Home Resources Blog Dental Practice Owners Will Find Tax Advantages in ‘Beautiful’ Bill

Dental Practice Owners Will Find Tax Advantages in ‘Beautiful’ Bill

November 19, 2025

Permanent Tax Rates and Estate Tax Exclusion Will Benefit Individual Taxpayers

Owning a dental practice means making constant decisions about how to grow while keeping costs under control. Whether you are thinking about adding operatories, upgrading technology or remodeling your office, those choices often depend on how the tax rules affect your bottom line. The “One Big Beautiful Bill” (OBBB), signed into law on July 4, 2025, gives practice owners more certainty. It makes permanent several provisions that were about to expire and introduces new opportunities to plan ahead. From bonus depreciation on office improvements to expanded deductions for business income, the OBBB can help you invest in your practice with confidence.

Individual & Business Tax Provisions of the OBBB

Individual Tax Rates
One of the most significant advantages of the OBBB is that it prevented an increase in individual tax rates that could have affected many dentists and other higher earners. Under the Tax Cuts & Jobs Act (TCJA), tax rates for higher earners would have risen from 37% to 39.6% at the end of 2025. The OBBB preserves the 37% top rate and makes it permanent, indexed for inflation annually.
Standard Deduction
The significantly increased standard deduction that was created by the TCJA has enabled many taxpayers to simplify their tax returns by no longer itemizing. The OBBB makes the higher standard deduction permanent, and sets it at $15,750 for single taxpayers and $31,500 for married joint filers in 2025. The deduction will be indexed for inflation in future years.
100% Bonus Depreciation and Sec. 179 Deduction Limits
The OBBB’s restoration of 100% bonus depreciation and increased Sec. 179 deduction limits provides significant tax benefits to owners of pass-through entities. The TCJA provided 100% bonus depreciation, with a step-down of 20% per year starting in 2023. The step-down reached 40% in 2025. But with restoration of 100% bonus depreciation retroactive to Jan. 19, 2025, as provided by the bill, businesses that have already made capital expenditures in 2025 with the expectation of 40% bonus depreciation will reap an additional benefit.
179 allows businesses to deduct the cost of certain equipment immediately, rather than over time. Qualifying purchases include office furniture, computers and certain software, business machinery and certain vehicles such as cargo vans.
Under previous law, taxpayers were limited to claiming a maximum $1.25 million deduction under Sec. 179 on a single item, and a cumulative maximum of $3.13 million in a single tax year. The OBBB law raises those limits to $2.5 million and $4 million, respectively.
Expanded Value of Cost Segregation Studies
The restoration and permanence of 100% bonus depreciation enhances the value of cost segregation studies because the tax benefit is immediate and significant, especially for owners who bought buildings or are investing in large remodel projects this year. For instance, a cost segregation study on a building that was recently purchased for $4 million may identify $800,000 of building components that can be depreciated over five to 15 years, rather than the 39-year depreciation term of the building as a whole. With bonus depreciation, the owner can write off those building components in the first year, rather than stretching out the write-offs over five to 15 years. Cost segregation studies have always been valuable tools, but the return to 100% bonus depreciation has made them even more valuable.
Expansion of Qualified Business Income (QBI) Deduction
The QBI deduction (Sec. 199A) was created by the TCJA as a significant tax benefit for owners of pass-through entities. It allows eligible taxpayers to deduct up to 20% of their qualifying business income. Since dental practices are considered a specified service trade or business (SSTB) for Section 199A, phase-out income limits can reduce or eliminate this benefit. When the OBBB made the QBI deduction permanent, more importantly for a business that is considered to be SSTB, it expanded its accessibility as the law broadens the income levels at which taxpayers may receive the full 20% QBI deduction starting in 2026. For the 2026 tax year, the income threshold for the Section 199A deduction on specified service trade or business (SSTB) income will begin at $201,775for single filers and $403,550 for married couples filing jointly. The deduction is entirely eliminated for taxpayers with SSTB passthrough income with taxable income above $276,775 (single) nd $553,500 (married filing jointly).
Estate Planning
The OBBB brought taxpayers a comfort level with the permanence of the new estate tax exemption of $15 million per person (indexed for inflation), effective starting in 2026. The projected estate tax exemption for 2026, had OBBB not been enacted, would have been approximately $6–7 million per individual, depending on the final inflation calculation. For 2025, the exemption is $13.99 million per individual, but without OBBB, it would have dropped by more than half in 2026. Many dentists, especially those who own successful practices, real estate or other investments, can accumulate significant wealth over their careers. If the estate tax exemption had reverted to around $6–7 million in 2026, estates exceeding that amount would have been subject to federal estate tax at rates up to 40%. This could have resulted in a substantial tax bill for the heirs of dentists with estates above the lower threshold. With the certainty that this brings to the planning process, many people now feel comfortable doing the long-term planning and preparation that is necessary to craft an effective estate plan.
Cap and Limitations on State and Local Tax (SALT) Deduction
One of the most controversial provisions of the TCJA was a $10,000 cap on the amount of state and local taxes (SALT) taxpayers could deduct on their federal income tax returns. The OBBB temporarily raises the SALT deduction cap to $40,000, indexed to a 1% annual increase, beginning with the 2025 tax year. However, the more generous cap comes with limits. The $40,000 cap begins to phase out for taxpayers with adjusted gross income of more than $500,000, and the cap will revert to $10,000 in 2030.
Student Loan Payments by Employers
Employers may provide employees with undergraduate or graduate-level educational assistance, including payments toward their student loans, through their employee benefit plans. The option to use educational assistance programs for student loans was set to expire at the end of 2025. However, the OBBB permanently extends this student loan payment option. Additionally, tax-free benefits under any educational assistance program are limited to $5,250 per employee per year. Typically, educational assistance provided above this level is taxable as wages. Beginning in 2027, the OBBB annually indexes the $5,250 limit for inflation.