Tax Planning for Dental Practice Owners

Dental practice owners sit at the intersection of several tax questions at once: entity structure, self-employment tax, the qualified business income deduction, retirement contribution capacity and practice real estate. Each interacts with the others, and each depends on the dentist's individual facts.

A return records the outcome; planning decides the outcome, which is the difference between filing well and owning well.

Common structures include sole proprietorships, partnerships, LLCs and professional corporations, often taxed as S corporations for the payroll and self-employment tax savings they can offer eligible owners. The right structure depends on state law, the number of owners and the practice's economics.

There is no universal answer, which is why the structure is reviewed whenever the practice changes: a new partner, a new building, or a new location.

Whether a dentist might qualify for the qualified business income deduction depends on the structure, income level and applicable law, analyzed on the practice's own facts.

Retirement contributions, health benefits, equipment purchases and real estate decisions all move between the practice and the owner's personal tax picture. Pagac coordinates them so one decision does not undo another.

Plans are reviewed before year-end while contributions and purchases can still be made, and state considerations are handled for Michigan and any other states involved.