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.

Student Loan Forgiveness Tax Break Set to Expire: What Dental Practice Owners Need to Know

Key Takeaways

  • A federal tax break that makes student loan forgiveness tax-free expires on December 31, 2025, unless extended by Congress.
  • Starting in 2026, forgiven IDR loan balances may once again be treated as taxable income, resulting in significant federal tax bills.
  • Dental professionals, who often carry some of the nation’s highest student loan balances, face outsized financial risk if the tax exclusion ends.
  • Borrowers could be pushed into higher tax brackets and lose eligibility for certain credits, increasing their overall tax liability.
  • Dental practice owners should model the impact now, adjust tax strategies, and prepare team members who may be affected beginning in 2026.

If you or a member of your dental team is on an Income-Driven Repayment (IDR) plan for student loans, an important tax rule is scheduled to change, and the impact could be significant.

Under the American Rescue Plan Act of 2021, any federal student loan forgiveness issued between January 1, 2021, and December 31, 2025, is not considered taxable income at the federal level. That means borrowers who earned forgiveness under IDR after 20 or 25 years of payments have, for now, avoided the large “tax bomb” that previously accompanied cancellation.

But unless Congress extends the provision, this tax-free treatment ends on December 31, 2025.

Beginning in tax year 2026, borrowers who qualify for long-term IDR loan forgiveness may once again face hefty federal tax bills, potentially $8,000 to $10,000 or more, according to analyses from Protect Borrowers and reported by Accounting Today.

And because many dentists graduate with $300,000–$600,000 in student loan debt and may later enroll in IDR during career transitions or ownership changes, this issue hits the dental industry especially hard.

Why This Matters for Dentists and Dental Practices

Dental professionals carry some of the highest student loan balances in the country. Even practice owners who have been repaying for decades can still be on an IDR plan, especially if they refinanced privately, paused payments during practice startup years, or switched repayment plans during the pandemic.

When the tax exclusion expires:

  • Any forgiven amount becomes taxable as ordinary income
  • The forgiven amount could push a borrower into a higher federal tax bracket
  • Borrowers could lose eligibility for refundable credits, increasing their net tax liability
  • Those earning $40,000–$60,000 (including some associates or team members) may see the largest proportional tax impact

Sample Scenarios

Example 1: A dental hygienist has been repaying loans under an IDR plan for 22 years. She earns $58,000 a year, supports two children, and still owes $18,000 that would be forgiven in 2026. Once the exclusion expires, that $18,000 would be treated as taxable income. The result? An additional $3,000–$4,000 in federal taxes, due immediately.

Example 2: A dentist-turned-practice-owner who has intentionally kept payments low during the practice’s early years expects $120,000 of remaining IDR debt to be forgiven in 2026. If taxable, the federal tax bill on the forgiven amount could exceed $25,000, due in a single year. For many families, especially those with practice debt, child-care expenses, or unpredictable income, these extra tax burdens could be financially destabilizing.

What Should Dental Practice Owners Do Now?

Even though Congress may act, there is no guarantee. The Treasury Department and IRS have been urged to use administrative authority to extend tax relief, but no action has yet been taken.

That means now is the time to plan.

  1. Model the Potential Tax Impact: Estimate how much forgiveness you or a team member may receive beginning in 2026, and calculate the additional tax owed if the exclusion expires.
  2.  Build the Cost Into Your Tax Strategy: If you expect forgiveness in or after 2026, your tax plan should include:
    • Adjusted quarterly estimated payments
    • Strategic retirement contributions
    • Entity restructuring, if appropriate
    • Possible timing shifts for major purchases or deductions
  3. Prepare for Team Member Questions: Many associates, hygienists, and administrative staff use IDR. This topic will affect your team and your retention strategy.
  4. Avoid Last-Minute Surprises: Without planning, borrowers could owe several thousand dollars unexpectedly, a stressor that often hits during already tight financial years.

Let Us Help You Prepare for What Comes Next

If Congress or the IRS doesn’t extend the tax break beyond December 31, 2025, many dental professionals will face a steep and unexpected tax bill the following year.

We can help you:

  • Forecast your potential tax liability
  • Build proactive tax strategies around IDR forgiveness
  • Integrate planning into your broader financial and practice goals
  • Avoid surprises and stay in the strongest possible financial position

Contact our team today to prepare a tax plan that protects you, no matter what happens in Washington.

Podcast Recap: Reducing Dentist Burnout Through Insurance

Key Takeaways

  • Disability insurance and proper coverage reviews can protect dentists from income loss if an injury or illness prevents them from practicing.
  • Offering employee benefits such as group health, disability, and liability coverage strengthens retention and helps combat staffing challenges.
  • Thoughtful insurance planning reduces stress for owners and teams, lowering operational risk and supporting long-term practice stability.
  • The right insurance partner does more than issue policies; they help dentists identify risks, prevent costly oversights, and stay focused on patient care.

Running a dental practice comes with an extraordinary amount of pressure, from patient care and production goals to staffing challenges and the constant demands of ownership. In a recent Beyond Bitewings episode, host Ash sat down with Nick Henshaw of WinStar Insurance Group to discuss how strategic insurance planning can help dentists reduce stress, protect their livelihoods, and strengthen their practices.

Nick specializes in insurance for dental practices and has seen firsthand how gaps in coverage or outdated policies can leave dentists vulnerable. One of the most common issues he encounters is disability insurance that hasn’t been reviewed since a dentist’s early career. Many dentists purchase basic coverage right out of school and never revisit it, even as their income, financial responsibilities, and lifestyle change. Nick emphasized that disability insurance is not limited to work-related injuries; any illness or accident that prevents a dentist from practicing can trigger a claim. Without proper coverage, the financial strain of losing the ability to produce can compound an already stressful situation.

The conversation also explored how practice owners can use group insurance benefits to strengthen retention and build a healthier workplace culture. Benefits such as health, vision, dental, disability, and group liability insurance are powerful tools for attracting and keeping talented team members, especially in competitive markets. Nick noted that younger workers increasingly prioritize culture and support over compensation alone. Offering meaningful benefits signals that a practice truly values its people, going beyond surface-level gestures like office perks or occasional recognition.

Another overlooked area is protecting hygienists and associates with appropriate disability coverage. Since practices rely heavily on the clinical output of their teams, the loss of a hygienist can create operational and financial strain. Ensuring these team members have access to protection is both a risk-management strategy and a meaningful demonstration of care.

Nick also warned practice owners about “force-placed insurance,” a costly and often inferior insurance automatically added by lenders when proof of coverage isn’t provided. This can quietly inflate loan payments and still leave practice property underinsured. Having an attentive insurance partner who manages these details can prevent delays in practice transitions, equipment acquisitions, or financing approvals.

Ultimately, Nick’s message centered on one idea: where pressure rises, risk rises. Dentists face enough stress clinically and operationally without worrying about inadequate coverage or overlooked liabilities. By reviewing policies regularly, offering strong benefits, and partnering with advisors who proactively help manage risk, practice owners can regain valuable peace of mind.

What Lower Interest Rates Mean for Your Dental Practice

Key Takeaways

  • The Fed’s recent rate cut makes borrowing more affordable, but smart planning is essential before taking on new debt.
  • Refinancing older loans can lower costs, and the savings should first go toward strengthening your financial reserves.
  • Maintain a cash buffer of at least two to three months of expenses to protect against reimbursement delays or rising costs.
  • Don’t assume low rates will last; use this window to improve stability and flexibility, not to overextend.
  • Strategic, disciplined decisions today can help your dental practice thrive through economic uncertainty.

The Federal Reserve’s latest rate cut is making headlines, but what does it actually mean for dental practices? In short, borrowing is about to get cheaper, but that doesn’t mean you should jump at every opportunity. For practice owners already managing loans, staffing, and rising costs, now is the time to think strategically, not react impulsively.

Where to Be Opportunistic

After several years of rising rates, the Fed’s recent decision to lower its benchmark rate, now hovering around 3.75% to 4%, could bring some much-needed financial breathing room. If your practice is considering investing in new technology, expanding operatories, or purchasing updated imaging equipment, financing those upgrades may soon come with a lower price tag.

The same goes for refinancing. Practices carrying older loans or equipment leases that were locked in during the higher-rate environment of 2023-2024 may have an opportunity to renegotiate better terms. Even a modest rate reduction can translate into meaningful monthly savings, funds that are best used to strengthen your financial reserves. Reinvesting those savings helps ensure long-term stability, especially if reimbursement cycles slow or costs rise unexpectedly. Once your safety net is solid, you can confidently put remaining funds toward team bonuses, technology upgrades, or marketing.

Where to Be Careful

It’s easy to see lower rates as a green light for growth, but proceed with a plan. Dental practices often operate on tight cash flow cycles, with insurance reimbursements and patient payments creating natural delays in revenue. Taking on too much new debt, even at attractive rates, could leave your practice exposed if collections slow or expenses rise unexpectedly.

It’s also worth remembering that the Fed’s decision doesn’t guarantee a long-term trend. Inflation remains a concern, and if economic conditions shift, rates could climb again. The smartest approach is to use this window to strengthen your financial position, not stretch it.

What to Do Right Now

Start by reviewing your current debt and cash flow picture. Look at every existing loan, from your practice mortgage to equipment leases, and identify which ones could be refinanced without penalty. Then, work with us to model how a lower interest rate could impact your monthly obligations and tax position.

If you’ve been considering a major investment, such as expanding your space or adding new operatories. In that case, it may make sense to move forward, but only after confirming that your reserves and revenue forecasts can handle the additional load. For most practices, maintaining a cash buffer of at least two to three months of expenses remains essential, especially while the economy is in flux.

Finally, keep your focus on long-term stability. Lower interest rates can create opportunities, but they can also tempt businesses into overextending. The businesses that thrive in uncertain times are the ones that balance optimism with discipline, using favorable conditions to reduce costs, build savings, and prepare for whatever comes next.

Thoughtful Growth Wins Every Time

Lower rates may make financing more accessible, but financial health still depends on sound planning. Before you refinance, expand, or upgrade, make sure those moves align with your larger goals, not just with the news cycle.

If you’d like help evaluating your options, from loan restructuring to cash-flow forecasting, our team can help you chart a course that supports your practice’s growth while keeping risk under control. Reach out to us today to schedule an appointment. 

Preparing Your Dental Practice for the Ongoing Government Shutdown

Key Takeaways

  • Stay current on taxes: IRS operations may be slowed, but filing and payment deadlines remain in effect. Avoid penalties by filing electronically and keeping your records organized.
  • Plan for premium hikes: Health and benefit plan costs are likely to rise as federal oversight remains uncertain. Review renewal terms and adjust your budget early.
  • Expect financing delays: SBA-backed loans and other federal funding channels are on hold, which could affect equipment purchases or expansion plans.
  • Protect your cash flow: Build a short-term reserve and monitor receivables closely, especially if your patients or vendors are tied to government contracts.
  • Lean on your advisors: Your accounting and financial partners can help model cash-flow scenarios, evaluate timing for investments, and prepare your practice for prolonged disruption.

The federal government shutdown is already impacting agencies and operations and showing no signs of ending any time soon. For dental practice owners, this means potential delays and disruptions, not just in Washington, D.C., but in your everyday finances, tax compliance, insurance costs, loan financing, and cash-flow stability.

Tax & IRS Realities for Dental Practices

Even though the shutdown has caused many parts of the federal government to scale back, the tax code hasn’t taken a pause. Your practice still must file returns, make estimated or quarterly tax payments (including payroll deposits), and comply with deadlines. Meanwhile, the IRS is operating with reduced staffing, meaning refunds, credits, and correspondence may take significantly longer to arrive.

If your practice anticipated a refund or tax-credit cash inflow to fund equipment purchases or operational expenses, plan now for extended wait times. At the same time, interest and penalties for late payments continue to accumulate, so it’s essential not to delay regular compliance. Keep payment schedules on track, file electronically when possible, and maintain documentation in case you receive IRS notices during the shutdown.

Insurance Premiums & Benefit Plan Impacts

As a dental practice owner, you’re also exposed to shifts in insurance markets and benefit-plan costs when federal funding is uncertain. Insurers and benefit administrators are already forecasting large premium increases next year, driven in part by uncertainty around subsidies and federal oversight. For example, federal employee health-plan premiums alone are expected to rise by more than 12% in 2026.  

For your practice and staff-benefit programs, that means two things: you may face higher benefit premiums, and you may need to update your budget assumptions accordingly. If you sponsor an employee-health plan, consider adjusting contribution models or benefit designs now, so you’re not caught off guard by rate shocks later. Communicate proactively with your benefit carrier and review renewal terms with your accounting team.

Business Loans, Equipment Financing & Cash-Flow Considerations

Another key risk for dental practices during a prolonged shutdown is financing and loan access. The U.S. Small Business Administration (SBA) reports that each business day during the shutdown, roughly $170 million in federally-guaranteed loans have been blocked, affecting hundreds of small and mid-sized businesses.  

For a dental practice planning to purchase new equipment, open a second location, refinance, or undertake a practice acquisition, this means possible delays or increased cost of capital. If you were relying on loan disbursement, tax refunds, or growth funding that’s now delayed, you’ll want to stress-test your cash-flow assumption for slower inflows and higher borrowing costs. We are happy to help you model scenarios that include 30-60-day delays in reimbursement or loan proceeds and help identify contingency plans.

What You Can Do Right Now

  • File and pay taxes electronically to reduce processing risk during delays.
  • Build a cash buffer equal to at least 2-3 months of operating costs based on worst-case assumptions.
  • Review your upcoming equipment purchases, lease obligations, and expansion plans with an eye toward delay risk.
  • Talk to your benefits broker now about the upcoming premium renewal, and ask about rate-shock mitigation strategies.
  • Monitor receivables carefully, especially if you serve a lot of patients or groups tied to federal employment or contractors.
  • Communicate with us as well as your internal accounting, financing, and advisory teams early, so we can prepare for all scenarios accordingly.

We Are in this Together

A government shutdown doesn’t mean your dental practice can pause its responsibilities, but it does raise the odds of financial disruption. By being proactive about tax timing, insurance costs, loan access, and cash flow, you put your practice in a better position to navigate the uncertainty. If you’d like help reviewing your cash-flow model, reviewing purchase or expansion plans, or evaluating your tax timeline in light of the shutdown, our team is ready to work with you so your practice can stay focused on serving patients.