Accounting, tax, and advisory for dental practices.
A dental practice is a capital-intensive business with insurance-driven revenue, a large clinical payroll, and equipment that turns over on its own schedule. We provide bookkeeping, tax planning, payroll, and accounting advisory to dentists across the country, structured around how a practice actually earns and spends.
Who we work with
We work with dentists at several stages of practice ownership. The questions differ at each stage, and so does the work.
- General practice owners with one location or several, who want current financials and tax planning that is completed before the year closes.
- Dentists starting or buying a practice, from evaluating a seller's financials and allocating the purchase price to setting up the books, payroll, and entity correctly in the first year.
- Multi-location groups and emerging DSOs, where consolidated reporting, location-level profitability, and payroll across entities or states become the central accounting questions.
- Orthodontists and oral surgeons, whose practices carry their own economics. We cover that work on our specialty dental page.
How a dental practice differs from other small businesses
Dental revenue is recorded at the point of production but collected weeks later, and often only in part. PPO write-offs, insurance claim timing, and patient balances mean that production and collections rarely match in any given month.
Costs follow their own patterns as well. Lab fees and clinical supplies move with case volume, hygiene and assistant payroll is usually the largest single expense, and imaging, chairs, and practice software are replaced or financed on multi-year cycles. Many owners also carry a practice acquisition loan alongside personal education debt. We build the books so that each of these items is visible on its own, and we plan taxes with the equipment schedule and loan payments in view.
What we do for dental practices
Bookkeeping & Monthly Reporting
Monthly books kept in QuickBooks Online or whichever accounting system your practice already uses, and reconciled against the production and collections reports from your practice management system, including Dentrix and Open Dental.
Where the books have fallen several months behind, we bring them current before regular work begins. This is more common than many owners expect, and it can be resolved.
Tax Planning & Preparation
Business and personal returns prepared together, with planning conversations during the year rather than only at filing. That includes entity and S corporation questions, a reasonable salary for the owner-dentist, retirement plan design, quarterly estimates, and the timing of equipment purchases under Section 179 and bonus depreciation.
Payroll
Payroll for dentists, hygienists, assistants, and front office staff, including tax filings and deposits, W-2 and 1099 preparation, and new-hire compliance.
Accounting Advisory
Ownership decisions in a dental practice carry tax consequences that last well beyond the transaction itself. We review the figures before you commit and explain how each choice will be taxed. The questions below are the ones dentists most often bring to us.
What should I review before buying a practice?
We review the seller's financial statements and tax returns, examine collections trends and payer mix, and explain how the purchase price allocation, reported on IRS Form 8594, will affect your taxes for years afterward. Amounts assigned to equipment can often be deducted quickly, while goodwill is generally amortized over 15 years.
What does selling a practice involve?
We help you prepare the financial records a buyer and lender will request, and we explain how the allocation of the price will be taxed on your side of the transaction. Gain on equipment is often taxed as ordinary income through depreciation recapture, while goodwill is generally taxed as a capital gain, so the allocation matters to the seller as much as it does to the buyer.
How do buy-ins and partner buyouts work?
An associate buy-in or a partner buyout involves a valuation, a decision about how much of the price is assigned to equipment and to goodwill, and a payment structure that is often spread over several years. We review the valuation and the underlying records and explain the tax consequences for each party before anything is signed. The same review applies when you are considering a second location.
Do orthodontic and oral surgery practices need anything different?
Specialty practices share the financial foundation described above, with considerations of their own. Treatment contracts are collected over many months, billing runs through medical as well as dental insurance, equipment investments are larger, and associates are often hired with a path to ownership in view. For these practices we provide a one-time tax and structure review, monthly advisory, and support through buy-ins, partner buyouts, and sales.
Common questions from dentists
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Do you work with dentists outside Georgia?
Yes. The Tooth CPA is based in Woodstock, Georgia, and works with dental practices throughout the United States. Document exchange, meetings, and signatures are handled remotely, and we prepare returns for other states as well as Georgia. -
Should my dental practice be taxed as an S corporation?
Often, once the practice's profit is well above what a reasonable salary for the owner-dentist would be. An S corporation allows profit above that salary to be paid as distributions, which are not subject to Social Security and Medicare tax. The salary must be defensible for a dentist in your market and role, and the election adds payroll and a separate return. Whether it helps depends on your profit, your state, and your retirement plan, so we model it with your numbers before recommending it. -
What should I review before buying a dental practice?
At a minimum, three or more years of financial statements and tax returns, monthly collections compared with production, payer mix and PPO participation, the age of the equipment, and the lease. The purchase price allocation, reported on IRS Form 8594, also matters a great deal. Amounts assigned to equipment can often be deducted quickly, while goodwill is generally amortized over 15 years under Section 197. -
How is dental equipment treated for tax purposes?
Qualifying equipment can often be deducted in the year it is placed in service through Section 179 expensing or bonus depreciation, rather than depreciated over several years. The right approach depends on your income that year, your state, and whether the equipment is financed. Georgia, for example, does not follow federal bonus depreciation, so the Georgia deduction can differ from the federal one. -
Why do my production and collections numbers not match?
Production is the value of treatment performed at your fee schedule. Collections are what is actually received after insurance adjustments, PPO write-offs, and unpaid patient balances. A consistent gap is normal, but a widening one usually points to insurance, billing, or accounts receivable issues worth reviewing. -
Which accounting and practice management software do you work with?
We work in QuickBooks Online or whichever accounting system your practice already uses, and we reconcile the books against the production, collections, and adjustment reports from practice management systems such as Dentrix and Open Dental. -
Our books are several months behind. Can we still start?
Yes. This is more common among busy practices than many owners expect. We bring the books current first, reconciling each month against the bank and the practice management reports, and then begin regular monthly work from there. -
Do you work with orthodontists and oral surgeons?
Yes. Specialty practices have their own equipment, associate, and transition questions, which we describe on our specialty dental page.
Let us take a look at your practice.
Share a few details about your practice and the areas where you would like assistance. We usually reply within one business day to arrange a time to talk.