IRS Shares More Details on the Phase-Out of Paper Checks

Key Takeaways

  • The IRS is continuing its move away from paper tax refund checks, making electronic refunds the default.
  • If direct deposit information isn’t provided, the IRS may issue a notice requesting banking details instead of automatically mailing a check.
  • Paper checks may still be issued in limited situations, but they are no longer the default and will become less common over time.
  • These changes do not affect how tax returns are filed, only how refunds and payments are delivered.
  • Most dental practices already operate electronically, but family members or employees who rely on paper checks may experience delays if they aren’t prepared.

Back in September, we wrote a blog post outlining the IRS’s plan to phase out paper tax refund checks, a shift that moves the default toward electronic refunds and, over time, electronic payments. In that earlier post, we focused on the big-picture considerations: why the IRS is making this change, the anticipated timeline, and what taxpayers should expect as the transition unfolds.

Recently, the IRS released additional guidance that fills in many of the practical details. Rather than revisiting what is changing, this update addresses the more common follow-up questions we’ve been hearing, namely, how the process actually works and what happens if banking information is not provided.

For most dentists and practice owners, this won’t feel disruptive. You likely already file electronically, receive refunds via direct deposit, and make payments online. However, these changes are still important, especially if you assist family members, employees, or others who continue to rely on paper checks.

What’s New in the Latest IRS Guidance

What if direct deposit information isn’t included on the return?

If a taxpayer files a return without providing direct deposit details, the IRS will still process the return. However, instead of automatically issuing a paper check, the IRS may send a CP53E notice requesting updated banking information. The taxpayer generally has 30 days to respond.

It’s important to note that the IRS will only communicate this request through an official letter mailed to the taxpayer’s last known address, never by email, text message, or phone call.

This additional step can delay refunds and cause confusion for taxpayers who are expecting a check to arrive in the mail. Including accurate direct deposit information upfront remains the most efficient way to avoid delays.

Will paper checks still be an option?

Yes, but only in limited circumstances. The IRS acknowledges that some taxpayers do not have access to bank accounts or electronic payment tools. In those cases, alternative electronic methods may be used, and paper checks may still be issued as a last resort. That said, paper checks will no longer be the default, and their availability is expected to continue narrowing over time.

Does this change how tax returns are filed?

No. There are no new forms and no changes to the filing process itself. This guidance affects how refunds and payments are delivered after a return is processed, not how the return is prepared or submitted.

Can taxpayers still pay the IRS by check?

For now, yes. Paper checks and money orders are still accepted. However, the IRS continues to encourage electronic payment options such as Direct Pay, EFTPS, and debit or credit card payments. The long-term direction is clearly toward fully electronic transactions.

Will refunds take longer because of this?

Generally, no. electronic refunds remain the fastest and most secure option. Delays primarily happen when a taxpayer expects a paper check that is no longer automatically issued.

Why This Matters, Even If Your Practice Is Already Digital

Most dental practices already operate in a fully electronic environment. However, many people around you, particularly elderly relatives, retirees, or individuals who are uncomfortable with electronic banking, may not be prepared for this transition.

Some still expect a refund check to arrive in the mailbox. Others hesitate to provide banking information due to security concerns. Making them aware of these changes now can help them:

  • Avoid delayed or missing refunds
  • Understand why a paper check may no longer arrive
  • Set up direct deposit or alternative electronic options before filing

For taxpayers who rely on timely refunds, this guidance is especially important.

What to Do Now

For dentists and practice owners, the action steps are straightforward:

  • Keep using electronic filing, refund, and payment methods
  • Verify banking information each year
  • Share this IRS update with family members or employees who still rely on paper checks

And as always, if questions come up, whether about refunds, electronic payment options, or how these changes fit into your broader tax planning, we’re here to help you navigate the details with confidence.

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.

7 Common Tax Myths and the Truth Behind Them

Key Takeaways

  • Many tax myths come from outdated rules or misinformation and can lead to missed deductions or IRS issues.
  • All income, including small amounts from side gigs, must be reported unless specifically exempted by the IRS.
  • Cash payments, home office rules, and deductions depend on documentation, not assumptions based on others’ experiences.
  • Paying contractors in cash still requires issuing 1099s when thresholds are met.
  • Effective tax planning should be done year-round, not just at filing time.

Tax myths spread fast. Some come from outdated rules, others from social media, and a few from misunderstandings that have lingered for decades. No matter their origin, believing them can lead to missed deductions, IRS notices, or poor financial decisions.

Below are some of the most common tax myths we hear, along with where they came from and what’s actually true.

Myth #1: “If I get audited, it must mean I did something wrong.”

Reality: Audits don’t always signal a mistake. In fact, many audits happen because a return was randomly selected, flagged by software, or included deductions outside normal statistical patterns. Some are simple correspondence audits, requiring only documentation.

Why this myth exists: Decades ago, audits were more frequent and more rigorous. Many people also assume the IRS is only looking for “wrongdoing,” when in reality, the agency is verifying data.

Best Practice: Keep organized records for at least seven years, and don’t fear legitimate deductions simply because you might be questioned about them later.

Myth #2: “If I don’t make much money from a side gig, I don’t have to report it.”

Reality: All income is taxable unless the IRS specifically exempts it. That includes money earned from gig work, reselling items online, babysitting, lawn care, hobby income, and freelance work, whether you receive a 1099 or not. There is no minimum dollar amount that makes side-gig income “tax-free” or exempt from reporting.

However, one important threshold does apply: If your net self-employment earnings are $400 or more, the IRS requires you to file a tax return because you owe self-employment tax. But even if your net profit is below $400, you may still be required to file, depending on your total income, filing status, or other tax circumstances.

Why this myth exists: For years, people assumed that “no 1099 = no reporting,” or believed small earnings wouldn’t matter. But the tax code has always required income to be reported, regardless of documentation.

Best Practice: Track every dollar you earn from side work. If it hits your Venmo, PayPal, Cash App, bank account, or even your pocket in cash, assume it’s taxable and report it correctly.

Myth #3: “Cash-based businesses don’t need to worry as much because cash isn’t traceable.”

Reality: The IRS pays close attention to cash-heavy businesses. Restaurants, salons, small retailers, repair shops, and contractors are all areas where the IRS uses statistical models to estimate expected income.

Why this myth exists: Before electronic banking became widespread, unreported cash was easier to hide. Not anymore.

Best Practice: Use a point-of-sale system, keep detailed logs, and deposit cash regularly. Clean books protect you far more than cutting corners.

Myth #4: “My friend wrote it off, so I can too.”

Reality: Deductions depend on your specific situation, not what someone else did. A truck may be deductible for one person and completely nondeductible for another. Same with cell phones, home office space, and vehicle mileage.

Why this myth exists: People often misunderstand why a deduction applied to them or forget important details such as business purpose, percentage of use, documentation, etc.

Best Practice: When in doubt, ask us before assuming something is deductible. Advice from a friend, coworker, or social media influencer can be dangerous.

Myth #5: “If I pay someone in cash, I don’t need to issue them a 1099.”

Reality: The method of payment does not change reporting rules. If you pay a contractor $600 or more in a year, whether by cash, check, Zelle, or Venmo, you generally must issue a 1099-NEC. In most cases, if you get audited and didn’t issue the 1099 to the vendor, the IRS will disallow any deduction taken for the payment.

Why this myth exists: This confusion dates back to when paper checks were the norm and digital payments didn’t exist. Many also assume the IRS only tracks electronic payments.

Best Practice: Collect W-9s before paying vendors and contractors. You’ll save yourself a headache at tax time.

Myth #6: “I can claim a home office deduction only if I have a separate room with a door.”

Reality: The IRS requires exclusivity and regular use, not a physical door. A desk in a corner may qualify if it is used exclusively for business.

Why this myth exists: Home office audits were common decades ago, causing long-term fear. Many taxpayers also confuse the IRS rules with workplace policies.

Best Practice: If an area of your home is used exclusively and regularly for business, document it and discuss the deduction with your tax professional.

Myth #7: “Tax planning only matters at the end of the year.”

Reality: Many tax-saving opportunities require planning months in advance. Retirement contributions, entity structure decisions, depreciation timing, estimated payments, and charitable strategies all work best with planning throughout the year.

Why this myth exists: For years, tax preparation and tax planning were treated as the same thing, but they aren’t. By the time you’re filing a return, most opportunities are gone.

Best Practice: Schedule at least one mid-year tax review with your accountant. A little planning can save significantly more than last-minute scrambling.

Don’t Be Fooled

Tax myths may be widespread, but they don’t have to derail your finances. When in doubt, ask a qualified tax professional, like us, especially before making decisions based on advice from family, friends, or social media.

If you have questions about any of these myths or want help planning for 2025 and beyond, our team is here to help.

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. 

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.

What the Latest Federal Tax Bill Means for Dental Practices and Their Owners

After months of debate, Congress has passed an enormous budget reconciliation bill with a wide range of tax changes affecting small businesses and individual taxpayers alike. While the headlines focus on sweeping economic measures, many of the provisions could directly shape how dental practices operate, invest, and plan ahead.

If you own or manage a dental practice, here are the highlights you should know and steps you might consider in response.

New Incentives for Equipment and Technology Investments

One of the most significant changes is the return of full expensing for major purchases. If you’re planning to upgrade your equipment, invest in advanced imaging technology, or modernize your administrative systems, the revised Section 179 rules will allow you to deduct up to $2.5 million of qualifying purchases in the year you buy them.

Previously, deductions had to be spread out over time, but the accelerated write-off can now provide immediate tax relief and help improve cash flow. Keep in mind that if your total qualifying purchases exceed $4 million, the deduction begins to phase out.

More Room to Deduct Interest Expenses

If you’ve taken out loans to renovate your office, open a second location, or acquire another practice, the rules for deducting interest payments just became more favorable. The new law allows interest deductions to be calculated using EBITDA, earnings before interest, taxes, depreciation, and amortization, rather than the narrower EBIT measure.

This adjustment increases the amount you can deduct each year, which can be especially helpful for practices carrying debt from growth or equipment financing.

Expanded Research and Development (R&D) Deductions

While many dental practices don’t think of themselves as research businesses, certain investments – like developing proprietary patient education materials, implementing new digital workflows, or testing innovative service models – can qualify for R&D deductions. Under the bill, smaller businesses with less than $31 million in gross receipts (which is most dental practices) can immediately deduct eligible R&D costs rather than amortizing them over time. This change rewards innovation and may help offset the expense of improving patient care.

QSBS Exclusion Returns for C-Corporations

If your practice is organized as a C-corporation and you’re considering selling your business in the next few years, take note of the revived Qualified Small Business Stock (QSBS) exclusions. Owners who meet certain requirements, including holding their shares for at least five years, may be able to exclude up to 100% of gains from federal tax when they sell. This could translate into substantial tax savings at the time of exit or succession planning.

SALT Deduction Cap Temporarily Increased

The bill raises the cap on state and local tax (SALT) deductions to $40,000, with a gradual phaseout beginning at $500,000 of income. However, this relief is temporary; the cap is scheduled to revert to $10,000 in 2030. For dental practice owners, especially those operating pass-through entities, this creates a narrow planning window. It’s a good time to reevaluate whether the entity-level SALT workaround remains effective and how to best optimize deductions while the higher cap is in place. Strategic tax planning now can help minimize liabilities before the cap drops again.

Personal Tax Changes That Matter to Practice Owners

While these business provisions can influence practice finances, there are also personal tax updates to be aware of:

  • Expanded Child Tax Credit: Temporarily increased to up to $2,500 per qualifying child, with more flexibility in how it phases in.
  • New Deductions for Common Expenses:
    • Up to $6,000 in additional standard deduction for taxpayers over 65.
    • Interest deductions on loans for U.S.-assembled electric vehicles, up to $10,000.
    • Above-the-line deductions for overtime and tip income (though not likely as relevant for dental offices).
  • No Federal Tax on Tips: While this mostly affects hospitality workers, employees with tip income will no longer pay federal tax on it.
  • Individual Tax Rates Extended: The lower tax brackets set in 2017 are extended through 2028, helping many owners save on personal income tax.

How Your Practice Can Prepare

Navigating these changes doesn’t have to be overwhelming. Here are a few things you should consider:

  • Evaluate planned purchases of equipment and technology to optimize deductions.
  • Review financing structures to maximize interest expense benefits.
  • Assess your entity type and QSBS eligibility if a sale or transition is on the horizon.
  • Update your personal tax plan to leverage available deductions and credits.

Even though this legislation is complex, and this just scratches the surface of what it contains, it creates some opportunities to strengthen your practice’s financial position while supporting your personal goals. If you’d like to discuss how these updates apply to your specific situation, we’re here to help.

What Dental Practice Owners Should Know About the Latest Tax Bill

A new tax bill making its way through the House Ways and Means Committee could significantly impact dental practice owners.  While nothing is finalized yet, understanding what’s in the bill and what could change is the first step toward preparing for potential impacts in 2026 and beyond.

Here are some of the proposed highlights most relevant to dental practice owners:

  1. Enhanced Pass-Through Deduction: The bill would increase the Qualified Business Income (QBI) deduction from 20% to 23% and make it permanent. This would reduce taxable income for dental practices structured as S corporations, partnerships, or sole proprietorships.
  2. Increased Standard Deduction and Child Tax Credit: The standard deduction would be temporarily increased by $1,000 for single filers and $2,000 for married couples. In addition, the Child Tax Credit would rise to $2,500 per child, offering additional relief for dental professionals with families.
  3. Adjusted SALT Deduction Cap: The state and local tax (SALT) deduction cap would increase from $10,000 to $30,000, phasing out gradually for incomes above $400,000. For homeowners, especially those whose property taxes exceed $10,000, this change could allow for significantly greater deductibility.
  4. Elimination of Taxes on Tips and Overtime Pay: The bill would exempt tip income and overtime pay from federal income taxes in certain industries. While not directly applicable to most dental practice owners, it could influence compensation structures for support staff.
  5. Extended Bonus Depreciation and Interest Deductions: The bill extends 100% bonus depreciation and allows amortization and depreciation to be included in interest deduction calculations through 2029, making capital investment in technology or equipment more financially viable.
  6. Changes to Personal Deductions: The proposal would make permanent several itemized deduction limitations (such as on mortgage interest and casualty losses), eliminate personal exemptions, and simplify deduction structures.
  7. Rollback of Clean Energy Incentives: Provisions from the Inflation Reduction Act would be scaled back or phased out. Dental practices considering green upgrades, like solar panels or energy-efficient systems, may need to reassess their cost-benefit analysis under a new tax environment.
  8. End of IRS Direct File Program: The legislation would terminate the current IRS Direct File system and replace it with a public-private partnership, returning most free filing options to private software providers.

Preparing Your Dental Practice

The proposed tax bill is still in its early stages, and no immediate action is required. However, staying informed now can help you respond effectively if the legislation advances in its current form. If the bill passes as written, dental practice owners may need to:

  • Reassess business structure: Changes to the Qualified Business Income (QBI) deduction could make it worthwhile to review whether your current entity type, such as an S corp or sole proprietorship, is still the best fit.
  • Revisit compensation strategies: While the elimination of taxes on tips and overtime pay may not directly apply to dental practices, it could influence how you approach payroll, especially for administrative and support staff.
  • Consider the timing of future investments, especially for equipment or sustainable upgrades that may lose tax advantages.
  • Reach out to us with questions: Once legislation is finalized, we can help you understand the full impact on both your business and personal finances and identify opportunities to optimize your tax strategy.

What’s Next?

The bill still needs to pass the full House and then move through the Senate, where key provisions could be revised or removed. In short, the final version could look significantly different. That said, with the 2017 tax cuts set to expire after 2025, action on tax legislation is expected before year-end.

For now, the best course of action is to stay informed and prepare to plan ahead should the bill advance. As with any proposed legislation, details remain in flux, and this particular bill seems to be evolving almost weekly. We will do our best to keep you informed as updates are made public and the bill continues its journey through Congress and, potentially, to the President’s desk for final approval later this year.

If it moves forward, we’ll be here to help you understand the specifics and make proactive decisions for your dental practice.

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.

BOI Filing for Dental Practice Owners: Our Attempt to Make Messy Timeline More Clear

If you’ve been trying to keep up with the Beneficial Ownership Information (BOI) reporting requirement, you’re not alone in feeling like it’s turned into a legal ping-pong match. Created to crack down on financial crimes, this new rule has become confusing, controversial, and as of now, unenforceable.

Here’s what dental practice owners need to know and what to do (or not do) next.

BOI Requirements: The Timeline That Just Won’t Quit

The Corporate Transparency Act (CTA) was passed in 2021, and it included new reporting requirements for small businesses, including most dental practices. But since then? It’s been chaos. Here’s a blow-by-blow:

  • January 1, 2024 – BOI reporting officially takes effect. New companies must file within 90 days of formation, and existing companies had to file by January 1, 2025.
  • December 3, 2024 – A Texas court issues a preliminary injunction, halting BOI enforcement nationwide and raising constitutional concerns.
  • December 5, 2024 – The federal government appeals the injunction, attempting to reinstate the rule.
  • December 23, 2024 – The Fifth Circuit Court briefly lifts the injunction, reinstating the January 1 deadline. FinCEN (the Treasury’s enforcement arm) responds by extending the filing deadline to January 13, 2025.
  • December 26, 2024 – The appeals court changes its mind again and reimposes the injunction, stopping enforcement once more. Oral arguments are scheduled for March 25, 2025.
  • January 4, 2025 – The Department of Justice files an emergency motion with the U.S. Supreme Court, asking it to lift the injunction and allow enforcement to resume. We now await the Court’s decision.
  • March 1, 2025 – A separate federal court rules the Corporate Transparency Act unconstitutional in National Small Business United v. Yellen. FinCEN announces it will not enforce BOI reporting against the plaintiffs in that case but keeps requirements in place for everyone else.
  • March 25, 2025 – IRS issues a memorandum clarifying that, due to legal uncertainty, BOI enforcement is paused pending further resolution. 

So, What Does This Mean for Dental Practice Owners?

The short version: You don’t have to file right now.

If you’ve already filed? No harm done, just sit tight.

If you haven’t? That’s fine too. The rule still exists on paper, but it’s tangled in legal challenges and is not being enforced at the moment.

But Will I Have to File Later?

Possibly. The Supreme Court could lift the injunction, or Congress could revise the law. But for now:

  • There are no penalties for not filing.
  • FinCEN cannot enforce the rule due to the ongoing legal battles.
  • Filing is on pause, not eliminated.

What Should You Do Right Now?

  • Don’t panic. No action is required at the moment.
  • Stay informed. This could change with little notice, and we will do our best to keep you informed.
  • Keep records ready. If enforcement resumes, filings may need to happen quickly.

Final Thought

We wish this were clearer, but welcome to regulatory whiplash. BOI reporting is either something you don’t have to do – or something you’ll need to do soon, once the courts make up their minds.

We’re watching this closely, and as soon as there’s a final answer, you’ll be the first to know.

Have questions about your practice structure or potential filing obligations? Reach out. We’re here to help you stay out of trouble and focused on your patients, not paperwork.