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.

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.

2026 Tax Changes Every Dental Practice Owner Should Know

Key Takeaways

  • Estate tax thresholds are increasing, creating new opportunities for wealth transfer and succession planning.
  • Standard deductions and tax brackets are increasing for 2026, which could impact how much you owe or how much you save.
  • Credits and exclusions, including the adoption credit and earned income tax credit, are getting inflation adjustments that could benefit your household.
  • Business-related benefits, like the childcare tax credit and flexible spending limits, are rising, offering more ways to manage expenses.

The IRS has announced its annual inflation adjustments for 2026, and they can add up to big differences for dental practice owners and their families. These changes will apply to tax returns filed in 2027, but now is the time to start planning so you’re not caught off guard.

Bigger Standard Deductions for Most Filers

One of the most notable updates is the higher standard deduction, which reduces the amount of income subject to tax. For 2026, the new amounts are:

  • $32,200 – Married couples filing jointly
  • $16,100 – Single filers or married filing separately
  • $24,150 – Heads of household

This means you’ll keep more of your income tax-free, which can be especially valuable if you’re reinvesting profits into your practice or saving for retirement.

Updated Tax Brackets: Where Your Income Falls Matters

While the top marginal tax rate remains 37%, income thresholds are shifting upward. Here’s how the 2026 brackets break down for single filers (married filing jointly thresholds in parentheses):

  • 35% for income over $256,225 ($512,450)
  • 32% for income over $201,775 ($403,550)
  • 24% for income over $105,700 ($211,400)
  • 22% for income over $50,400 ($100,800)
  • 12% for income over $12,400 ($24,800)
  • 10% for income below $12,400 ($24,800)

For practice owners, these bracket shifts could affect how you time income, bonuses, or equipment purchases. Strategic planning now can help reduce your overall tax liability.

Planning for the Future: Estate and Gift Tax Updates

Succession planning is essential for any dental practice, and new thresholds may open the door for more tax-efficient transfers:

  • Estate Tax Exemption: Rises to $15 million, up from $13.99 million.
  • Annual Gift Exclusion: Remains at $19,000, while gifts to a non-U.S. citizen spouse increase to $194,000.

If you’re thinking about transitioning your practice or passing wealth to the next generation, these changes could significantly reduce your tax burden.

Business and Employee Benefits: Expanded Opportunities

Running a practice isn’t just about patient care; it’s also about smart business decisions. Several inflation adjustments for 2026 could impact how you compensate and support your team:

  • Child Care Tax Credit: Increases from $150,000 to $500,000 for employer-provided care (up to $600,000 for eligible small businesses).
  • Flexible Spending Accounts (FSA): The annual salary reduction limit increases to $3,400, with a $680 carryover option.
  • Qualified Transportation Benefits: Monthly limits increase to $340.

These higher limits provide more ways to offer competitive benefits, which can support retention and reduce turnover in a tight labor market.

Key Personal and Family Tax Benefits

In addition to practice-level planning, individual taxpayers will see changes that can impact household finances:

  • Adoption Credit: Up to $17,670, with $5,120 refundable.
  • Earned Income Tax Credit (EITC): The maximum credit for families with three or more children increases to $8,231.
  • Foreign Earned Income Exclusion: Rises to $132,900.

These adjustments offer new planning opportunities, particularly for dental professionals with growing families or global income considerations.

Why Early Planning Matters for Dental Practices

These changes don’t just affect your next return; they can shape your entire tax strategy. Whether it’s timing revenue and expenses, updating your compensation structure, or planning for succession, proactive tax planning is key to minimizing what you owe and maximizing what you keep.

At Edwards & Associates, we work exclusively with dental professionals to translate IRS changes into actionable strategies for your practice and personal wealth. The earlier we start planning, the more opportunities we have to protect your income and grow your financial future.

The 2026 tax landscape is shifting in ways that could directly affect your practice, your team, and your personal finances. Don’t wait until tax season to react; plan ahead for the most flexibility.

What the Government Shutdown and IRS Furlough Mean for You

Key Takeaways

  • The IRS is operating at half capacity as roughly 34,000 employees have been furloughed during the government shutdown that began on October 1, 2025.
  • Electronic filing and payments continue as normal, but audits, taxpayer phone support, and correspondence are on hold until the government reopens.
  • Taxpayers who filed extensions until October 15 should still file and pay on time. The IRS continues to process returns, but delays in confirmations or refunds are likely.
  • Dental practice owners can expect slower IRS communication and potential backlogs, but filings submitted electronically remain secure.
  • For current Edwards & Associates clients, no action is required. Our team continues managing all submissions and monitoring IRS updates on your behalf.
  • If you aren’t yet a client, reach out to us to talk about working with a firm experienced in managing filings during government shutdowns and IRS delays.

The federal government shutdown, which began on October 1, 2025, is not significantly impacting the IRS.

On October 8, the agency furloughed nearly half of its 74,000 employees after using leftover Inflation Reduction Act funds to stay open for the first few days of the shutdown. What does that mean for taxpayers, especially dental practice owners who filed extensions and are approaching the October 15 deadline? In short, the IRS is still accepting returns and payments, but response times and certain processes are already slowing down. Here’s what we know and what we don’t.

What’s Still Running

While roughly 34,000 employees are furloughed, the IRS is keeping some “excepted” operations active, including:

  • Electronic filing and payment processing, which continue automatically
  • Limited computer systems maintenance to prevent data loss or system failure
  • Criminal investigations and disaster relief processing which fall under essential services.

Everything else, from taxpayer assistance lines to audit reviews and correspondence, is on hold. That means if your return needs manual review, or if you’re waiting on a reply or refund check, you can expect delays. 

What This Means for Dental Practices

For our clients, the good news is that we’ve already submitted or are finalizing your extension returns, and those filings are being processed electronically. The IRS’s digital systems are still functioning, and electronic payments continue to post normally.

However, some ripple effects are possible in the weeks ahead:

  • Delayed confirmations or correspondence from the IRS, especially for returns that trigger additional review
  • Longer response times to questions, adjustments, or refund requests
  • Potential backlog growth that could affect future filings if the shutdown lasts several weeks.

In other words, your filings are safe, but don’t expect the usual pace of communication or updates from the IRS until the government reopens.

What We Don’t Yet Know

Like much of the tax community, we’re still waiting for clarity on:

  • How quickly furloughed employees will return once funding is restored
  • Whether the backlog will affect next year’s filing season
  • Whether certain enforcement or compliance activities will be delayed or compressed later in the year.

The Taxpayer Advocate Service is also shut down during the furlough, removing one of the few safety valves for those caught in IRS delays.

What Our Clients Should Do

If you’re already a client of our firm, rest assured: we’re monitoring developments daily and will reach out if anything changes that could affect your filings, payments, or correspondence with the IRS. You don’t need to take any action right now. Our team will continue managing everything on your behalf and keeping you informed.

If you aren’t currently working with us but are concerned about your upcoming filing or payments, now is the time to line up a tax advisor who understands the system and how to navigate unexpected disruptions like this one. While we can’t help new clients with their 10/15 filings, we’re here to assist with future extension filings, electronic submissions, payment verification and tracking, and IRS correspondence once operations resume.

Hang Tight

The IRS shutdown is another reminder of how unpredictable the tax landscape can be. For most dental practices, this won’t create immediate problems, but it does underscore the value of having a team that stays ahead of every detail, especially when communication with the IRS is limited.

At Edwards & Associates, we keep a close eye on developments like these, so you don’t have to. If you have questions about your filing, or if you’d like to make sure your tax plan is protected no matter what happens in Washington, our team is just a call or email away.

IRS Phasing Out Paper Checks on September 30

In March 2025, the White House issued an Executive Order on Modernizing Payments to and from America’s Bank Account (essentially the IRS’s system for payments and refunds). As part of this effort, the U.S. Treasury announced that, starting September 30, 2025, it will no longer send paper checks for IRS payments. From that date forward, refunds and other federal tax payments will only be issued electronically.

For dental practice owners, this may not feel like a big shift since you’re probably already paying and receiving funds electronically. However, it’s important to understand what’s happening and how to help family members who may still rely on paper checks prepare for the change.

Why the Change Is Happening

This particular shift is part of a broader government initiative to modernize payments. Electronic transfers are faster, more secure, and more cost-effective than paper checks, and they also reduce the risk of mail theft, fraud, or lost payments, something that has grown in recent years.

What It Means for You

  • Refunds: If you typically get your IRS refund by check, you’ll need to provide direct deposit details or another electronic option going forward.
  • Payments: While details are still emerging, the IRS is expected to encourage or even require more electronic tax payments. 
  • Exceptions: Some taxpayers, such as individuals without bank accounts or those facing specific hardships, may still be able to request paper checks, but these allowances will be rare.

Why We’re Sharing This

While this change may not affect you directly, we want to ensure everyone is as informed as possible. You may have family members, especially older relatives, who still depend on paper checks. For them, this shift could feel like a big adjustment. Passing along this information now gives them time to prepare before the next tax season and allows them to set up direct deposit or look into alternatives like prepaid debit cards.

What To Do Now

  • Confirm your bank information with the IRS if you normally get refunds. You can confirm or update your bank account information through secure IRS tools like Direct Pay, EFTPS, and the IRS Online Account.
  • Encourage family members who still depend on paper checks to talk to their bank or financial advisor about electronic options.
  • Stay informed: The IRS is expected to release additional guidance on payment acceptance and exceptions over the coming days. We will do our best to keep you updated as new information is released.

Note For Those Yet to File Their 2024 Tax Return

If you have not yet filed your 2024 tax return, but plan to before the October 15 deadline, keep in mind that the new rules will apply to you. Beginning September 30, 2025, IRS refunds will only be issued electronically, and any balance due will be paid the same way. If you don’t provide valid banking information for your refund, you risk delays or even having the payment held until those details are confirmed.

At the end of the day, this change is about making the system faster and more secure. If you have any questions or want help, just let us know. We are here to help make this transition as seamless as possible. 

AI May Be Clever, But Not for Your Finances

Artificial intelligence gets a lot of hype. It can generate quick answers, summarize complex topics, and even pass the INBDE that kept you up at night with flashcards. But when it comes to your personal finances or the financial health of your dental practice, it’s a risky gamble.

According to the recently released Access to Professional Services report, 22% of Americans who turned to AI for medical advice ended up with wrong information, and 19% actually lost money after following its financial recommendations. Even more surprising, 51% of consumers admit they already use AI for financial advice, while another 27% are considering it.

Let’s pause on that for a second. Nearly one in five people lost money because they trusted an algorithm with their personal finances, and yet more than half are still doing it. That’s not efficiency; that’s wishful thinking.

Why AI Isn’t Enough

Here’s the problem: AI doesn’t know you. It doesn’t know your goals, your risk tolerance, your family obligations, or the years you’ve poured into building a dental practice. It just pulls from the internet, a place that, let’s be honest, isn’t exactly known for nuance or universal accuracy.

Sure, AI can spin out generic advice that looks good on the surface. But when the stakes involve your livelihood, your retirement, or the future of your practice, “generic” is the last thing you need. What works for a stranger online may not work for you, and the cost of getting it wrong can be steep.

The Case for Human Advice

Working with an experienced advisor isn’t about paying for information; it’s about paying for interpretation. At Edwards & Associates, we help you sort out what matters in your unique situation, anticipate problems before they derail your plans, and adjust strategies as life (and the market) changes. That’s something no algorithm can do, no matter how sophisticated it seems.

At the end of the day, your financial future deserves more than cut-and-paste advice. Don’t leave it in the hands of a machine. Work with people who know you, understand your practice, and can help you chart a path with confidence.

Don’t Let Bad Tax Advice Drill Into Your Finances

Dentists are no strangers to misinformation. Patients walk in with something they read on the internet about whitening hacks or miracle cavity cures, and you have to set the record straight. The same thing is happening with taxes, only the consequences can be far more expensive.

The IRS recently sounded the alarm about a wave of misleading tax tips spreading on social media. These aren’t just minor misunderstandings; they can lead to audits, rejected claims, and stiff financial penalties. As James Clifford, Director of Return Integrity and Compliance Services, explained: “People who follow this advice could end up with rejected claims and a penalty of up to $5,000 in addition to any other penalties that might apply.” So far, the agency has imposed more than 32,000 penalties, costing taxpayers more than $162 million. That’s a high price to pay for taking advice from a TikTok video.

It’s easy to see how these schemes hook people. Who wouldn’t want to believe there’s a hidden credit that could reduce your tax bill? But just like those too-good-to-be-true dental “hacks,” tax shortcuts you see online can do more harm than good.

The Lure of Fake Deductions

The most common scams promise credits that most taxpayers simply don’t qualify for. A few of the recent offenders include:

  • Fuel Tax Credit: This is real but reserved for very narrow uses like farming equipment or off-highway machinery. Most dentists driving to and from the office don’t qualify.
  • Pandemic-Era Leave Credits: Any claims for sick or family leave credits expired well before 2025 and are no longer available to most taxpayers. 
  • Employee Retention Credit (ERC): Designed for businesses hit by pandemic-related disruptions, but it has also expired. There were so many people filing under questionable circumstances that the IRS permanently paused new claims. 
  • R&D Tax Credits: Unless you’re inventing new dental technology in your spare time, you are very unlikely to qualify for this credit. Practice improvements will not count as “research and development.”
  • Charitable Deduction Scams: You must donate to IRS-qualified organizations to claim this deduction. Inflating donations or picking unqualified groups won’t fly, even if online promoters say otherwise. If you are unsure whether a nonprofit qualifies, we can help verify it for you. 

For dental practice owners and associates alike, falling for one of these “strategies” doesn’t just delay your refund; it can also result in penalties that eat into your hard-earned income.

Why Dentists Are Particularly at Risk

Running a practice or working as an associate often means long hours and little time to dig into the fine print of tax law. It’s tempting to lean on what you see shared by colleagues or on social platforms. But what worked (or appeared to work) for someone else could land you in serious trouble. Just as every patient case is different, every tax situation is unique.

Another danger? Unscrupulous tax preparers. Some promise outsized refunds, but don’t sign the return themselves. This is a huge red flag that you might be working with a “ghost preparer.” If the IRS comes calling, you’ll be left holding the bag. Others may use your information for identity theft.

The Case for Professional Guidance

The reality is simple: tax law is complex, and dentists face unique challenges when balancing personal and practice-related finances. From equipment depreciation to managing associate pay, your situation is nothing like the “average” taxpayer’s. That’s why advice pulled from Facebook or a message board is more likely to cause problems than provide solutions.

When you work with a qualified CPA who knows dentistry, you get:

  • Tailored advice that factors in your practice’s structure, your long-term goals, and your family’s financial picture.
  • Protection from penalties that could far exceed any short-term gain from a dubious deduction.
  • Accountability and peace of mind because your return is signed, accurate, and backed by someone who will stand by you if questions arise.

Stay Smart, Stay Safe

Just like patient care, your finances deserve expertise, not quick fixes. The internet may be full of “hidden” tax tips, but the only truly reliable path is working with a professional who understands both the IRS and the business of dentistry.

Don’t let misinformation eat away at your bottom line. If you’re unsure about a credit, deduction, or strategy you’ve heard about online, check with us before making a move. We are happy to help!

How IRS Staffing Cuts & System Strain Impact Taxpayers

Most dentists don’t spend much time thinking about how the IRS runs until something goes wrong. But when staffing levels are cut and outdated technology struggles to keep up, the ripple effects land directly on taxpayers and their advisors.

We saw this vividly during the COVID-19 years: mailrooms backed up, phone lines overwhelmed, and millions of paper-filed documents literally shredded. Unfortunately, even today, the IRS is still working with decades-old computer systems and a shrinking workforce. That combination makes routine tax administration harder than it should be, and it shows.

Longer Waits and Slower Processing

For dental practice owners expecting refunds, requesting transcripts for a business loan, or trying to resolve a tax notice, patience will be required. Reduced staffing means:

  • Refund delays can stretch for weeks or months beyond normal timelines.
  • Loan application slowdowns when lenders can’t get timely IRS transcripts to verify income.
  • Tax notices drag on, with responses and resolutions sometimes taking months or years.

Fewer Ways to Reach Real Help

Calling the IRS has never been easy, but reduced staff only makes it worse. Hold times of 30–60 minutes used to be considered long; now, taxpayers often face dropped calls or phone lines that simply aren’t staffed.

On the paper side, even though electronic filing has expanded, the IRS still requires many documents to be mailed. When those pile up, processing lags, and sometimes correspondence goes missing altogether. That leaves taxpayers in limbo, waiting for updates that may never come without repeated follow-ups.

The Cost to Small Business Owners

For busy dental professionals, the biggest hidden cost of IRS delays is time. When an issue drags on, accountants and advisors have to chase down answers, resend documents, and make repeated attempts to get clarity. That extra effort translates into higher costs for taxpayers, especially when something simple gets stuck in the system.

Why This Matters for Dental Practices

Dental practices often need timely IRS documentation to move forward with loans, refinancing, or business expansions. Delays can disrupt cash flow planning and add stress to already complex business decisions. And when the IRS is slow to process credits, refunds, or responses to tax notices, it ties up both money and attention you’d rather devote to your patients.

Looking Ahead

Ideally, government leaders would reduce tax complexity and restore IRS staffing and systems so that taxpayer services remain effective. However, under current plans, the IRS is facing deep operating and enforcement cuts, with no clear indication that Congress will reverse course anytime soon. It remains crucial for taxpayers, especially small business owners, to prepare for extended response times and reduced service levels:

  • File electronically whenever possible.
  • Keep thorough records in case correspondence is misplaced.
  • Build in extra time for loans or financial transactions that require IRS transcripts.

As your advisors, we’ll keep monitoring IRS developments and advocate for solutions that make the system work better. In the meantime, know that we’re here to help you navigate delays and reduce stress wherever possible.