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Could a Crown be a Tax Deduction?

dental instrumentsAs a dentist, I am sure you never thought of yourself as a manufacturer. However, if you are producing crowns at your dental practice you could be. Using CEREC™ or other CAD/CAM technology to build crowns is considered manufacturing equipment and qualifies for a Domestic Production Activity Deduction (DPAD).

What is the Domestic Production Activity Deduction?

Simply explained, DPAD is the production or manufacturing of tangible property within the United States. A crown would be considered tangible property if it’s produced or manufactured at your dental office. This would not be a tax credit, but a 9 percent deduction of the next income from the crown production once related costs are removed.

How does crown production qualify as manufacturing?

In most cases, you are probably creating the crown while your dental patient is sitting in the chair. It is quicker and more efficient than taking an impression and sending it to a lab to create the crown there. This is called milling and according to the IRS, it’s a manufacturing process.

How to determine if you qualify for the Domestic Production Activity Deduction?

Are you are unsure if you qualify for the Domestic Production Activity Deduction? Contact Rea & Associates. Our team of bright dental CPAs can review the process you use to create your crowns to see if you qualify.

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Rea & Associates, Inc. | Bright Dental CPAs | 7201 Center St, Mentor, Ohio 44060-4858
phone + 440-266-0077