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A detailed, scenario-driven breakdown for dental practice owners, associates, and future practice buyers in San Diego County. Compare real-world tax strategies and discover which path offers the best financial advantages.
The tax strategies outlined in this guide are based on current federal tax law, including provisions from the Tax Cuts and Jobs Act (TCJA) and subsequent legislation. For the most current legislative text and updates, reference: H.R. 1 - 119th Congress
Recent tax legislation offers specific opportunities for dentists in San Diego — but the benefits vary dramatically based on your employment structure. Whether you're a W-2 employee, 1099 contractor, or practice owner, understanding these differences could change your financial trajectory.
This guide breaks down actionable scenarios comparing how different employment structures can maximize deductions, optimize entity structures, and leverage current tax rules to legally retain more income.
Get a personalized analysis comparing your current tax situation as W-2, 1099, or practice owner. Includes San Diego-specific calculations and optimization strategies.
Standard deduction amounts are governed by current federal tax law. Employee business expense deductions were significantly limited under Section 67 of the Internal Revenue Code.
Convert to 1099 contractor status if your practice allows it, or consider buying into the practice to unlock full tax strategy benefits.
Section 199A QBI deduction provisions allow up to 20% deduction for qualified business income. Self-employment tax obligations are detailed in current tax legislation. Reference: Federal Tax Code Section 199A
Without an S-Corp structure, this dentist is leaving $20,000+ on the table annually in tax savings.
S-Corporation tax treatment is governed by Subchapter S of the Internal Revenue Code. Section 280A Augusta Rule provisions allow tax-free rental income from personal residence. Reference: IRC Section 280A & Subchapter S
For contractors earning $150K+, S-Corp structure with proper salary/distribution split is the optimal tax strategy.
Section 179 equipment expensing, cost segregation studies, and real estate depreciation benefits are governed by current tax legislation. Multiple entity structures for tax optimization are detailed in: IRC Sections 179, 168, & 199A
Practice owners can leverage multiple strategies simultaneously, including real estate ownership, equipment depreciation, and advanced entity structures for maximum tax efficiency.
The tax strategies compared below are based on current federal tax law provisions. For detailed legislative text, see: 119th Congress H.R. 1
| Strategy | W-2 Employee | 1099 Sole Prop | 1099 S-Corp | Practice Owner |
|---|---|---|---|---|
| QBI Deduction | ❌ Not Available | ✅ Up to 20% | ✅ Up to 20% | ✅ Up to 20% |
| Self-Employment Tax | ✅ Employer Pays | ❌ Full 15.3% | ✅ Reduced | ✅ Optimized |
| Business Deductions | ❌ Very Limited | ✅ Available | ✅ Available | ✅ Maximum |
| Equipment Depreciation | ❌ Not Available | ✅ Available | ✅ Available | ✅ Full Benefits |
| Real Estate Strategies | ❌ Not Available | ❌ Limited | ❌ Limited | ✅ Full Access |
Missing out on business deductions and QBI benefits. Consider 1099 conversion or practice ownership.
Operating as sole proprietor instead of S-Corp can cost $20,000+ annually in unnecessary taxes.
IRS audits are increasing. Proper documentation and strategy implementation are critical.
Ready to optimize your tax strategy? Whether you're a W-2 associate, 1099 contractor, or practice owner, we'll analyze your specific situation and recommend the best path forward.
Whether you're practicing in La Jolla, Chula Vista, or Escondido, the current tax landscape has created clear winners and losers. The key insights:
Tax legislation continues to evolve. For the most current information on federal tax provisions affecting dental practices, monitor: Congressional legislation updates and consult with qualified tax professionals.
You either optimize your tax strategy — or pay for those who do.
Disclaimer: This article is for informational purposes only and should not be considered tax or legal advice. Tax situations vary greatly by individual circumstances. The legislative references provided are for informational purposes and may be subject to change. Always consult with qualified tax professionals familiar with your specific situation and current tax regulations. Legislative links are provided for reference to current federal tax law provisions.