by Sheri Pan, CFP®, CEO and Founder at Pantheon Wealth Planning
As a dental professional, you’re trained to detect small issues before they turn into major problems. The same is true in financial planning. With the recent passage of the One Big Beautiful Bill Act, a sweeping piece of federal legislation, dentists may face both new opportunities and potential challenges when it comes to managing taxes, retirement, and legacy planning.
While much of the political debate has focused on broader implications, let’s zoom in on how this legislation may impact you— here are the top 5 opportunities and strategies to consider:
1. Maximize T Deduction Before It Phases Out
What Changed: The state and local tax (SALT) deduction cap temporarily increased from $10,000 to $40,000 in 2025, and then rising annually till 2029. Reverts to $10,000 in 2030.
Phase-Out: Begins once your AGI exceeds $500,000.
Strategy: Consider set up retirement plans for your business to reduce your AGI and preserve more of your SALT deduction. This can also build retirement savings efficiently.
Example: Dr. Patel reduced her AGI by $80,000 through a defined benefit plan, keeping her below the phase-out threshold and maximizing her $40,000 SALT deduction.
2. PTE Tax Strategy for Dental Practice Owners making over SALT threshold
The Pass-Through Entity (PTE) Tax Election is a workaround strategy that allows owners of pass-through businesses (like S-corps, partnerships, or LLCs) to deduct state income taxes at the entity level, bypassing the federal SALT deduction cap for individuals.
Under the BBB Act, the SALT cap is still in place ($40,000, with phase-out starting at $500,000 AGI), so this strategy is especially helpful for dentists in high-tax states like California.
Strategy: If eligible, your S-Corp, LLC, or partnership pays state income tax on your share of profits, and that amount is fully deductible on the entity’s federal tax return. This lowers the business’s taxable income and reduces your federal personal income tax, even if your AGI exceeds the new SALT phase-out threshold.
Example: Dr. Laura owns a successful dental group in California structured as an S-Corp. Her state income tax liability on pass-through income is $60,000. Normally, she’d only be able to deduct $10,000 of that on her personal federal return due to the SALT cap.
By making the PTE election, S-Corp pays the $60,000 state tax directly. That amount becomes a fully deductible business expense, reducing the corporation’s federal taxable income.
3. Take Advantage of Enhanced Section 179 Expensing
Increased Deduction Limit: The maximum amount a business can immediately deduct under Section 179 has increased to $2.5 million, up from the pre-OBBB limit of $1.25 million.
Strategy: Plan large capital investments (like new imaging or CAD/CAM equipment) before bonus depreciation phases down in 2027.
Example: Dr. Chen wrote off $180,000 in new equipment, reducing taxable income and improving cash flow.
4. Expand Wealth Transfer with Higher Estate & Gift Tax Exemptions
What Changed: Exemptions permanently rise to $15 million (individuals) and $30 million (married couples) in 2026, inflation-indexed thereafter.
Strategy: Explore succession planning tools like GRATs, family limited partnerships, or lifetime gifting to pass ownership or real estate tax-free.
Example: Drs. Thompson began transferring shares of their $6M practice to their daughter under the new exemption, avoiding gift and estate taxes because it’s under the high estate/gift tax thresholds.
5. Use Donor-Advised Funds (DAFs) to Front-Load Charitable Giving
Strategy: Contribute a large amount (either cash or highly appreciated properties such as stock) to a DAF in a high-income year, get the deduction up front, and give it to your favorite charities over time.
Example: Dr. Morales AGI is $600,000 and donates cash $40,000 to a DAF. Her AGI is $600K, so 60% = $360K. She gets a $40,000 – $3,000 = $37,000 deduction.
Action Steps for Dentists
Here are some immediate areas where dentists should consider planning:
- Revisit your SALT/PTE deduction strategy – especially if you live and work in high-tax states like California.
- Evaluate estate plans – the higher exemption levels may allow you to transfer more to your heirs tax-efficiently.
- Business succession planning – think beyond dentistry. Tax law changes can impact how and when you sell your practice.
- Integrate tax and financial planning – coordinate with a team that includes a CPA, especially if you’re nearing any of the phase-out limits.
Final Thought
As with a dental x-ray, what’s beneath the surface of this bill matters most. At Pantheon Wealth Planning, we specialize in working with medical and dental professionals, helping them translate policy changes into actionable financial strategies.
If you’re unsure how this legislation affects your long-term planning, we’d love to help you break it down—without the lidocaine.
Schedule a consultation: https://www.pantheonwealthplanning.com/contact-page
Sources:
1 Text of “ONE BIG BEAUTIFUL BILL ACT,” Congress.gov, https://www.congress.gov/bill/119th-congress/house-bill/1/text
This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.