October 30, 2023

Continuing Compliance for Dental Practices

If you’ve already filed your Beneficial Ownership Information (BOI) report, it’s important to stay informed about other tax considerations that could impact your dental practice in 2024. Learn more about potential tax changes, including deductions and investment strategies, and discover how Engage Advisors can help you navigate these adjustments to protect your practice’s profitability.

Potential Tax Changes and Possible Impacts on Dentists

With potential tax deductions changes for small businesses on the horizon, dentists may need to adapt their financial strategies to stay competitive. Here, we cover key potential tax adjustments and provide steps dentists can take to protect profits and maintain practice value.

Understanding the Potential Expiration of the 20% Pass-Through Deduction

Dentists organized as pass-through entities (such as S-corps or partnerships) may lose the 20% deduction on qualified business income, a policy that has made reinvestment in growth easier for small businesses. Losing this could result in a higher tax burden, affecting cash flow and limiting reinvestment opportunities for dental practices.

Preparing for the Loss of Full Expensing on New Equipment

The current policy allows immediate expensing of large purchases—such as advanced imaging tools or software. If phased out, practices would revert to depreciating equipment over time, limiting immediate tax relief. This change may slow upgrades and restrict growth, particularly in a market where technological advancement is crucial.

Steps Dentists Can Take Now

  • Optimize Cash Flow with Strategic Investments: Evaluate essential equipment or technology purchases that qualify for current tax benefits to keep your practice efficient and updated.
  • Reassess Your Business Structure: Conduct a tax-focused evaluation to determine if a business structure change could optimize for upcoming tax landscapes.
  • Explore Financing Options: Financial planning services or financing options can support strategic investments without straining the practice’s liquidity.

For dentists, proactive tax planning can be crucial in maintaining profitability and a competitive edge. At Engage Advisors, we help dental professionals navigate these changes and build strategies for a secure financial future. Contact us for a consultation to discuss your options for 2024.

Source: ADA News