Practice-owner operating expenses
Start with ordinary costs tied directly to running the practice. The ledger should make clinical supplies, lab fees, merchant processing, software, insurance, rent, utilities, professional fees and staff costs easy to trace to source documents.
- Clinical supplies and lab invoices
- Practice-management and imaging software
- Business insurance and professional fees
- Payroll, benefits and employer taxes
Equipment, improvements and financing
A scanner, chair or buildout is not automatically treated like a box of gloves. Preserve invoices, placed-in-service dates, financing documents and the distinction between equipment, repairs and leasehold improvements so the current-year depreciation analysis starts with reliable facts.
- Invoice and placed-in-service support
- Equipment versus repair classification
- Interest separated from principal
- Disposal records for replaced assets
Owner travel, vehicle, education and home office
These categories often fail because the business purpose is vague or the contemporaneous record is missing. Keep mileage and travel logs, agendas, receipts and a short note connecting continuing education to the dental business. A home-office claim has separate qualification rules and should be reviewed from the facts.
- Mileage or actual-cost records, not both without analysis
- Business purpose for travel and meals
- Course agenda and payment support
- Exclusive-use facts for a home office
W-2 associates: use reimbursement, not owner rules
A W-2 associate should not put licensing, continuing education, loupes or other employee costs on a Schedule C merely because the cost relates to dentistry. Ask the employer about an accountable reimbursement arrangement and have unreimbursed costs reviewed under the rules that apply to the associate’s return.
- Keep employee and side-business activity separate
- Request a written reimbursement policy
- Do not invent self-employment activity to create deductions
- Review any legitimate 1099 activity independently
Questions owners ask
Can a W-2 dentist deduct unreimbursed employee expenses on Schedule C?
No. Schedule C is for a genuine trade or business, not ordinary costs of being a W-2 employee. Ask about accountable reimbursement and review your full facts with a tax professional.
Can a dental practice deduct new equipment immediately?
The answer depends on the asset, placed-in-service date, current depreciation rules and the practice’s facts. Preserve the invoice and financing details for a current-year analysis.
What records should a dentist keep for deductions?
Keep invoices, receipts, payment evidence, mileage or travel logs, business-purpose notes and asset records that connect the cost to the dental business.
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