For a dental practice owner, many of the decisions that shape your 2026 tax bill have a December 31 deadline, not an April one. By the time your return is prepared, the window for those moves has already closed. Year-end tax planning for dentists means sorting what must happen before the calendar turns from what can wait until you file.
This checklist covers both, using the 2026 figures the IRS has published. It is about timing. For a refresher on which expenses qualify in the first place, start with our guide to the dental practice tax deductions owners miss.
Why Year-End Tax Planning for Dentists Starts in October
Several of the rules that matter most at year-end are tied to dates, and each one needs lead time. Equipment has to be installed and ready to use. Payroll changes need at least one pay cycle to take effect. A new retirement plan needs a provider and paperwork before it can accept a dollar. Starting in October or November leaves room to act on what you decide.
Here is how the main items sort out:
- Must happen by December 31, 2026: equipment placed in service, salary deferrals run through payroll, S-Corp owner salary finalized in the last payroll, and deductible bills paid if you use the cash method.
- Can wait until your business return is due, including extensions: setting up and funding a SEP, adopting a new plan for employer contributions, and paying profit-sharing contributions.
- Due in January: the fourth 2026 estimated tax payment, due January 15, 2027.
Equipment: “Placed in Service” Is the Date That Counts
Buying equipment before year-end is the classic December move. The rule that trips people up is timing. The IRS says property is placed in service when it is ready and available for a specific use. The example in IRS Publication 946 is a machine delivered last year but not installed and operational until this year. It is placed in service this year.
Apply that to a practice. An intraoral scanner or CBCT unit that arrives December 22 but is not installed and working until January 6 is a 2027 asset for depreciation. Ordering it, paying a deposit, or signing the financing in December does not change that. Ask your vendor for a realistic delivery and installation date before you count on a 2026 deduction.
The 2026 rules are more generous than many owners expect:
- Bonus depreciation. The 2025 tax law known as the One, Big, Beautiful Bill made the 100% first-year depreciation deduction permanent. It applies to qualified property acquired after January 19, 2025, according to IRS guidance on Notice 2026-11. If you have read that bonus depreciation was stepping down each year, that schedule was replaced for property acquired after that date.
- Section 179. For tax years beginning in 2026, the Section 179 limit is $2,560,000. It shrinks dollar for dollar once the cost of Section 179 property placed in service during the year passes $4,090,000, per Rev. Proc. 2025-32.
Two details are worth raising with your accountant. First, the Section 179 deduction cannot exceed your taxable income from actively conducting a business. Any amount above that carries forward to the next year, per Publication 946. Second, bonus depreciation applies automatically unless you elect out. The mix of Section 179, bonus depreciation, and regular depreciation is worth modeling before you file. State treatment can also differ from federal rules, so ask how Virginia handles the purchase.
One more point. A deduction lowers your tax at your marginal rate; it does not refund the purchase price. Equipment should earn its place in the operatory on its own merits, with the tax treatment as a secondary benefit.
Retirement Plans: Which Deadlines Fall on December 31
Retirement contributions are one of the largest planning levers a practice owner has, and the deadlines depend on the type of contribution. Getting the order wrong can cost you a year.
Salary deferrals are a December 31 item. A 401(k) arrangement has to be in place before pay is deferred. Retroactive deferrals are generally not allowed, as the IRS explains in its issue snapshot on plans adopted after year-end. If you want 2026 deferrals, whether through a new plan or a higher election in an existing one, they have to run through 2026 payroll.
For 2026, the employee deferral limit is $24,500. If the plan allows, participants age 50 or older can add an $8,000 catch-up, and those aged 60 through 63 can use a higher $11,250 catch-up instead. Total annual additions to one person’s account in an employer’s plans, including employer contributions, are capped at $72,000 before catch-ups, or 100% of compensation if that is less. All of these figures come from the IRS 401(k) contribution limits page.
Some contributions can wait. An employer can adopt a new retirement plan after year-end and treat it as adopted on the last day of the prior year. The deadline is the due date of its tax return, including extensions. Profit-sharing contributions paid by that extended due date can still be deducted for the prior year. A SEP can be set up and funded as late as the return’s due date, including extensions, according to the IRS SEP FAQs.
There is a narrow exception for the sole owner of an unincorporated business with no employees. That owner can adopt a new 401(k) after year-end and make first-year deferrals until the return’s due date, not counting extensions. Matching contributions work differently. They are tied to deferrals, so they cannot be based on pay earned after the year ends.
Practices with staff also face coverage and testing rules. That is why plan design is a conversation to have now, with your accountant and plan provider, instead of in March.
Owner Pay, Payroll, and Cash-Basis Timing
If your practice has elected S-Corp status, your 2026 W-2 salary is whatever runs through payroll by December 31. That salary needs to be reasonable for the work you do, a point we cover in our comparison of S-Corp vs LLC for dental practices. Your salary level can also interact with retirement contributions and the QBI deduction covered below, so review it before the final payroll of the year.
For practices on the cash method, you generally deduct expenses in the year you actually pay them, according to IRS Publication 538. Paying a December invoice in December, instead of January, can move that deduction into 2026. Prepaying future expenses is a different matter. An advance payment is generally deductible only in the year it applies to, unless it fits the IRS 12-month rule. Check before you prepay rent or a service contract.
Finally, put the fourth 2026 estimated tax payment on the calendar. It is due January 15, 2027, per the 2026 Form 1040-ES. A December projection tells you whether that payment should be larger or smaller than planned. Our post on quarterly estimated taxes for dental practices explains how the payments work.
Check Where Your Income Lands for the QBI Deduction
If your practice is an S-Corp, partnership, or sole proprietorship, you may qualify for the qualified business income (QBI) deduction. For this purpose, a dental practice is generally a specified service trade or business. The Form 8995-A instructions list dentists by name under the field of health. For these businesses, the deduction phases out as taxable income rises past a threshold. Above the top of the phase-in range, it is generally unavailable.
For 2026, the threshold is $201,750 for most filers and $403,500 for married couples filing jointly. The phase-in range ends at $276,750 and $553,500, respectively, per Rev. Proc. 2025-32.
If your projected income sits near one of those numbers, the year-end items above matter twice. Deductible retirement contributions and the timing of deductible expenses both change taxable income, which can change how much of the QBI deduction you keep.
Book Your Year-End Review Before December
A year-end planning meeting is only as good as the numbers you bring to it. Pull together the following before you sit down:
- A year-to-date profit and loss statement
- Your payroll register, including owner salary
- Equipment quotes with expected delivery and installation dates
- Your current retirement plan documents, if you have a plan
- Last year’s business and personal returns
With those in hand, your accountant can project 2026 and show which of these decisions are worth making for your practice. The earlier that happens, the more of this year-end tax planning checklist is still on the table.
Quantum Accounting & Tax works with dental practices across Virginia on tax planning and preparation. If you want to walk through your year-end decisions while there is still time to act on them, contact our team to schedule a year-end planning conversation.
This article is general information about federal tax rules for the 2026 tax year. It is not tax advice for your situation. Limits change, and how the rules apply depends on your facts.
