What Dental Practice Owners Need to Know About New Federal Payment Changes

Big changes are coming to how the federal government issues payments, and dental practice owners need to be prepared. The White House has announced it will eliminate paper checks for nearly all government payments by September 30, 2025, so the U.S. Treasury has approximately six months to make the necessary adjustments. If you or your practice currently receive any federal payments by check, including tax refunds, Medicare reimbursements, or other government-related funds, it’s time to get ready for a full transition to electronic payments.

Why the Change?

The move to eliminate paper checks is part of a broader effort to improve efficiency, reduce fraud, and save taxpayer dollars. Electronic payments are faster, more secure, and more cost-effective than mailing paper checks. The Treasury estimates that moving to digital payments could save hundreds of millions of dollars annually.

How It Could Affect Dental Practice Owners

If your practice is owed a federal refund or receives any kind of government reimbursement, the payment will now be issued via direct deposit or a similar electronic method. That means:

  • No more waiting on the mail. Payments will arrive more quickly.
  • Reduced risk of lost or stolen checks. Electronic transfers are generally safer.
  • Streamlined bookkeeping. Digital payments are easier to track and reconcile.

For dental practices that rely on timely cash flow to cover payroll, supplies, or operating costs, faster access to funds can make a significant difference.

What You Should Do Now

If you haven’t already made the switch, now’s the time to update your payment preferences:

  • Set up direct deposit for IRS payments. Make sure your practice provides its correct banking information each time you file a return so you can receive any IRS refunds electronically. 
  • Check Medicare provider information. If you participate in Medicare, confirm your electronic payment enrollment is up to date.
  • Talk to your vendors. Many private insurers and suppliers are also pushing for digital payments. Updating your systems now will set you up for a smoother future.
  • Review your accounting systems. Ensure your bookkeeping processes are ready to handle incoming electronic payments efficiently.

What Happens If You Do Nothing?

If you don’t update your information, you could experience delays in receiving payments. In some cases, the government may issue payments via a prepaid debit card if no direct deposit information is available, which could add cost and complications to your accounting and cash management processes. Additionally, prepaid debit cards pose increased risk due to loss, misuse, or internal theft.

How We Can Help

At Edwards & Associates, we specialize in helping dental practice owners navigate financial changes like this one. If you need assistance updating your information with the IRS or Medicare, reconciling digital payments, or ensuring your cash flow remains strong during the transition, we’re here to help.

Preparing Your Dental Practice for Potential Tariff Uncertainty

As the political landscape shifts, many dental practice owners are wondering how potential tariff changes under a new administration might affect their businesses. While it’s impossible to predict exactly what future trade policies will look like, there are smart steps you can take now to prepare without getting caught up in unnecessary worry.

What Could Be Impacted?

Dental practices rely on a range of supplies and equipment that are often manufactured overseas, including:

  • Dental chairs, imaging equipment, and sterilization machines
  • Handpieces and other specialty tools
  • Personal protective equipment (PPE) like gloves and masks
  • Lab materials, including crowns and implants

If tariffs are placed on goods from certain countries, costs for these items could rise. However, much remains uncertain, and even if tariffs are introduced, they could take time to phase in, giving practices an opportunity to adjust.

Don’t Forget Company Vehicles

Another area that could be impacted by tariffs is company vehicles. If your practice owns or leases vehicles for business purposes, potential tariffs on imported automobiles and parts could drive up costs.

Even vehicles manufactured in the U.S. often rely on parts sourced globally. This means:

  • The cost of new vehicle purchases or leases could increase.
  • Repairs and maintenance expenses could rise if imported parts become more expensive.
  • Lead times for service or new vehicle availability could be affected if supply chains are disrupted.

If you anticipate needing to replace or add a business vehicle in the next year or two, it may be worth evaluating your options sooner rather than later. 

What Can Dental Practices Do Now?

  • Review Vendor Relationships: Now is a good time to review where your equipment and supplies are sourced. Talk to your suppliers about contingency plans or alternative options should tariffs impact certain products.
  • Maintain Healthy Inventory Levels: If you rely heavily on imported supplies, consider modestly increasing your inventory on key items to hedge against short-term price increases.
  • Budget with Flexibility: Build some extra flexibility into your supply and equipment budgets for 2025 and 2026. Having a little financial cushion can help absorb any potential price fluctuations.
  • Stay Informed, Not Alarmed: Rely on reputable, non-partisan sources to track policy changes. Professional organizations like the ADA and your trusted advisors (including us!) will help break down what changes could mean specifically for dental practices.
  • Focus on What You Can Control: Operational efficiency, strong vendor partnerships, and proactive financial planning will serve you well regardless of the broader economic environment.

While the headlines may feel overwhelming at times, dental practices are resilient. With some thoughtful planning, you can navigate potential changes smoothly and continue delivering outstanding care to your patients.

If you’d like to discuss ways to strengthen your practice’s financial resilience, our team is here to help.

Why AI Shouldn’t Replace Your Dental CPA (Even If It Sounds Smart)

Artificial Intelligence (AI) is everywhere these days, from writing your social media captions to helping you find your next binge-worthy Netflix show. It’s even creeping into areas like tax preparation and financial planning. And while it might seem tempting to let a clever chatbot or algorithm handle your dental practice’s finances, the truth is: AI doesn’t know you. And when it comes to the long-term health of your dental practice, that matters.

The Promise (and Pitfalls) of AI

We get it, AI is fast, accessible, and sometimes pretty impressive. You can type in a tax question or search for financial strategies and instantly get an answer. Sounds like a time-saver, right?

Well, yes… and no.

While AI tools can help with general education or offer a good starting point for basic research, it doesn’t have access to your full financial picture. It doesn’t understand your business goals, your risk tolerance, or how you’ve structured your practice. And it certainly doesn’t have the foresight to help you understand how today’s decision will impact your practice five or ten years from now.

That’s where things get risky.

What AI Can Help With

There’s a time and place for AI, and when used wisely, it can actually make life easier. Some good examples include:

  • Summarizing articles or industry trends
  • Learning general definitions (what is bonus depreciation, anyway?)
  • Exploring pros and cons of high-level tax strategies
  • Drafting questions to bring to your CPA
  • Automating repetitive admin tasks or creating templates

Think of AI as a research assistant, not a trusted advisor.

What AI Shouldn’t Be Doing

When it comes to financial decision-making, AI can miss the mark badly. Here are just a few areas where relying on AI can steer dental professionals in the wrong direction:

  • Entity selection: Choosing the wrong structure could create long-term tax headaches.
  • Tax planning: AI may suggest a deduction that applies in theory but doesn’t hold up under audit or isn’t worth it based on your revenue.
  • Cash flow management: AI can’t factor in upcoming expansions, changes to insurance contracts, or staffing changes.
  • Practice transitions: Buying or selling a practice is nuanced. AI can’t assess deal terms, negotiate, or ensure you’re building the right legacy.
  • Personal vs. business deductions: AI doesn’t know if that trip to a dental conference is deductible, or if it’s going to raise a red flag.

In short: AI might save you money today, but it could cost you much more in the long run.

Real Expertise > Artificial Intelligence

Tax codes change. Markets shift. And your dental practice will grow, evolve, and face its own unique challenges. AI doesn’t understand the context of your business, and it certainly doesn’t care if you make a mistake. But we do.

We get to know how your business operates, what financial red flags to watch for, and how to help you plan for long-term success, not just short-term savings. Our team keeps up with the regulations, gets to know you personally, and helps you make smart decisions based on your actual circumstances, not just what the internet says.

The Bottom Line

AI is a powerful tool, but it’s not a financial advisor, tax strategist, or business coach. It’s not going to lose sleep if you underpay taxes or overextend your practice. That’s why the smartest move is to use AI as a supplement – not a substitute – for real guidance.

Protecting Your Dental Practice from 2025 Tax Scams

In 2025, IRS-related scams are becoming increasingly sophisticated, requiring vigilance and proactive measures to safeguard your practice and personal finances. Even the savviest of professionals can fall prey to tax scams, so here is the latest information about how these scams work so you (and your family and friends) can avoid becoming a victim.

Key Tax Scams Targeting Professionals in 2025

  1. Phishing Emails and Texts: Scammers impersonate the IRS via email or text, urging you to click malicious links or provide sensitive information.
    • The IRS never initiates contact this way. Exercise extreme caution with unsolicited digital communications.
  2. Phone Scams: Fraudulent callers posing as IRS agents threaten legal action or demand immediate payment, often via unconventional methods like gift cards or wire transfers.
    • The IRS will never demand immediate payment over the phone or resort to threats.
  3. Fake Tax Preparers (“Ghost Preparers”): Unqualified individuals offer tax preparation services but refuse to sign the return. This leaves you liable for any errors or fraud.
    • Always verify your preparer’s credentials and ensure they will sign your return.
  4. Identity Theft: Criminals use stolen personal information to file fraudulent tax returns and claim refunds in your name.
    • Filing early is a proactive defense.
  5. Social Media Scams: Misinformation about tax credits or refunds spreads rapidly on social media, enticing individuals to share personal data.
    • Always verify information through official IRS sources or a trusted professional, like us.

Who Is At Risk?

While anyone can be targeted by tax scams, certain groups are particularly vulnerable:

  • Elderly Taxpayers: Seniors are often targeted because they may be less familiar with digital threats and more likely to trust official-sounding communications.
  • New Taxpayers: Young adults or those filing taxes for the first time may be unaware of IRS procedures and more susceptible to scams that appear legitimate.
  • Small Business Owners: Juggling multiple financial responsibilities may make them more likely to fall for scams, especially those targeting payroll or W-2 information.
  • Non-English Speakers: Individuals with limited English proficiency may be more vulnerable to scams due to language barriers.
  • High-Income Earners: They may be targeted with aggressive tax shelter schemes or promises of unrealistic refunds.
  • Taxpayers Expecting Refunds or Credits: Those anticipating Economic Impact Payments or Recovery Rebate Credits may be more susceptible to scams promising these benefits.
  • Social Media Users: Active social media users may encounter scams spreading misinformation about tax credits or refunds.
  • Victims of Data Breaches: Individuals whose personal information has been compromised in data breaches are at higher risk of identity theft and fraudulent tax return filings.

Essential Protective Measures

It is often those that think they can’t be fooled by a scam like this that fall for them, so don’t think you are immune.

  • Verify All Communications: The IRS primarily initiates contact via mail. Be highly suspicious of unsolicited emails, texts, or calls.
  • Choose a Reputable Tax Professional: Work with a reputable CPA firm (like Edwards & Associates, of course) with specific expertise in serving dental practices.
  • Protect Personal Information: Shred sensitive documents, use strong passwords, and monitor your financial accounts regularly.
  • Report Suspicious Activity: Report any scam calls or phishing emails to the IRS immediately by emailing phishing@irs.gov.

Key Tax Considerations for Dental Practices

While safeguarding against scams is important, remember to optimize your legitimate tax planning too. We can help you:

  • Identify Practice-Specific Deductions: Understand deductions unique to dental practices, such as those related to equipment, continuing education, and professional liability insurance.
  • Plan for Retirement: Implement robust retirement planning strategies to minimize your long-term tax burden.
  • Choose the Best Business Structure: Ensure your practice is structured in the most tax-advantageous way.

Staying informed and proactive is essential to protect your financial interests. We are dedicated to providing expert tax and accounting services tailored specifically to the needs of dental professionals, so contact us today to discuss how we can help you safeguard your practice and optimize your financial strategies.

2025 IRS Rules for Vehicle Depreciation

If your dental practice uses business vehicles, a recent IRS update could affect your tax deductions. For the first time in three years, the IRS has lowered depreciation limits for 2025. These changes, tied to inflation and market trends, impact how dental professionals claim vehicle-related expenses. Here’s a simple breakdown.

Lower Depreciation Limits for Business Vehicles

Each year, the IRS adjusts vehicle depreciation limits. For vehicles placed into service in 2025, the new limits are:

  • With First-Year Bonus Depreciation:
    • Year 1: $20,200 ($200 lower than 2024)
    • Year 2: $19,600 ($200 lower than 2024)
    • Year 3: $11,800 ($100 lower than 2024)
    • Each following year: $7,060 ($100 lower than 2024)
  • Without First-Year Bonus Depreciation:
    • Year 1: $12,200 ($200 lower than 2024)
    • Later years: Same as above

For dental professionals deducting vehicle expenses, this marks a shift after several years of increases.

What About Leased Vehicles?

If you lease a vehicle for your practice, the IRS requires an income inclusion adjustment to ensure fair tax treatment between leased and owned vehicles. The amount varies based on the vehicle’s market value and lease duration. If you’re leasing, talk to your accountant to see how this affects your tax planning.

Why Did the Limits Change?

The IRS adjusts depreciation limits based on market trends. Recent Bureau of Labor Statistics data shows:

  • Used car prices increased by 1% in the past year.
  • New car prices dropped by 0.3% in the same period.

These shifts influenced the IRS’s decision to reduce depreciation limits.

How Does This Affect Your Dental Practice?

  • Tax Planning – Thinking of buying or leasing a vehicle? These updates may impact your tax benefits. Check with your accountant for the best approach.
  • Compliance – If you lease, be sure you’re calculating required income inclusions to stay IRS-compliant.
  • Budgeting – Since depreciation affects cash flow and tax deductions, plan accordingly to avoid surprises.

What Should You Do Next?

If you’re considering purchasing or leasing a business vehicle in 2025, understanding these IRS updates is key to maximizing deductions and avoiding tax pitfalls. Need help? Contact us today for advice on tax strategies and vehicle deductions for your practice.

What Dentists Need to Know About Tax Changes Under Trump

Since President Donald Trump’s re-election, several tax policy changes have been proposed that could significantly impact dental professionals both personally and in their practices. Since it is always important to stay informed about developments that can impact our clients, we wanted to share what we know now since it could impact the decisions you make this year and going forward. 

Extension of Tax Cuts and Jobs Act (TCJA) Provisions

The administration aims to extend key provisions of the TCJA, many of which are set to expire at the end of 2025. For dental practices structured as pass-through entities, the continuation of the 20% Qualified Business Income (QBI) deduction is particularly relevant. This deduction allows eligible businesses to deduct up to 20% of their qualified business income, effectively reducing taxable income. Without legislative action, this benefit may expire, potentially increasing tax liabilities for many dental practitioners. 

Reinstatement of 100% Bonus Depreciation

The administration is considering reinstating 100% bonus depreciation retroactively. This provision would enable dental practices to immediately deduct the full cost of qualifying equipment and property in the year of purchase, rather than depreciating the assets over time. For practices planning to invest in new dental equipment or technology, this change could offer substantial tax savings, if it happens. 

Potential Reduction in Corporate Tax Rates

A proposal to lower the corporate tax rate from the current 21% to 15% is under discussion. For dental practices operating as C-corporations, this reduction could result in significant tax savings, enhancing cash flow and providing opportunities for reinvestment into the practice. 

Impact on Dental Mergers and Acquisitions

The current political climate introduces uncertainty in the dental mergers and acquisitions (M&A) market. Factors such as potential tax law changes and economic policies may influence practice valuations and the feasibility of transactions. Dental professionals considering buying or selling a practice should closely monitor these developments and consult with us so we can help you navigate the evolving landscape. 

Personal Tax Considerations

On a personal level, proposed tax policies may affect individual dental professionals. Discussions include reducing the top long-term capital gains tax rate from 20% to 15%, which could influence investment strategies and financial planning. Additionally, potential changes to deductions and credits may impact personal tax returns. Stay informed and reach out to us so we can put together a tax plan that optimizes your personal outcomes. 

The evolving tax landscape under the current administration presents both opportunities and challenges for dental professionals. It is essential to stay abreast of policy changes to ensure both your personal and practice-related financial strategies are optimized in response to these developments.

2025 Mileage Rate Changes: New Rate Puts More Money Back in Your Pocket

While most dentists don’t spend their day on the road, there is often some moving from place to place required for your job. Starting January 1, 2025, the IRS is making a change that could impact the way you track and claim those travel expenses. The standard mileage rate for business use will increase to 70 cents per mile, up from 67 cents in 2024. While it may sound small, this increase could lead to bigger tax savings for practice owners who frequently log business miles.

What’s New for 2025?

Here’s a quick look at the updated rates for various types of mileage:

  • Business travel: 70 cents per mile (up from 67 cents in 2024)
  • Medical and moving mileage (for qualified active-duty military): 21 cents per mile (unchanged)
  • Charitable driving: 14 cents per mile (unchanged, as set by federal law)

These rates apply to gas, diesel, electric, and hybrid vehicles, so no matter what you drive, you’re covered.

How Vehicle Depreciation Affects Your Deductions

When you use your vehicle for business, part of the standard mileage rate covers depreciation — the natural loss in value of the vehicle over time. For 2025, the IRS has set the depreciation portion at 33 cents per mile. This matters if you plan to sell or trade in your vehicle down the line since this depreciation affects how much of its value you can claim as an expense.

Two Ways to Calculate Your Deduction

There are two ways to claim a vehicle expense deduction:

  1. Standard mileage rate: The simpler option, where you track your total business miles and apply the IRS-approved rate per mile to calculate your deduction.
  2. Actual expense method: This method requires you to track every expense tied to the vehicle (like gas, insurance, maintenance, and depreciation) and deduct a percentage based on business use.

If you’re unsure which method works best for your dental practice, our team can help you run the numbers and identify which option gives you the biggest benefit.

Changes to FAVR Plans for Employers

If you’re a dental practice owner reimbursing employees for driving their personal vehicles for business purposes, you should know about the IRS changes to Fixed and Variable Rate (FAVR) plans. For 2025, the IRS set the maximum standard automobile cost at $61,200, which is $800 lower than in 2024. This cap applies to the fleet-average valuation rule and the vehicle cents-per-mile rule as well. If you’re managing reimbursements for your team, it’s important to stay on top of these changes to ensure you’re compliant with IRS rules.

What Should You Do to Stay on Track?

Here are a few simple steps to make sure you’re maximizing every available deduction:

  • Track Your Mileage: Use an app or software to log every business-related trip, ensuring you capture every deductible mile.
  • Choose the Best Deduction Method: The standard mileage rate is simple, but the actual expense method may save you more, especially if you’re driving a lot. We can help you determine which option is right for you.
  • Check Your Reimbursement Practices: If you’re reimbursing employees for business travel, make sure you’re following updated FAVR rules to avoid IRS penalties.

If you’d like to discuss how these changes impact your 2025 taxes, reach out to our team today. We’re here to help you make every mile count.

Source: IRS Notice 2025-5

Exploring Locum Tenens for Dentists

If you’re a dentist looking for more flexibility, less overhead stress, and maybe even a chance to see the country (or just play more golf), the idea of becoming a locum tenens dentist might be right up your alley. In the latest episode of Beyond Bitewings, we sat down with Shelby and Sarah from Barton Associates, the fourth-largest staffing agency in the U.S., to discuss the ins and outs of locum tenens for dental professionals.

Whether you’re a recent dental school graduate looking for experience, a mid-career dentist seeking variety, or a “kind-of-retired” dentist who wants to stay in the game on a part-time basis, locum tenens offers a unique way to practice on your terms. Here’s a look at what locum tenens is, who it’s best for, and how Barton Associates makes the whole process simple.

What is a Locum Tenens Dentist?

The term “locum tenens” is Latin for “to hold one’s place.” Essentially, locum tenens dentists step in to temporarily fill a spot at a dental practice, often when the regular dentist is out on leave, dealing with an emergency, or when a practice is short-staffed.

But locum tenens isn’t just for practices in a bind — it’s also a great option for dentists looking for a change of pace. You get to work on a schedule that fits your life while still earning an income. Plus, you can avoid many of the headaches that come with running a practice, like insurance paperwork and managing staff.

According to Shelby and Sarah from Barton Associates, there’s been a huge rise in dentists choosing this path, especially since COVID-19 brought on a wave of burnout. Locum tenens allows dentists to keep practicing their craft while cutting out a lot of the stress that full-time practice ownership can bring.

Who is Locum Tenens For?

The beauty of locum tenens is that it works for dentists at all stages of their careers. Here are a few groups who can benefit most:

1. Recent Dental School Graduates

Finding the “perfect” first job right out of school can be tough. Locum tenens gives new grads a chance to test the waters. You can work at different types of practices — private offices, DSOs, and community health clinics — and see which setting suits you best.

Why It’s a Win:

  • Experience multiple practice settings without long-term commitments.
  • Boost your resume and credentials while figuring out what kind of practice you want.
  • Save time on job hunting — Barton Associates handles it for you.

2. Semi-Retired Dentists (A.K.A. “Not Ready to Call It Quits”)

If you’re a dentist who’s technically retired but still loves the craft, locum tenens could be your perfect “part-time retirement plan.” Many retired dentists aren’t ready to fully walk away but aren’t interested in the grind of owning or running a practice. Locum tenens lets you work when and where you want, without all the admin headaches.

Why It’s a Win:

  • Stay in the game while working on your terms (not your office manager’s).
  • Travel to new places for short assignments (and, yes, travel expenses are paid for).
  • Some dentists even bring their pets, kids, and yes — even horses (yes, this actually happened) on assignments.

3. Full-Time Dentists Seeking Flexibility or Burnout Relief

If you’re feeling overwhelmed by the business side of running a practice, locum tenens might be the breath of fresh air you need. It’s a chance to keep your clinical skills sharp without managing patient files, handling insurance paperwork, or leading a team of employees.

Why It’s a Win:

  • Focus on patient care without managing the “business” of dentistry.
  • Enjoy a more flexible schedule — work a few weeks on, then take a few weeks off.
  • You can travel or stay close to home, depending on your preferences.

How Does It Work?

Curious about what the process looks like to become a locum tenens dentist? Here’s a simplified breakdown:

  1. Reach Out to Barton Associates: You’ll chat with a recruiter like Shelby or Sarah, who will learn about your career goals, where you’d like to work, and what type of assignments you’re looking for.
  2. Credentialing and Licensing: This is the “paperwork phase” where you provide your licenses, credentials, and other documents. Luckily, Barton has a whole team that handles this for you, saving you from those endless phone calls and email threads with licensing boards.
  3. Find the Right Fit: Once everything is ready, Barton will connect you with open assignments that match your preferences — whether it’s a week-long gig in New Mexico or a 3-month stay at a DSO in California.
  4. Start Working: You’ll travel (if necessary), get set up at the office, and get to work. Travel costs and accommodations are often included.
  5. Get Paid: Barton pays you directly as an independent contractor. No awkward conversations with the dental office about payment.

Why Locum Tenens Could Be Better Than a Part-Time Associate Position

If you’ve considered picking up a part-time associate position at a local practice, you might think, “Why not just do that?” But as the podcast revealed, there are some big differences.

  • Flexibility: Part-time associate roles often come with set schedules, while locum tenens offers more control over when and where you work.
  • Fewer Complications: Some practices are hesitant to hire an associate who owns a practice of their own. Locum tenens eliminates that hesitation.
  • Variety: Locum tenens dentists get to work in different practice settings — DSOs, community health clinics, private practices, and more.

Final Thoughts

If you’re a dentist craving freedom, flexibility, or just a chance to do what you love without the headaches of running a practice, locum tenens might be exactly what you need. Whether you’re looking for adventure, retirement balance, or a chance to sample different types of practice settings, locum tenens offers the chance to customize your dental career.

With support from Barton Associates, the process is simpler than you might think. And who knows — you could be golfing in a new state every weekend while getting paid to practice dentistry during the week.

Want to learn more? Check out the full Beyond Bitewings podcast episode and if locum tenens sounds like a good fit for you, reach out to Barton Associates to learn more.

How Potential 2025 Tax Changes Could Impact Your Dental Practice and Personal Finances

With Trump’s proposed 2025 tax law changes on the horizon, it’s crucial for dental practice owners and their families to stay informed about how these updates might shape their financial strategies. While we can’t know if the proposals discussed during the campaign will pan out in the end, it is still important to understand what they are and how they can impact your dental practice and personal financial planning. 

Below, we’ve summarized some of the the proposals, focusing first on business-related changes and then on those that could affect your personal finances.

Potential Tax Changes Impacting Dental Practices 

1. Restoring TCJA Business Tax Provisions

  • What It Is: A proposal to reinstate business-friendly provisions from the Tax Cuts and Jobs Act (TCJA), such as 100% bonus depreciation, research and development expensing, and interest deduction limitations.
  • Government Impact: This is expected to increase gross national product (GNP) by 0.5% and add 119,000 jobs but reduce tax revenue by $643 billion over 10 years.
  • What It Means for You: These changes would allow your dental practice to benefit from significant deductions on investments like new equipment or technology. This could free up cash flow for reinvestment in your business.

2. Encouraging Domestic Production

  • What It Is: A deduction of 28.5% for domestic production activities, effectively reducing corporate tax rates on qualifying activities to 15%.
  • Government Impact: Expected to increase GNP by 0.2% and add 38,000 jobs, but it could reduce tax revenue by $361.4 billion over 10 years.
  • What It Means for You: Dental practices that rely on domestically manufactured supplies or equipment could see lower costs and additional tax savings, making it easier to invest in your practice.

3. Extending the Opportunity Zone (OZ) Program

  • What It Is: Extending the OZ program, which provides tax benefits for investments in underserved communities.
  • Government Impact: Stimulates community development by encouraging housing, infrastructure, and business growth in underserved areas.
  • What It Means for You: If you’re considering opening a new location in an underserved area, the OZ program could offer tax deferrals or exemptions, making expansion more financially viable.

Potential Tax Changes Impacting Individuals

1. Permanent Gift and Estate Tax Exemptions

  • What It Is: Maintaining the current lifetime gift and estate tax exemption of $13.99 million per spouse.
  • Government Impact: Expected to reduce tax revenue by $205.6 billion over 10 years with minimal economic effects.
  • What It Means for You: This simplifies estate planning and makes it easier for high-net-worth families to pass on wealth to future generations.

2. No Tax on Tips

  • What It Is: A proposal to exempt tips from income taxes, though employment taxes would still apply.
  • Government Impact: This would have a negligible effect on GNP but would reduce tax revenue by $118 billion over 10 years.
  • What It Means for Your Practice: While it won’t directly impact dentists, exempting tips from taxes could benefit service industry employees, potentially easing wage pressures.

3. Exempting Overtime Pay from Federal Income Tax

  • What It Is: A proposal to exempt overtime pay from federal income taxes.
  • Government Impact: Expected to increase GNP by 0.3%, create 405,000 jobs, and reduce tax revenue by $747.6 billion over 10 years.
  • What It Means for You: If your practice employs hourly staff, this could make overtime work more appealing, helping you retain staff and cover busy periods more effectively.

4. Federal Income Tax Exemption for Social Security Benefits

  • What It Is: Eliminating federal income taxes on Social Security benefits.
  • Government Impact: Projected to increase GNP by 0.1%, add 55,000 jobs, and reduce tax revenue by $1.2 trillion over 10 years.
  • What It Means for You: Retirees, particularly those in higher tax brackets, could see significant savings, making this a boost for retirement planning.

Looking Ahead

These potential changes highlight the importance of staying proactive with your financial and tax strategies. While some updates offer new opportunities for growth and savings, others may introduce challenges that require careful planning.

By working closely with us, you can position your dental practice and personal finances to accommodate these changes successfully. Reach out to our team today to discuss how these proposals might impact your future.

Understanding Changes in Digital Asset Reporting for Dental Practices

With the rise of cryptocurrencies and other digital assets, the IRS has been expanding its focus on ensuring proper tax compliance in this evolving space. Significant changes to digital asset reporting will affect businesses, including dental practices. These changes primarily center around reporting obligations and the expiration of safe harbor provisions. 

What is the Digital Asset Reporting Rule?

Digital asset reporting refers to the requirement that businesses and individuals disclose their holdings and transactions involving cryptocurrencies or other digital assets. This mandate was first introduced as part of the Infrastructure Investment and Jobs Act (IIJA) signed into law in 2021. The law requires brokers to report cryptocurrency transactions to the IRS and provide information to the account holder, similar to how traditional financial institutions report stock or bond sales.

The IRS expanded its definition of brokers to include entities facilitating cryptocurrency exchanges and transactions, meaning that dental practices may now have more stringent reporting obligations if they handle digital assets.

What Does the Expiration of the Safe Harbor Mean?

Since the IIJA passed, a transitional safe harbor has been in place to provide taxpayers some flexibility in adjusting to the new reporting rules. Under this safe harbor, taxpayers were not penalized for underreporting or failing to report certain digital assets if they made a good faith effort to comply.

However, this safe harbor expires on January 1, 2025. This means that starting in 2025, dental practices and other businesses that deal with digital assets will be fully accountable for meeting the reporting requirements. Failure to comply could lead to penalties, audits, or other tax-related consequences.

Key Changes and What to Expect 

Several changes in the IRS’s approach to digital asset reporting will take effect in 2025, which dental practice owners should be aware of:

  1. Broader Reporting Requirements: Businesses will need to report all cryptocurrency transactions to the IRS, including those made on behalf of patients or as part of payment for services. This also applies to indirect exchanges and sales through third-party platforms.
  2. New Reporting Forms: The IRS will require businesses to use new reporting forms, such as the Form 1099-DA, which will document transactions related to digital assets, similar to the traditional Form 1099-B for securities.
  3. Penalties for Non-Compliance: Once the safe harbor ends, failure to comply with the new digital asset reporting requirements can result in significant penalties. Businesses may face audits or fines for underreporting or failing to report cryptocurrency transactions.
  4. Clarification on Digital Asset Definitions: The IRS has expanded the definition of “digital assets” to include not only cryptocurrencies but also NFTs and other digital tokens. Practices that accept any form of these digital assets will need to ensure proper documentation and reporting.

What Dental Practices Should Do to Prepare

With the expiration of the safe harbor fast approaching, dental practices should take the following steps to ensure they remain compliant with IRS rules:

  • Review Existing Digital Asset Policies: Practices that accept cryptocurrency or other digital assets as payment should assess their current practices for recording and reporting these transactions.
  • Consult with E&A: Given the complexities surrounding digital asset taxation, consulting with tax professionals who understands the specific requirements for digital assets is crucial. 
  • Upgrade Financial Tracking Systems: If your practice deals with digital assets, make sure your accounting and payment systems are equipped to properly track these transactions for IRS reporting.
  • Educate Staff: Ensure that your practice managers and financial staff are up to speed on the new reporting obligations. Having clear processes for handling cryptocurrency payments and other digital assets will be critical for compliance in 2025 and beyond.

As the IRS continues to increase its focus on digital assets, it is vital for dental practices to stay proactive and compliant. With the expiration of the safe harbor, proper reporting is no longer optional, and penalties for failing to meet IRS standards can be significant. Now is the time to review your practice’s digital asset policies and ensure you are prepared for the changes that will come into effect in 2025.

For more detailed guidance, dental practice owners should reach out to us to help them navigate these updates and avoid costly mistakes.

Retirement Contribution Limits for 2025

The IRS recently released Notice 2024-80, detailing retirement plan contribution limit changes for 2025. These updates offer dental practice owners, administrators, and employees an opportunity to increase retirement savings. 

Increased 401(k) Contribution Limits

For 2025, the IRS raised annual contribution limits for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan:

  • Employee Contribution Limit: Increased from $23,000 in 2024 to $23,500 for 2025.
  • Catch-Up Contribution (Ages 50+): Remains at $7,500.
  • Secure 2.0 Catch-Up Contribution (Ages 60-63): $11,250 for employees nearing retirement.

Dental practice employees aged 50 and older can now contribute up to $31,000 to their retirement accounts, allowing them to grow their savings more robustly as they approach retirement.

IRA Contribution Limits Remain Steady

For those using traditional or Roth IRAs, the annual contribution limit remains unchanged at $7,000 in 2025, with a $1,000 catch-up for those 50 and older. Although there is no increase here, IRAs continue to be a valuable addition to retirement planning strategies, particularly for dentists and practice employees looking to diversify retirement savings.

Roth IRA Income Limits

The IRS also adjusted income thresholds for Roth IRA contributions, providing opportunities for higher-income earners to still participate, albeit with limits:

  • Single and Head of Household Filers: Phase-out range is $150,000 – $165,000.
  • Married Filing Jointly: Phase-out range is $236,000 – $246,000.

These limits mean that practice owners and employees within these income ranges may have reduced Roth IRA contribution options, while those exceeding these thresholds are ineligible.

SEP and SIMPLE IRA Limit Increases for 2025

For dental practice owners utilizing Simplified Employee Pension (SEP) IRAs or Savings Incentive Match Plan for Employees (SIMPLE) IRAs, there are new limits for 2025:

  • SEP IRAs: Increased to $70,000 from $69,000 in 2024.
  • SIMPLE IRAs: Employee contribution limit raised to $16,500, with the $3,500 catch-up remaining unchanged.

These adjustments make SEP and SIMPLE IRAs even more attractive for dental practices, particularly for smaller practices that want flexible and tax-efficient retirement options.

Higher Limits for Defined Benefit Plans

Defined benefit plans, typically more common in larger practices or for practice owners aiming for high retirement contributions, also saw an increase to $280,000 from $275,000 in 2024. They can provide substantial savings potential, enabling dental practice owners to make large contributions that help secure their retirement and enjoy tax advantages.

HSA Contribution Limits Updated

While not a retirement plan, Health Savings Accounts (HSAs) are an essential part of long-term financial planning, especially when considering future healthcare costs:

  • Individual Contribution Limit: Increased to $4,300.
  • Family Contribution Limit: Increased to $8,550.
  • Catch-Up Contribution (Ages 55+): Remains at $1,000.

HSAs can complement a retirement plan by covering qualified medical expenses in retirement, allowing practice owners and employees to plan more effectively for future healthcare needs.

Strategic Considerations for Dental Practice Owners

These retirement plan updates provide a prime opportunity for dental practices to enhance their employee benefits and retirement strategies. Here are a few ways to leverage these changes:

  1. Encourage Increased Contributions: Educate employees on the benefits of maximizing their retirement contributions, especially with the new limits in place.
  2. Evaluate Plan Offerings: If your practice doesn’t currently offer a retirement plan, consider setting up a SIMPLE or SEP IRA, which provides higher contribution limits and tax benefits.
  3. Take Advantage of Catch-Up Contributions: For those over 50, the ability to make catch-up contributions is a valuable tool to accelerate retirement savings.
  4. Consider Employer Contributions: Adding employer contributions or matching can enhance employee satisfaction and loyalty, helping retain valuable team members.

Planning for a Financially Secure Future

With the updated IRS retirement plan limits for 2025, dental practice owners and their employees have an opportunity to boost their savings and ensure a financially secure future. To make the most of these changes, reach out to us for individual planning. Proper planning can help you maximize tax benefits, increase retirement readiness, and support your team’s financial health.

If you have questions about how these changes could impact your practice’s retirement planning, reach out to us for guidance. We’re here to help you understand the new limits and implement strategies to make the most of them.