The One Big, Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, represents the most comprehensive tax overhaul since the 2017 Tax Cuts and Jobs Act. This sweeping legislation introduces a wide array of permanent and temporary provisions that affect individuals, families, and businesses alike. For dentists—whether you’re running a solo practice, managing a multi-location group, or planning for retirement—this bill offers both opportunities and important considerations for your financial planning.
Tax Provisions Affecting Individuals
Permanent Tax Rates and Standard Deduction
OBBBA makes the current individual tax brackets permanent and increases the standard deduction to $31,500 for married couples filing jointly, $23,625 for heads of household, and $15,750 for single filers. This provides certainty and a higher deduction baseline going forward.
Expanded State and Local Tax (SALT) Deduction
For 2025 and 2026, the SALT deduction cap is temporarily raised to $40,000, with gradual inflation adjustments through 2029. Dentists in high-tax states can benefit significantly during this window.
Deduction for Car Loan Interest
Dentists purchasing new, U.S.-assembled vehicles for personal use can deduct up to $10,000 in loan interest from 2025 through 2028. There are income phaseouts starting at $100,000 ($200,000 for joint filers).
Deduction for Tip and Overtime Income
While most dentists don’t earn tips, associates or staff in spa-like or aesthetic practices might. There’s a $25,000 deduction for qualified tips and $12,500 for qualified overtime (double for joint returns), both valid from 2025 through 2028.
Enhanced Deduction for Seniors
Taxpayers aged 65 and older can claim a $6,000 personal exemption-like deduction through 2028, subject to income phaseouts.
Student Loan Discharge Exclusion
Discharges due to death or disability remain tax-free, but only if all related SSNs are work-eligible and reported.
Trump Accounts and 529 Enhancements
New tax-advantaged Trump Accounts for children under 18 begin in 2026, with federal $1,000 contributions for qualifying kids. 529 plans now allow up to $20,000 annually and can be used for tutoring, credentialing, and K–12 expenses.
Estate and Gift Tax Exemption Expansion
The estate and lifetime gift tax exemption increases to $15 million in 2026 and will be adjusted for inflation going forward.
Itemized Deduction Cap for High-Income Taxpayers
Dentists in the top tax bracket will now have itemized deductions capped at 35 cents on the dollar, which may limit the benefit of mortgage, charitable, or SALT deductions.
Charitable Contribution Changes
Non-itemizers can now deduct up to $2,000 in cash contributions, while itemizers face a new 0.5% AGI floor on deductions. Planning around these changes is key.
Child and Dependent Care Enhancements
The dependent care assistance exclusion increases to $7,500, and the credit now covers up to 50% of eligible expenses, making it easier for working parents to manage costs.
Health Savings Account (HSA) Enhancements
Starting in 2026, HSAs can be used for direct primary care and telehealth services, and HDHP eligibility expands to include bronze and catastrophic plans.
Mortgage Insurance and Residence Interest
The mortgage insurance premium deduction is permanently restored and the $750,000 mortgage interest limit is made permanent.
Casualty Loss Deduction
Losses from federally or state-declared disasters remain deductible, even without itemizing. This provision offers peace of mind for practices in disaster-prone areas.
Tax Provisions Affecting Dental Practices and Business Owners
Qualified Business Income Deduction
The 20% deduction for pass-through business income is now permanent, with broader income phase-in thresholds and a new $400 minimum deduction.
Bonus Depreciation and Section 179 Expensing
OBBBA makes 100% bonus depreciation permanent and raises the Section 179 limit to $2.5 million (phaseout starts at $4 million), allowing immediate expensing of dental equipment and technology upgrades.
Research and Experimental Expenses
Domestic R&D expenses can now be fully expensed immediately. Practices investing in new software, systems, or service development should benefit.
Business Interest Deduction Changes
Interest limitations now follow the EBITDA standard (earnings before interest, taxes, depreciation, and amortization), improving deductions for leveraged practices.
Production Property Depreciation
A new 100% deduction for qualified production property (e.g., dental lab facilities) begins in mid-2025, although this is likely limited to large-scale operations.
Increased 1099 Threshold
The reporting threshold for Forms 1099-MISC and 1099-NEC increases from $600 to $2,000, easing administrative burden for smaller practices.
Childcare Credits for Employers
The employer-provided childcare credit increases to $500,000 (and $600,000 for small businesses), covering up to 40–50% of qualifying expenses.
Paid Family and Medical Leave Credit
This credit is now permanent, and can also apply to insurance policies covering leave. Dentists who offer benefits through third-party providers should review eligibility.
Limit on Excess Business Losses
The $250,000/$500,000 limit on excess business losses is now permanent. Any disallowed losses will carry over and reduce income in future years.
Opportunity Zones and QSBS Changes
Enhanced Opportunity Zone benefits and improved small business stock exclusions (up to 100% after 5 years) may benefit dentists investing in qualifying ventures.
Clean Energy Credit Phaseouts
Dentists considering electric vehicles, solar panels, or energy-efficient upgrades should act quickly—these credits phase out starting late 2025.
Next Steps for Dentists
With such an expansive set of changes, the One Big, Beautiful Bill presents numerous tax-saving opportunities—but also requires strategic planning. Whether you’re investing in new equipment, optimizing your compensation, or planning your family’s financial future, a proactive approach is essential.
At Only for Dentists, we specialize in translating complex tax legislation into real-world strategies for dental professionals. Let’s schedule a call to discuss how OBBBA could impact your 2025 return and beyond.