This webinar provides a breakdown of the 2025 tax bill and its specific impact on dental practice owners and 1099 associates. The focus is on how the new legislation affects acquisitions, startups, existing practices, and real estate decisions within dentistry.
About the Speakers
Omar Virjee, CEO and Founder of Virjee Consulting, launched his first business at age 16 and founded Virjee Consulting in 2013. He previously held roles at Fortune 500 companies, is an active real estate investor, participates in the Goldman Sachs 10,000 Small Businesses program, and was recognized as an Inc. 5000 Honoree in 2024.
Humza, Partner of Advisory Services at Virjee Consulting, specializes in tax strategy for dental practices. He leads tax planning for large dental operations, ranging from 1099 associates to franchise builders. Over the past six years, hundreds of dentists have grown tax-efficiently through the firm’s advisory services.
Webinar Agenda
This session covers:
- Major 2025 tax law changes
- Bonus depreciation updates
- QBI deduction permanence
- SALT cap changes
- R&D expense treatment
- Increased scrutiny on S-Corporations
- Strategic planning for buyers, startups, and existing owners
- Real-world case studies
Major 2025 Tax Law Changes
100% Bonus Depreciation Is Back
Bonus depreciation has returned to 100%.
Previously, it phased down to 60% and then 40%. Now, qualifying assets can be fully deducted in year one. This significantly increases first-year deductions for acquisitions, equipment purchases, and buildouts.
QBI (Section 199A) Is Now Permanent
The Qualified Business Income deduction is now permanent.
Previously scheduled to phase out, QBI now remains an ongoing deduction for qualifying practice owners. Proper income management can help maximize eligibility.
SALT Cap Increased to $40,000
The State and Local Tax cap increased from $10,000 to $40,000.
This benefits doctors in high-tax states who previously could not deduct their full state income tax payments.
Domestic R&D Expenses Deductible as Incurred
Domestic R&D expenses can now be deducted in the year incurred rather than amortized.
However, most general dental practices do not qualify for the R&D credit itself despite aggressive marketing claims.
Increased Scrutiny on S-Corporation Compensation
There is increased IRS enforcement around S-Corporation owner salaries.
The IRS is focusing on reasonable compensation. Owners who take only distributions and no salary may face audit risk, payroll tax adjustments, penalties, and interest.
Bonus Depreciation and Practice Acquisitions
When purchasing a practice, the asset allocation in the purchase agreement determines how deductions are applied.
A $1,000,000 acquisition is typically allocated among:
- Equipment
- Leasehold improvements
- Supplies
- Patient records
- Goodwill
- Non-compete agreements
Previously, only 40% of short-life assets could be deducted in year one. With 100% bonus depreciation restored, qualifying assets can now be fully expensed immediately.
Case Study: Practice Acquisition
Purchase Price: $1,000,000
Without strategic allocation:
- Approximately $50,000 first-year deduction
With proper planning:
- $400,000+ first-year deduction
- Potential six-figure tax savings
Deductions may also be split across years using Section 179 and income modeling strategies to optimize QBI thresholds.
Startup Practice Strategy
For startup owners, planning includes:
- Bonus depreciation on equipment and buildout
- Deducting pre-opening expenses
- Retirement contributions (such as SEP IRA during early phase)
- Proper entity structuring
S-Corporation Timing Considerations
Electing S-Corp status at the wrong time can trigger unintended capital gains if negative equity or high liabilities exist.
Planning the election carefully in Year 1 is critical.
Real Estate and Cost Segregation Strategy
Purchasing practice real estate allows additional depreciation acceleration.
Example:
Building purchase: $750,000
With cost segregation:
- Reclassification into 5-, 10-, and 15-year property
- 100% bonus depreciation eligibility
- Significant first-year depreciation
- Potential substantial tax savings
Real estate planning may include 1031 exchanges and multi-year equity growth strategies.
Stacking Strategies for Maximum Tax Reduction
Effective planning stacks multiple deductions.
Example:
Net Income: $800,000
Without planning: $300,000+ tax bill
Stacked strategy:
- Cash balance plan contribution
- 401(k) contributions
- Depreciation
- Unlocking QBI
Result:
- Tax liability potentially reduced significantly
Stacking combines retirement planning, depreciation, and entity strategy.
Strategic Planning Based on Long-Term Goals
Tax planning should align with:
- Expansion plans
- Multi-location growth
- Real estate investment
- Lifestyle practice ownership
The tax code rewards proactive business activity.
Simply purchasing isolated deductions is not a long-term strategy. Structured planning is required.
Key Takeaways
- 100% bonus depreciation restores powerful first-year deductions
- QBI is now permanent and must be strategically optimized
- S-Corporation salary compliance is increasingly important
- Cost segregation accelerates real estate deductions
- Multi-year planning and stacking maximize tax efficiency
