As 2025 heads into its final quarter, it’s important for dental and healthcare practice owners to pay attention to several tax provisions recently extended under the One, Big, Beautiful Bill Act (OBBBA). While many of these updates create favorable opportunities, some may also affect overall tax liabilities. Understanding how these provisions apply to your practice is key to effective year-end planning.
Below are eight significant provisions you should know about and how they may impact your financial strategy:
1. Qualified Business Income (QBI) Deduction
The Section 199A QBI deduction has been made permanent under OBBBA, providing ongoing tax relief for owners of pass-through entities such as dental practices structured as partnerships, LLCs, or S corporations.
Key updates include:
- Expanded phase-in ranges for service businesses (like dental and medical practices).
- New thresholds: $75,000 for individuals and $150,000 for joint filers.
- A minimum $400 deduction (adjusted for inflation) for taxpayers with at least $1,000 of qualifying business income.
This change ensures that practice owners continue to benefit from significant tax savings when structured properly.
2. 100% Bonus Depreciation
For practice owners investing in new or used equipment whether it’s dental chairs, imaging technology, or medical devices, this is a big win. OBBBA permanently allows 100% bonus depreciation for qualified assets placed into service after January 19, 2025.
Additionally:
- Section 179 expensing limits increase to $2.5 million (with a $4 million phaseout).
- These limits will adjust annually for inflation.
This provision makes it easier for dentists and healthcare professionals to modernize their practices with advanced technology while receiving immediate tax benefits.
3. Research and Experimentation (R&E) Expenses
For practices involved in innovation, such as developing new dental materials, testing medical techniques, or investing in healthcare technology, OBBBA reinstates the ability to deduct R&E costs in the year they are incurred.
- Small practices (with gross receipts under $31 million) can apply this retroactively back to 2022.
- Practices with past R&E expenses from 2022–2024 may accelerate deductions over one or two years.
This change may be especially beneficial for specialists or group practices investing in clinical research.
4. Clean Energy Incentives
Some clean energy tax credits from previous legislation are being phased out, including credits for electric vehicles, refueling stations, and energy-efficient building upgrades.
If your practice has been considering energy-efficient improvements, it’s important to review which credits may no longer be available after these accelerated phaseouts.
5. Qualified Opportunity Zones (QOZs)
For dental and healthcare professionals considering real estate investments, the QOZ program has been extended and enhanced. This program allows taxpayers to defer or reduce capital gains when reinvesting in designated low-income communities.
New updates include:
- Additional step-up in basis benefits based on holding period.
- A new category of funds focused on rural communities, which receive triple the step-up.
This may be particularly relevant if you’re expanding your practice footprint into underserved areas.
6. International Tax Provisions
While less relevant for most small healthcare practices, larger medical groups with international ties should note that OBBBA permanently extends deductions related to foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI), while increasing the BEAT tax rate to 10.5%.
7. Employer Tax Benefits
OBBBA brings favorable updates for practices with employees, including:
- Permanent tax-free treatment of employer-paid student loan repayments (up to $5,250 annually, inflation-adjusted after 2026).
- Increased child care credits for employer-provided programs (40–50% of expenses, depending on business size).
- A permanent extension of the employer credit for paid family and medical leave (FML), including coverage for insurance premiums.
These provisions can enhance recruitment and retention for practices competing for top dental and healthcare talent.
8. Employee Retention Tax Credit (ERTC) Claims
If your practice filed an ERTC claim after January 31, 2024, refunds may be delayed or denied under the new law. OBBBA also gives the IRS up to six years to audit these claims
What This Means for Your Practice
Unlike the sweeping changes of the Tax Cuts and Jobs Act (TCJA), the OBBBA primarily extends and refines existing tax provisions. Still, these adjustments could significantly affect year-end planning for dental and healthcare professionals.
Our team is closely monitoring IRS guidance to ensure you have the most up-to-date strategies for minimizing tax liability and maximizing benefits. Now is the time to review your practice’s tax strategy for 2025 and beyond. Reach out today for a consultation!