In a promising development for dental practice owners, a bipartisan deal currently under discussion in Congress could have a significant impact on the financial landscape. The proposed plan outlines the potential return of bonus depreciation to 100%, specifically beneficial for dental equipment and facility improvements. If enacted, this change would apply retroactively to qualified property placed into service after December 31, 2022, providing dental practices with a unique opportunity to enhance their facilities and invest in state-of-the-art equipment, all while enjoying the full tax benefits.
If passed dentists looking to acquire offices or expand their current office by adding more operatories and equipment will get more favorable immediate tax breaks if structured properly by the tax advisor.
Dentists that have made significant investments in their practice in 2023 will generate even greater savings then previously estimated because the law would be retroactive for 2023.
We expect this will also boost the real estate market as doctors and dentists with investable cash will be able to acquire property and combine it with cost segregation strategies to generate significant tax savings. We believe this would continue to keep commercial real estate prices stable and in some cases at a premium.
We expect practice acquisition prices to also trade at a premium as successful practice owners will look to acquire additional locations due to the bonus depreciation tax benefits vs paying a large tax bill.
We will continue to keep clients updated as this deal tries to make it through the law making process. We will adjust our 2023 and 2024 tax strategy for clients in our Tax Planning program if this turns to law.
Written by
Omar Virjee, CPA, CTC
