Accounting for Dentists

Accounting for dentists in Ontario and the GTA

Featherly Services is a CPA-registered firm that works with dentists and dental practice owners across the Greater Toronto Area and Ontario. We handle the bookkeeping, your professional corporation's T2, your personal T1, and the HST questions that generalist bookkeepers get wrong.

The short answer

Most dental services are HST-exempt, but cosmetic work and some product sales are not, and that mix decides which input tax credits you can claim. Dentists usually practise through a professional corporation, so your pay structure, associate arrangements, and equipment purchases should be planned together, not filed in June.

What's Different

What makes accounting for dentists different

HST: exempt versus taxable

Basic dental care is exempt. Purely cosmetic procedures such as whitening are typically taxable. A mixed practice has to split revenue correctly, because it limits the input tax credits you can claim.

Your professional corporation

Ontario dentists commonly practise through a professional corporation. Salary versus dividends, retained earnings, and rules on family shareholders all change how much tax you pay on the same income.

Associates: T4 or T4A

Whether an associate is an employee or an independent contractor affects payroll, HST, and audit exposure. The label in the agreement is not enough. CRA looks at how the relationship actually works.

Equipment and CCA

Chairs, imaging, sterilization equipment, and computers sit in different CCA classes at different rates. Timing a purchase around year end can shift the deduction between tax years.

Lab fees, supplies, and overhead

Coding lab fees, materials, and clinic overhead separately shows your real margins and lets you compare your practice against benchmarks.

Buying or selling a practice

A practice purchase or sale involves goodwill, asset versus share deals, and possibly the lifetime capital gains exemption on qualifying shares. The planning has to start well before the deal.

Common Mistakes

What we see go wrong

  • Treating all revenue as HST-exempt without checking cosmetic and product sales
  • Paying associates as contractors without checking whether the relationship looks like employment
  • Buying equipment with no plan for which tax year gets the deduction
  • Letting investments inside the corporation grow past the $50,000 passive income limit unnoticed
  • Filing the T2 in June with no planning conversation during the year

What we handle for you

  • Monthly bookkeeping in QuickBooks Online
  • Corporate tax return (T2) and your personal return (T1), coordinated
  • GST/HST returns and input tax credit tracking
  • Tax planning around associate arrangements and practice purchases or sales
  • Year-round advice, not just at filing time

Pricing: bookkeeping from $500 a month, T2 returns from $2,000. Priced by volume and complexity, quoted after a free intro call.

Book a Free Intro Call
FAQ

Common questions from dentists

Do dentists charge HST?

Most dental services are exempt from HST, so dentists generally do not charge it on treatments. Cosmetic-only procedures such as teeth whitening are typically taxable. A practice that offers both has to track them separately.

Should a dentist incorporate?

Most established dentists in Ontario practise through a professional corporation, which lets you defer personal tax on income you do not need to draw. Once net income is consistently above roughly $100,000, the deferral usually outweighs the added accounting and legal cost, but it depends on your situation.

How much does an accountant cost for a dental practice?

Our monthly bookkeeping starts at $500 a month and T2 corporate tax returns start at $2,000, priced by transaction volume and complexity. A multi-associate practice is quoted after a free intro call.

Do you work with dentists outside the GTA?

Yes. We are fully remote and work with dentists across Ontario using shared QuickBooks Online access and secure document sharing.

Fully Remote

Talk to a CPA who already works with dentists.

We serve clients across the Greater Toronto Area, including Toronto, Mississauga, Markham, Vaughan, Brampton, Oakville, Hamilton, Ottawa, Oshawa, and all of Ontario. Book a free 20-minute intro call. No pressure, no sales pitch.

Book a Free Intro Call