic; they’re simply the result of information arriving too late to do anything else.

What Being Proactive Actually Means

Being proactive doesn’t mean finishing your tax return in January. It means getting organized early enough that decisions aren’t rushed.

That starts with closing out bookkeeping promptly after year-end and gathering payroll, benefits, and retirement information early. It also means flagging major changes, such as new providers, equipment purchases, and ownership shifts, when they happen, not months later.

For dental practice managers, this often means acting as the connector, ensuring information flows smoothly between the practice and its advisors so nothing stalls at the finish line.

The Real Payoff of Starting Earlier

When your CPA has complete, timely information, the entire process changes. Filing becomes smoother. Extensions become optional rather than inevitable. Planning decisions are thoughtful instead of reactive. And stress drops for everyone involved.

The postmark issue is a reminder that deadlines are less forgiving than they once were. The solution isn’t anxiety; it’s preparation.

A Smarter Way to Approach Tax Season

Tax deadlines aren’t changing, but the environment around them is. For dental practices, the safest approach is to treat tax preparation as an ongoing process, not a last-minute event.

Gathering information early, sharing it consistently, and staying engaged throughout the year leads to fewer surprises and better outcomes. At Edwards & Associates, we help dental practices plan ahead so filing is the final step, not the fire drill. 

R&D Tax Credits for Dentists: Beware Dangerous “Free Money” Offers

Key Takeaways

  1. Most routine dental activities do not qualify for R&D tax credits under IRS rules.
  2. The IRS has repeatedly warned taxpayers about “R&D credit mills” promoting invalid claims.
  3. Dentists risk audits, repayment, penalties, and interest if they file improper R&D claims.
  4. Only true scientific or technological experimentation, not adopting new equipment, not CAD/CAM workflows, meets the legal standard.
  5. Before claiming R&D credits, dentists should consult a qualified CPA to avoid becoming a target for IRS enforcement.

If you’re a dentist or dental practice manager, you may have recently seen messages with subject lines like:

  • I just got a massive refund using this R&D credit service. You should try it too!
  • We helped dozens of practices secure 5- and 6-figure refunds. Want yours?
  • This is FREE MONEY for dentists. No risk! We only get paid if you get a refund.
  • Why haven’t you filed your R&D claim yet? Practices like yours are cashing in.

This is happening nationwide. After the boom (and crackdown) surrounding Employee Retention Credit (ERC) mills, many of those same promoters have shifted to the federal Research & Development (R&D) credit, reviving an aggressive sales push last seen during the COVID-19 pandemic.

The pitch goes something like this: “You’re already doing research and development; you just don’t realize it!” The problem? It is rare for dental practices to qualify for R&D tax credits, and the IRS guidance makes it clear that routine clinical work does not meet the definition of qualified research. 

What the IRS Actually Requires: The Four-Part R&D Test

Under Internal Revenue Code §41 and related IRS regulations, an activity must satisfy all four parts of the statutory test to qualify:

  1. The activity must be intended to develop or improve a business component (Permitted Purpose). The research must aim to create a new or improved product, process, technique, formula, invention, or software that enhances function, performance, reliability, or quality.
  2. The activity must be undertaken to eliminate technical uncertainty. At the outset, there must be uncertainty about capability, method, or appropriate design, meaning you do not know whether or how you can achieve the intended result.
  3. The activity must rely on principles of the hard sciences (Qualified Research). The research must be based on a field of physical or biological science, engineering, or computer science.
  4. The activity must involve a process of experimentation. There must be a systematic process of evaluating one or more alternatives through modeling, simulation, trial and error, or other scientific methods to resolve the technical uncertainty.

Routine clinical dentistry does not meet these requirements. Under IRS guidance, placing implants, customizing orthodontic appliances, using CAD/CAM technology, refining workflows, and adopting new equipment are considered standard practice, not R&D.

Why Dentists Are Being Targeted

The IRS has warned taxpayers about aggressive promoters pushing improper R&D credit claims. Commonly used tactics include:

  • Exaggerating what qualifies
  • Charging large contingency fees
  • Providing boilerplate reports not tailored to your practice
  • Promising credits without understanding dental operations
  • Relying on the IRS being backlogged

These firms are not taking the long-term risk; you are. And the IRS has already begun audits targeting small businesses that claimed credits without legitimate experimental activity. 

The Risks of Filing an Invalid R&D Claim

If you claim an R&D credit you’re not entitled to, the IRS may require you to:

  • Repay the credit
  • Pay penalties
  • Pay interest
  • Defend the claim in an examination or court

In many cases, taxpayers also bear the burden of providing contemporaneous documentation, something promoters often fail to advise clients about. These same firms rarely stand behind their work when the IRS challenges the claim. As a result, the financial risk sits squarely with you, not the credit mill.

How Dentists Can Protect Themselves

  • Be skeptical of unsolicited messages or “free money” promises. If it sounds too good to be true, it usually is.
  • Do not sign anything based on a promoter’s interpretation alone.
  • Talk to your CPA before responding to any R&D credit offer.
  • Only consider the credit if you genuinely performed scientific research.
  • Ensure documentation exists before filing, not after.

When You Should Contact Us

If your practice is truly developing something new, not simply using or expanding upon existing technology, we are happy to evaluate whether it may qualify under the IRS four-part test.

But if a promoter tells you that:

  • Routine dental work counts as R&D.
  • Every CAD/CAM case is “experimental.”
  • Every orthodontic appliance is a “new development.”

…that is a red flag. Our role is to keep your practice compliant and protected, not exposed.

Need Help or Have Questions About an R&D Offer?

Before you jump into any R&D tax credit program, contact us first. We will help you determine whether your activity qualifies and protect you from the growing number of credit mills targeting dentists in 2025. At Edwards & Associates, we specialize in tax and financial guidance for dental practices. We’re here to help you make smart, compliant decisions that protect your practice long-term.

Year-End Questions Every Dental Practice Owner Should Ask Their CPA

Key Takeaways

  • Are you taking full advantage of new 2025 tax law changes under OBBBA?
  • Have you reviewed your equipment, technology, or practice upgrades to see if they qualify for immediate expensing or bonus depreciation?
  • Is your business entity structure (S-Corp, LLC, etc.) still the most tax-efficient, or should it be revisited in light of new rules?
  • Are you maximizing retirement plan or retirement-savings contributions for yourself and your staff?
  • Have you updated your projected tax liability to reflect 2025 income and deductions and planned accordingly (deferring income, accelerating expenses, etc.)?

As a dental practice owner or manager, you’ve likely got a lot on your plate. But with the end of the year approaching, and with major tax law changes in 2025, now is a critical time to pause and evaluate your tax and financial strategy. Here are important questions to guide that review.

1. Has your tax situation changed under the One Big Beautiful Bill Act?

  • The OBBBA, signed into law July 4, 2025, reinstates 100% bonus depreciation for qualified assets placed in service after January 19, 2025.  
  • It also raises the maximum immediate write-off under Section 179 expensing to $2.5 million (with a phase-out threshold near $4 million).  
  • To qualify for bonus depreciation or Section 179 expensing in 2025, equipment and other assets must be placed in service, not just purchased, before year-end. Now is the time to confirm installation, delivery, or setup timelines.

Ask yourself: What assets did my practice acquire or place into service in 2025? Could those qualify for bonus depreciation or Section 179 expensing before year-end? 

2. Is now a good time to accelerate expenses (or defer income)?

  • Consider accelerating deductible expenses or postponing income when appropriate, which is a proven year-end strategy that is especially valuable during years with tax law changes.
  • For dental practices, that might include delaying invoicing or postponing elective procedures until the following year, or conversely, pre-paying next year’s office supplies, software subscriptions, or other recurring costs.

Ask yourself: Are there expenses you can bring forward, or revenues you might delay, to optimize your 2025 taxable income?

3. Is your retirement and benefits strategy up to date for you and your team?

  • Offering or contributing to retirement plans (like SEP IRAs, SIMPLE IRAs, 401(k)s, etc.) remains one of the most effective ways to reduce taxable income while building long-term wealth.  
  • For small businesses and practice owners, these can be particularly valuable, and may also help attract or retain skilled staff (especially relevant given the labor challenges many dental practices face).

Ask yourself: Have I (and does my practice) maximized contributions to retirement plans for 2025?

4. Is your business structure still optimized for tax efficiency?

  • The OBBBA reaffirmed favorable rules for pass-through entities, including permanent extension of the 20% Qualified Business Income (QBI) deduction for many small business owners.  
  • But changes to deductions, depreciation, and overall tax law may shift what entity type (S-Corp, LLC, etc.) makes the most sense.

Ask yourself: Given 2025 law changes and my 2025 income forecast, is my current entity structure still the most tax-efficient? If you’re not sure, or haven’t revisited this recently, this can be a high-impact check.

5. Do you have a clear 2025/2026 tax baseline and projection?

  • Some experts recommend preparing a pro forma tax return (or rough forecast) before year-end to understand where you stand.  
  • This helps you estimate your 2025 tax liability, consider estimated tax payments, and plan for choices like asset purchases, retirement contributions, and deductions.

Ask yourself: Have I run a full 2025 tax projection and used that to plan whether to accelerate deductions or defer income?

Why This Matters for Dental Practices

Dental practices operate in a unique business space: you face high overhead (equipment, office, supplies), regulatory and compliance demands, and sometimes variable revenue (e.g., patient volume, elective procedures). That makes year-end tax and financial planning not just interesting, but important to your financial stability.

Taking advantage of 2025’s favorable tax law changes, acting before December 31, and aligning your business structure and retirement/benefit planning properly can produce real savings. And those savings can directly improve your bottom line or fund future investment, such as upgraded equipment, expanded staffing, or enhanced patient care.

What You Should Do Now

  • Review any large purchases or equipment placed in service in 2025, and consider whether they qualify for bonus depreciation or Section 179 expensing.
  • Reach out to us about building a 2025 tax projection and scenario plan (accelerate expenses, defer income, maximize deductions).
  • Review retirement and benefit plan contributions (for you and your staff) to reduce taxable income and build long-term wealth.
  • Reassess your business entity structure (LLC, S-Corp, etc.) under the new tax rules.
  • Let us help you plan, because tax strategy isn’t only about saving money, it’s about building a stronger, more resilient practice.

Need Help? We’re Here for You.

If you run a dental practice and want to make sure you’re maximizing 2025 tax savings, leveraging new law changes, or simply getting your financial house in order, give us a call. At Edwards & Associates, we specialize in helping dental practices like yours with tax, accounting, and financial planning that fit the demands of your business. Let’s make 2026 your most financially sound and growth-ready year yet.

Why Dental Practices Should Gather W-9s Now

Key Takeaways

  • Collecting W-9s early prevents January delays and ensures your practice can meet the IRS’s January 31 1099 filing deadline.
  • A missing W-9 can block 1099 preparation and jeopardize your ability to deduct contractor expenses if audited.
  • Best practice is to request a W-9 before issuing any payment, and making it part of your vendor onboarding process eliminates year-end stress.
  • Dental practices work with many contractors who require 1099s, including IT providers, repair technicians, marketing consultants, and independent hygienists.
  • A proactive W-9 and 1099 workflow saves time, reduces compliance risk, and protects your practice from IRS penalties.

For dental practice owners and managers, January is one of the busiest times of the year. You’re closing out financials, preparing tax documents, and reviewing year-end reports. And add to that, 1099 filings are due January 31.

The most common bottleneck? Not having W-9s for every contractor and vendor who must receive a 1099.

As your accounting team, we can prepare and file your 1099s, but only if you’ve collected complete and accurate W-9 forms. Gathering these documents early, preferably at the start of every vendor relationship, protects your practice from penalties, delays, and last-minute stress.

Below is why this matters, who needs a 1099, and what steps you should take now to ensure a smooth January.

Why W-9s Matter for Dental Practices

The IRS requires you to issue a 1099-NEC to any contractor you paid $600 or more during the year for services. This applies to many people dental practices commonly work with, such as:

  • IT professionals
  • Marketing consultants
  • Independent hygienists or assistants
  • Repair technicians
  • Bookkeepers
  • Freelance designers
  • Contract labor of any kind

The W-9 provides the legal information needed to generate the 1099, including:

  • Legal business name
  • Tax classification
  • Taxpayer Identification Number (TIN or SSN)
  • Address

Without this completed form, we cannot file your 1099s, and you cannot deduct these expenses from your taxes.

The Danger of Waiting Until January

Many dental practices try to collect W-9s during the 1099 preparation season, and that’s where problems start.

  • Vendors ignore January requests because they’re overwhelmed.
  • Old email addresses bounce.
  • Contractors who have left the industry are hard to reach.
  • Practices spend hours chasing missing forms.
  • 1099 filings get delayed or become inaccurate.

Meanwhile, the IRS deadline does not move, and missing it risks late-filing penalties that can add up quickly. 

To avoid this, we recommend you add collecting a W-9 to your onboarding process for every new vendor.

Who Should Give You a W-9?

You should request a W-9 from:

  • Anyone you pay for services who is not an employee
  • Contractors paid via check, ACH, Venmo, Zelle, etc.
  • Attorneys (always required, even if paid less than $600)
  • Landlords (if applicable)
  • Single-member LLCs, partnerships, and most corporations
    • Exception: Most C- and S-corporations don’t need a 1099, but you won’t know unless you have their W-9 on file

Even if a vendor may not require a 1099, getting a W-9 ensures you have accurate records and protects you in case IRS rules or vendor classifications change.

What You Should Do Right Now

  1. Review your 2025 vendor list: Identify all individuals and companies paid for services this year.
  2. Gather W-9s for any missing vendors: If you don’t have one, request it immediately.
  3. Update your process for 2026 to include the following workflow:
    • Add W-9 requests to your vendor onboarding checklist
    • Store forms securely in one place
    • Notify your accountant when new vendors are added
  4. Send everything to your accounting team early: The sooner they have your vendor list and W-9s, the faster they can prepare accurate 1099s.

Let Us Handle Your 1099s

Our team prepares 1099s for dental practices every year, and we can make the process smooth and stress-free for you once you have gathered all your completed W-9s. If you’d like help reviewing your vendor list or putting a better W-9 process in place, we’re here to support you.

Contact us now to prepare for a smooth January 31 deadline and eliminate the scramble before it starts.