Tax planning is becoming increasingly important for dental practices across Washington heading into 2026. According to data from the American Dental Association, overhead for many dental practices often ranges between 70 and 75 percent of total revenue. This reality makes proactive tax strategy a key part of long-term financial health, not just a year-end task.
Dentist tax strategy goes beyond basic compliance. Proper use of deductions can free up capital for equipment upgrades, service expansion, and staff support while improving cash flow throughout the year. With federal updates and Washington-specific considerations affecting the 2026 tax year, early planning helps dentists avoid missed opportunities and unnecessary exposure.
Let’s break down the key areas Washington dental practice owners should review to maximize their tax deductions and support their future.
Common Tax Deductions for Dentists
Dental practices have unique operational needs, and many related costs may be deductible when documented properly. Working with a dental CPA firm can help identify eligible deductions while keeping records aligned with current tax requirements and reporting standards.
Dental Equipment Purchases and Depreciation
Major equipment purchases are often among the largest deductions available to dental practices. Common examples include:
- Dental chairs and delivery systems
- Digital imaging and X-ray equipment
- Intraoral scanners and CAD/CAM tools
These assets may qualify for depreciation under current federal rules. Depending on timing and eligibility, practices may benefit from Section 179 expensing or bonus depreciation options available in 2026. Since depreciation rules will shift again in 2026, proactive planning is key.
Supplies and Disposable Materials
Clinical supplies represent another common tax deduction category. Items such as gloves, masks, bibs, impression materials, and infection control products are generally considered ordinary and necessary business expenses. Maintaining detailed purchase records throughout the year supports accurate reporting and substantiation.
Continuing Education and Professional Development
Continuing education is required to maintain licensure and clinical standards. Costs related to seminars, workshops, board exams, professional memberships, and dental journal subscriptions are commonly deductible. Related travel expenses may also qualify when the program directly supports your dental practice.
Software, Technology, and Digital Dentistry Tools
Technology continues to play a growing role in modern dentistry. Expenses for practice management software, digital imaging systems, patient communication platforms, and cloud-based tools are often deductible. A dental tax specialist will help determine which technology expenses qualify and how to categorize them as part of a broader dental tax strategy.
Facility & Operational Deductions
The physical space and daily operations of a dental practice generate significant deductible expenses. These costs are sometimes overlooked or inconsistently tracked, yet they play a major role in managing dental taxes and maintaining profitability.
Lease or Mortgage Interest
Lease payments for rented office space are generally deductible as business expenses. For practice owners who own their building, interest paid on business-related mortgages may be deductible each year.
Utilities and Maintenance
Common deductible operational expenses include:
- Electricity, water, and gas
- Internet and phone services
- Janitorial services and routine repairs
- Safety-related improvements, such as HVAC or air purification upgrades
These expenses are typically deductible when they support ongoing practice operations.
Waiting Room Upgrades, Compliance, and Renovations
Improvements made to enhance patient comfort or meet health or ADA standards may be deductible when used for business purposes. Larger renovation projects are often recovered through depreciation rather than expensed in a single year.
Marketing, Website Upkeep, and Advertising Expenses
Maintaining visibility is an important part of running a dental practice. Expenses related to local advertising, website hosting, SEO efforts, branding, and patient outreach are typically deductible operating costs when properly documented.
Staff-Related Deductions
Staffing is one of the largest ongoing expenses for dental practices. Many employee-related costs may be deductible when they directly support business operations.
Wages, Benefits, and Payroll Taxes
Wages paid to dental specialists and support staff are generally deductible business expenses. In addition, employer-paid payroll taxes, health insurance contributions, retirement plan matching contributions, and other qualified benefits may also qualify.
Training and Continuing Staff Education
Ongoing training helps dental teams stay current with technology, safety protocols, and patient care standards. Expenses related to training programs, continuing education courses, certifications, and required seminars may qualify as deductible costs when they relate directly to job duties.
Uniforms and Personal Protective Equipment
Uniforms required for work and not suitable for everyday use are commonly deductible. This includes scrubs, lab coats, PPE, and branded apparel worn by staff during normal practice operations.
Vehicle and Travel Deductions
Vehicle and travel expenses related to running a dental practice may be deductible when they serve a clear business purpose. These deductions require careful documentation, particularly when personal and business use overlap.
Mileage for Business-Related Travel
Business-related travel may include trips to dental suppliers, laboratories, continuing education events, or practice-related meetings. Dentists may deduct mileage using the IRS standard mileage rate in effect for the tax year or by tracking actual vehicle expenses, depending on which method is more appropriate.
Conferences, Seminars, and Outreach Programs
Travel expenses associated with qualifying conferences, seminars, or patient outreach programs may be deductible. Deductible costs can include transportation, lodging, and registration fees.
When trips include personal activities, only the business-related portion may be claimed.
Washington-Specific Considerations
Dentists practicing in Washington face tax considerations which differ from those in many other states. While Washington does not impose a personal income tax, dental practices remain subject to state and local requirements.
Washington’s Business and Occupation tax applies to gross receipts rather than net income. Because deductions are limited under this structure, accurate revenue tracking is especially important. A dental tax specialist can help practices confirm proper classification and account for allowable credits.
From time to time, Washington offers incentive programs related to energy efficiency, equipment upgrades, or workplace improvements. Eligibility varies, and regular review is recommended.
2026 Tax Updates: Key Areas for Dental Practices
Several federal tax and regulatory updates taking effect in 2026 may affect how dental practices plan for deductions and long-term strategy. These include permanent changes to the Qualified Business Income deduction, expanded depreciation options for equipment purchases, and updates to SALT and estate planning thresholds.
Because these updates interact with both federal and Washington-specific rules, reviewing them with a local dentist tax specialist is recommended before making planning decisions.
Why a Dental CPA Matters
Dentist taxes involve rules which differ from those affecting many other small businesses. A dental CPA firm understands industry-specific deductions and how to apply them accurately across equipment, staffing, and operational expenses.
Dental practices may also face higher audit risk due to larger equipment purchases and recurring supply costs. A dental tax specialist will structure documentation and reporting methods which reduce errors and support compliance.
In addition, a dental CPA can streamline bookkeeping and quarterly estimated tax filings, helping practices maintain steady cash flow throughout the year. Long-term planning support is also critical for dentists considering expansion, ownership transitions, or retirement.
Schedule a Consultation with PorterKinney, PC
Dentist taxes are complex, and small missteps can lead to missed opportunities or increased risk. Proactive planning allows practices to adapt, invest strategically, and maintain financial stability in a competitive healthcare environment.
Want to identify overlooked deductions and reduce audit risk before the 2026 tax year? Schedule a consultation with PorterKinney, PC, and work with dental CPAs who understand the financial needs of Washington dental practices.
