Navigating Tax Season for Dental Owners & Associates

By: Todd Doobrow, CFP

Tax season can be a stressful time for both dental owners and associates. However, with careful planning and strategic decision-making, you can significantly reduce your tax burden and keep more of your hard-earned money in your pocket.

4 Ways to Lower Your Taxes & Improve Your Financial Situation

Here are four proven actions you can take to lower your taxes and help improve your financial situation.

1. Maximize Retirement Contributions

One of the most effective ways to lower your taxes is by maximizing your contributions to retirement accounts such as:

  • 401(k)s
  • IRAs
  • Self-employed retirement plans like SEP-IRAs or Solo 401(k)s

Contributions to these accounts are typically tax-deductible, meaning they reduce your taxable income for the year in which you make the contribution.

For Example: If you contribute $10,000 to your traditional 401(k) and you’re in the 25% tax bracket, you could potentially save $2,500 in taxes. Additionally, these retirement accounts offer tax-deferred growth, allowing your investments to grow tax-free until you withdraw them in retirement, further maximizing your savings potential.

It’s important to note that contribution limits apply to each type of retirement account, and practices can benefit from plan reviews every three to five years to make sure the plan selected is still the best option for the dentist and your teammates.

2. Take Advantage of Tax Credits

Tax credits are powerful tools for lowering your tax bill as they provide a dollar-for-dollar reduction in the amount of taxes you owe.

There are numerous tax credits available, covering a wide range of expenses such as:

  • Education
  • Childcare
  • In-house manufacturing
  • Healthcare costs

Two common credits we see used often are the:

  1. American Opportunity Tax Credit
  2. Lifetime Learning Credit

These can help offset the cost of higher education expenses, while the Child and Dependent Care Credit provides relief for childcare expenses incurred while you work or attend school.

Researching and understanding the various tax credits available to you can lead to substantial savings come tax time, so be sure to explore all options and take advantage of any credits for which you qualify.

3. Utilize Tax-Advantaged Investment Accounts

In addition to retirement accounts, there are other tax-advantaged investment vehicles that can help lower your taxes and grow your wealth over time.

Health Savings Account

One such example is the Health Savings Account (HSA), available to individuals with high-deductible health plans.

HSAs are industry “unicorns,” they offer triple tax benefits:

  1. Contributions are tax-deductible
  2. Earnings grow tax-free
  3. Withdrawals for qualified medical expenses are tax-free

By contributing to an HSA, you can lower your taxable income while building a fund to cover future healthcare costs.

529 Plan

Another tax-advantaged investment account is the 529 plan, which is designed to help families save for education expenses.

Contributions to a 529 plan are not federally tax-deductible, but earnings grow tax-free, and withdrawals used for qualified education expenses are also tax-free. This can provide significant savings for parents planning for their children’s future education.

By strategically utilizing tax-advantaged investment accounts, you can minimize your tax liability while simultaneously working towards your long-term financial goals.

4. Harvest Tax Losses and Optimize Capital Gains

Tax-loss harvesting involves selling investments that have experienced a loss in value to offset capital gains and reduce your tax liability. By selling losing investments, you can use those losses to offset capital gains realized elsewhere in your portfolio, thereby reducing your overall taxable income.

Additionally, by carefully timing the sale of investments, you can take advantage of lower long-term capital gains tax rates, which are typically more favorable than short-term capital gains rates.

Long-term capital gains tax rates apply to investments held for more than one year, while short-term capital gains tax rates apply to investments held for one year or less.

By strategically managing your investment portfolio and taking advantage of tax-loss harvesting and optimal capital gains timing, you can minimize your tax burden and maximize your after-tax investment returns.

In Conclusion

As a dentist, hygienist, or administrative team member, we know just how hard you work for your money.

Taking any of these steps, along with many others that are out there, will help you keep more of that money in your pocket.

As always, feel free to reach out to us at, or, with questions or feedback.

Happy tax day!

Todd Doobrow, CFP

Todd Doobrow, CFP

Todd Doobrow is an independent Certified Financial Planner® fiduciary and founder of Curato Advisory, who has worked with dental and medical professionals, and their teams, for more than a decade. Not only does he see the life of a dentist first-hand as his wife practices Periodontics and Implant dentistry, but he has entrenched himself in his clients’ practices with a voracious focus on financial efficiency. He can be reached at or 205.778.2020.