No amount of Novocaine can make paying taxes painless. The American Dental Association says the average dentist who owns all or part of her practice earns over $190,000 a year. That puts her, as of 2013, in the 28 or 33 percent tax bracket, depending on her filing status. The more tax write-offs she can take, the better.
If you have to replace your dental chair or buy a new, superior X-ray machine, you can write the cost off on taxes using the "section 179" deduction rules. You can deduct the cost of up to $500,000 in equipment purchases, as of 2013 -- not just dental equipment but desks, couches for the waiting room, file cabinets and computers. If you spend more than the limit, you can depreciate the added expense in future years. You have to depreciate any of the cost that's more than this year's income.
Training for a new career isn't deductible, so you can't write off the cost of dental school. Once you're in the biz, though, you can deduct the cost of any seminars or courses you take to meet state licensing requirements or to improve your skills. The cost includes class costs, supplies, fees course materials and the cost of travel from your office or home to the school. If you drive, you take the standard business-mileage deduction, which is 56.5 cents per mile as of 2013.
Few dentists go it completely alone. When you employ dental hygienists, office managers or anyone else, you can write off the cost of paying them. That includes not only their salary but commissions, bonuses, health insurance and fringe benefits. If you reimburse them for money they spend buying stuff for the office, that's deductible too. Employee expenses must be reasonable to be deductible -- if they get excessive pay for the work they do, the IRS can disallow the deduction.
If you own your office building, you can deduct property taxes, mortgage interest and mortgage interest premiums as a business expense. You also get to depreciate the building over the years, giving you a write-off every year you own it. If you rent space, the rent payment is deductible, as are utilities. If part of your home is dedicated to your business -- you do all your office work there, for instance -- you can take a home-office write-off as well.
- American Dental Association: What Is a Dentist's Average Net Income?
- Bankrate: Tax Brackets
- Feeley & Driscoll: Enhanced IRC Section 179 and 50 Percent Bonus Depreciation Extended Through 2013
- IRS: Business Deduction for Work-Related Education
- IRS: Employees' Pay
- Dental Economics: Advanced Tax Planning for Dental Office Buildings
- IRS: Deducting Business Expenses
- Nolo: Deducting Uniforms and Work Clothes
A Durham, NC resident, Fraser has written about law, starting a business, balancing your budget and fighting evictions, among other legal and financial topics.