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Dental Accounting · Dental Professional Corporations · Licensed CPA

Dental Accounting Services for Ontario Practices

The accounting a dental practice actually needs: a Dental Professional Corporation structured for the Small Business Deduction, the mixed exempt-and-taxable HST handled properly, associate classification defended, and clean financial statements behind your T2. All by a licensed CPA.

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Mixed HST Done Right
Exempt and taxable supplies separated, partial ITCs recovered
DPC Tax Planning
Small Business Deduction, salary vs dividend, deferral
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Support until 9 PM, 7 days a week

Dental Practices Are Not Ordinary Small Businesses

A dental practice carries tax questions a generalist accountant rarely handles well. Your Dental Professional Corporation exists to keep active income at the low corporate rate and defer personal tax, but only if the share structure, salary-versus-dividend mix and income-splitting all follow the rules. Your revenue is mostly HST-exempt, yet the cosmetic work, product sales and resold lab work are taxable, making you a mixed supplier owed partial input tax credits most practices never claim.

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Our Dental Accounting Services

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DPC Corporate Tax

Your Dental Professional Corporation T2 prepared and filed with full planning, not just compliance.

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Mixed HST

Exempt clinical and taxable cosmetic supplies separated, with the partial input tax credits most practices miss.

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Monthly Bookkeeping

Clean, reconciled books every month, set up so the HST apportionment works from the start.

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Financial Statements

Notice to Reader statements for lenders and RCDSO review, with a balance sheet that matches real equity.

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Tax Planning

Salary-versus-dividend mix, deferral and income splitting planned before your year end.

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Personal Tax

Your personal T1 prepared and coordinated with the corporation so the whole picture lines up.

Dental Accounting by a Licensed CPA

Every part of dental accounting handled correctly, from DPC tax to the mixed HST. All fees include HST.

1

Dental Professional Corporation Tax

The DPC is the foundation of dental tax planning, but only when run correctly.

  • Low corporate rate on the first $500,000 of active practice income through the Small Business Deduction.
  • Income kept in the DPC taxed at the low rate, deferring personal tax.
  • Certificate of Authorization from the RCDSO confirmed before the DPC bills patients.
  • Voting shares with the dentist, non-voting shares limited to permitted family.
  • Inactive DPC kept as a holding company for investments where it suits your plan.
2

The Mixed HST Problem

Almost every practice gets this wrong, in one direction or the other.

  • Most clinical dental services are HST-exempt, so no HST is charged on them.
  • Cosmetic work, product sales and resold lab work are taxable supplies.
  • The practice becomes a mixed supplier owed proportionate input tax credits.
  • Registration required once taxable supplies exceed $30,000.
  • Apportionment set up so partial credits are recovered without audit risk.
3

Associate & Hygienist Classification

The CRA audits dental practices specifically on this. Wrong costs both ways.

  • Each associate and hygienist reviewed against the CRA control and integration test.
  • Employees go on payroll with a T4, genuine contractors on a T4A.
  • Most hygienists are employees, despite the common contractor practice.
  • Contractor relationships documented with engagement agreements and control-test evidence.
  • Assistants, reception and office staff always treated as employees.
4

Bookkeeping & Financial Statements

Clean books are what make correct HST and an accurate balance sheet possible.

  • Exempt and taxable revenue separated so the mixed-supplier HST works.
  • Billings reconciled to insurance remittances and bank deposits.
  • Equipment and capital cost allowance schedule maintained on chairs and imaging.
  • Retained-earnings carryforward corrected so the balance sheet matches real equity.
  • Notice to Reader statements prepared for the T2, lenders and RCDSO review.
5

Compensation & Tax Planning

The corporation only delivers if it is planned every year.

  • Salary-and-dividend mix set before your year end, balancing RRSP room and the splitting rules.
  • Deferral captured by keeping income in the DPC at the low rate.
  • Income splitting through non-voting family shares, within the Tax on Split Income limits.
  • Continuing education, RCDSO fees and conference travel claimed as deductions.
  • Personal T1 coordinated with the DPC so instalments and RRSP room line up.
6

CRA Support & Practice Transitions

Whether you are audited, buying, selling or just catching up, we handle it.

  • Dental audits on classification, cosmetic HST and billing-to-insurance discrepancies handled.
  • Billings reconciled to insurer data so revenue on the T2 stands up.
  • Practice purchase or sale structured, with the Lifetime Capital Gains Exemption modelled.
  • Books, HST and unfiled T2s brought current where a practice is behind.
  • Retained earnings and HST reviewed first, since that is where problems hide.

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Case Studies

Missed HST Credits Recovered

A single-location practice was doing tens of thousands a year in whitening and adult cosmetic work without separating it from exempt clinical revenue, and claiming no partial input tax credits. We set up the mixed-supplier apportionment, registered correctly, and recovered the credits it was owed on general costs. The figures here are illustrative of the work we do, not a specific client file.

Partial ITCs recovered, HST cleaned up

Retained Earnings Corrected

A dentist who had changed accountants twice had a Schedule 100 balance sheet that no longer matched real equity, and a lender had queried it. We reconciled the opening balances and corrected the retained-earnings carryforward so the statements were accurate for financing and RCDSO review. The figures here are illustrative of the work we do, not a specific client file.

Balance sheet matched to real equity

Salary and Dividend Mix Optimised

An incorporated dentist was taking all dividends, building no RRSP room and missing deferral opportunities. We modelled the salary-and-dividend mix against their income and family, set the compensation for the year, and used the corporation for deferral. The figures here are illustrative of the work we do, not a specific client file.

Compensation planned, deferral captured

Associate Classification Defended

A practice paying two associates on T4A faced CRA questions on whether they were really employees. We reviewed the arrangements, documented the contractor relationship with proper engagement agreements and control-test evidence, and the treatment held. The figures here are illustrative of the work we do, not a specific client file.

Contractor treatment documented and held

Your Dental Professional Corporation and Its Tax Advantages

A DPC is the foundation of dental tax planning, but only when it is structured and run correctly. Here is what it does and what it requires.

FeatureWhat It Means for You
Small Business DeductionLow corporate rate on the first $500,000 of active practice income
Tax deferralIncome kept in the DPC is taxed at the low rate, deferring personal tax
Salary vs dividendA planned mix that balances RRSP room, deductions and the splitting rules
Certificate of AuthorizationRequired from the RCDSO before the DPC can bill patients
Share structureVoting shares with the dentist, non-voting shares limited to permitted family
Inactive DPC optionCan continue as a holding company for investments, filing nil T2s

The corporation only delivers if it is planned every year. A DPC that files a T2 with no planning cycle leaves deferral and income-splitting on the table. We set the compensation mix before your year end and keep the structure compliant with RCDSO rules. See our associate dentist tax planning.

The HST Problem Almost Every Dental Practice Gets Wrong

Most clinical dental services provided for a patient's health are HST-exempt: exams, cleanings, fillings, extractions, crowns, root canals, dentures, medically indicated orthodontics. You do not charge HST on them, and you generally cannot claim input tax credits on the costs behind them. So far, simple. The complication is that a typical practice also does taxable work: purely cosmetic procedures like elective whitening and cosmetic-only veneers, retail product sales, and lab work resold to other dentists.

That makes your practice a mixed supplier, and it changes everything. Once your taxable supplies exceed $30,000 you must register and collect HST on them, and, importantly, you become entitled to claim a proportionate share of the input tax credits on your general costs, rent, utilities, supplies and more. Most practices either miss those partial credits entirely, losing real money, or claim too much and create an audit risk. We set up the apportionment once and run it every month so your HST is both correct and complete.

Cosmetic work quietly crosses the HST threshold. A practice doing steady whitening and adult cosmetic treatment can pass $30,000 in taxable supplies without noticing, triggering a registration obligation it has missed for years. We separate exempt from taxable from the start so this never creeps up on you.

Associate and Hygienist Classification

The CRA audits dental practices specifically on whether associates and hygienists are employees or contractors. Getting it wrong is expensive both ways.

WorkerUsual StatusWhy It Matters
Associate: set hours, your direction, your equipmentEmployeeBelongs on payroll with a T4, not a T4A
Associate: own hours, own tools, multiple clinicsContractorT4A or paid via their own corporation, must be documented
Hygienist on a set schedule with clinic equipmentEmployeeMost hygienists fall here despite common practice
Assistants, reception, office staffAlways employeeNo contractor argument, always on payroll

A wrong answer costs both ways. Treat a contractor as an employee and you overpay source deductions; treat an employee as a contractor and you sit on a reassessment for unremitted CPP and EI plus penalties. We document each arrangement with proper engagement agreements and control-test evidence. See our dental office payroll services.

Practice Bookkeeping and Financial Statements

Clean monthly books are what make everything else work: correct HST, an accurate balance sheet, and statements that hold up for lenders and the RCDSO.

What We DoWhy It Matters for Your Practice
Separate exempt and taxable revenueMakes the mixed-supplier HST apportionment possible
Reconcile billings to insurance and depositsCloses the revenue discrepancy the CRA looks for
Maintain the equipment and CCA scheduleCorrect capital cost allowance on chairs, imaging and build-outs
Track the shareholder loan accountKeeps your draws and repayments clean for tax
Correct retained-earnings carryforwardBalance sheet matches real equity for lenders and RCDSO
Prepare Notice to Reader statementsFinancial statements behind your T2 that stand up to review

What Our Dental Accounting Service Includes

Everything a practice needs, on a flat fee. No hourly billing. All fees include HST.

IncludedWhat We Do
DPC corporate tax (T2)We prepare and file your dental corp T2 with full planning.
Mixed HSTWe separate exempt and taxable supplies and file your HST with correct partial ITCs.
Monthly bookkeepingWe keep your books clean and reconciled every month.
Financial statementsWe prepare Notice to Reader statements for lenders and the RCDSO.
Tax planningWe set the salary-and-dividend mix and plan deferral and splitting.
Personal taxWe prepare your personal T1 and coordinate it with the corporation.

Why Choose Gondaliya CPA for Dental Accounting?

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Dental-Specific Expertise

Mixed HST, DPC planning and associate classification handled by a team that knows dental.

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Licensed CPA Ontario

A certified CPA team stands behind every return and every statement.

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Flat Fee, Quoted Upfront

All fees including HST, no hourly billing, no surprises.

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Fully Remote

Your practice accounting handled through our secure portal, wherever you are.

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Transparent Flat-Fee Dental Accounting Pricing

ServiceFeeFrequencyDetails
Dental Accounting ConsultationFREESame dayReview of your HST treatment, structure and retained earnings with an exact flat-fee quote.
DPC Year-End & T2Quoted upfrontAnnualFinancial statements, corporate tax return and tax planning for your dental corp.
Monthly Bookkeeping & HSTQuoted upfrontMonthlyClean books with exempt and taxable revenue separated and HST filed.
Full Practice PackageQuoted upfrontAnnualBookkeeping, HST, T2, financial statements and personal tax together.
DPC IncorporationQuoted upfrontOne-timeIncorporation, share structure and CRA account setup for your practice.

All fees include HST, so the number quoted is the number you pay. Payment is by Interac e-Transfer to info@gondaliyacpa.ca with auto-deposit enabled and the security question set to Not Applicable. Please use our pricing calculator for an exact figure.

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Flat fee, fixed in advance. All fees include HST. 30-Day Money-Back Guarantee.

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Dental Accounting: Cities We Serve

Licensed CPA accounting for dental practices across Ontario, delivered virtually.

TorontoMississaugaBramptonScarboroughEtobicokeNorth YorkMarkhamVaughanOttawaAll of Ontario

Frequently Asked Questions

Should I incorporate a Dental Professional Corporation?
If you earn more than you spend personally, usually yes. A Dental Professional Corporation, permitted by the RCDSO with a Certificate of Authorization, lets you keep active income at the low corporate rate, defer personal tax, and split income within the limits of the rules. For a high-earning dentist the deferral alone is significant. We model your specific numbers before you decide.
What is the Small Business Deduction for my dental corp?
The Small Business Deduction lowers the federal corporate tax rate on the first $500,000 of active business income, so a large share of your practice profit is taxed at the low rate rather than at your personal marginal rate. Keeping income in the corporation and paying yourself what you need is the core of dental tax deferral. We plan the mix each year.
Do I charge HST on my dental services?
Mostly no, but not entirely. Most clinical dental services provided for a patient's health are HST-exempt, so you do not charge HST and generally cannot claim input tax credits on the related costs. But cosmetic procedures done purely for aesthetics, product sales and lab work resold to other dentists are taxable. That mix is where the money and the risk sit.
What is a mixed supplier and why does it matter for my practice?
A dental practice that has both exempt clinical work and taxable cosmetic or product supplies is a mixed supplier. That status entitles you to claim a proportionate share of the input tax credits on your general costs, rent, utilities, supplies, that most practices either miss entirely or claim incorrectly. We set up the apportionment so you recover what you are owed without creating audit risk.
Which of my services are taxable for HST?
Purely cosmetic procedures that are not medically necessary, such as elective whitening and cosmetic-only veneers or adult cosmetic orthodontics, are taxable. So are retail product sales and lab work you resell to other dentists. Medically indicated treatment, exams, cleanings, fillings, extractions, crowns and the like are exempt. We separate the two so your HST is right.
When do I have to register for HST?
Once your taxable supplies, the cosmetic work, product sales and resold lab work, exceed $30,000 in a rolling four-quarter period, you must register and start collecting HST on those supplies. Many practices cross the threshold on whitening and cosmetic work without realising it. We track it and register you at the right time.
Do I run payroll for my associate dentists and hygienists?
It depends on classification. An associate or hygienist working set hours under your direction with your equipment is an employee, on payroll with a T4. A genuinely independent one, own hours, own tools, multiple clinics, may be a contractor on a T4A. The CRA audits dental offices on this specifically. We confirm each before payroll runs. See our dental office payroll services.
What bookkeeping does a dental practice need?
Monthly bookkeeping that separates exempt from taxable revenue, tracks the input tax credit apportionment, records practice costs against the right accounts, and keeps the shareholder loan and equipment schedule current. Generic bookkeeping that lumps everything together is exactly what causes HST errors and messy year ends. We run it properly each month.
Can you fix my retained earnings if I changed accountants?
Yes. Retained earnings and Schedule 100 carryforward errors are common when a practice changes accountants, and they leave your balance sheet not matching your real equity, a problem for lenders and RCDSO reviews. We reconcile the opening balances and correct the carryforward so your statements are accurate. See our past account clean-up.
How should I pay myself from my dental corp?
With a planned mix of salary and dividends, decided before your year end. Salary creates RRSP room and is a deduction to the corporation; dividends are simpler but carry no RRSP room and interact with the income-splitting rules. The right split depends on your income, your family and your goals. We model it and set it up.
Can I split income with my family through my dental corp?
Within limits. A multi-class share structure with non-voting shares for family members can support income splitting, but the Tax on Split Income rules tax dividends to family members at top rates unless they meet an exclusion. The structure has to be set up correctly and the payments justified. We design it against the current rules.
What can my dental corp deduct?
Ordinary practice costs, staff wages, lab fees, dental supplies, rent, equipment through capital cost allowance, professional dues, RCDSO fees, continuing education, conference travel and more. The line is that the expense must be incurred to earn practice income. We make sure you claim everything you are entitled to and nothing that invites a reassessment.
Is my continuing education deductible?
Yes. RCDSO and continuing dental education courses, and reasonable travel to dental conferences, are deductible to the practice or the DPC as costs of maintaining your professional practice. We capture these each year rather than leaving them on the table.
How is dental equipment treated for tax?
Chairs, imaging, sterilisers and operatory build-outs are capital assets, deducted over time through capital cost allowance in the correct class, not expensed all at once. Getting the class and the timing right affects your deduction and your balance sheet. We maintain the equipment schedule and claim the allowance properly.
Do I need financial statements for my practice?
Yes. Your DPC needs financial statements for its T2, and lenders, equipment financiers and RCDSO reviews may ask for them. We prepare Notice to Reader statements from clean books, so the balance sheet reflects your real equity and the numbers hold up when someone reviews them.
What does a dental accounting engagement cost?
We quote an exact flat annual or monthly fee upfront based on your practice, with no hourly billing, and all fees include HST. You know the number before we start. Please use our pricing calculator for an exact figure.
What if the CRA audits my dental practice?
We handle it. Dental audits commonly focus on associate classification, the HST treatment of cosmetic work, and billing revenue reconciled to insurance data. We prepare the documentation, reconcile the numbers and represent you. See our CRA audit resolution services.
How do you reconcile my billings to insurance payments?
We match your practice management revenue to the insurance remittance statements and the deposits in your bank, so the revenue on your T2 stands up if the CRA compares it to insurer data. Discrepancies between billing systems and deposits are a common audit trigger, and we close them before they become a question.
Can you handle a multi-dentist or multi-location practice?
Yes. Group practices, cost-sharing arrangements and multi-location DPCs are within scope. We keep the accounting, HST apportionment and associate arrangements consistent across the practice and give you one clean set of statements. See our CPA services for dentists.
Do you help with buying or selling a dental practice?
Yes. We help with the tax structure of a purchase or sale, model the Lifetime Capital Gains Exemption on qualifying shares, and prepare the sale-readiness analysis a buyer or lender will scrutinise. Getting the structure right well before a sale is where the tax is saved. We plan it with you.
What accounting software should my practice use?
We work with QuickBooks Online or Xero, integrated with your practice management system, so revenue, HST and costs flow through cleanly. We set up the chart of accounts to separate exempt and taxable supplies from the start, which is what makes the HST apportionment work. We handle the setup and the monthly running.
Can you catch up a dental practice that is behind?
Yes. If bookkeeping is behind, HST was never separated, or T2s are unfiled, we rebuild the records, correct the HST, and bring the filings current. See our past account clean-up and CRA support.
Should I keep my DPC if I stop practising?
Often yes. A DPC can remain incorporated but inactive, filing nil T2 returns, and many dentists keep it as a holding company for the investments built up during practice years. Whether to wind it up or keep it depends on your assets and plans. We advise on the right path for your situation.
How does incorporating help me save for retirement?
By leaving income in the corporation taxed at the low rate, you have more capital to invest inside the DPC than you would after personal tax, and you control when you draw it out. Combined with salary that builds RRSP room, the corporation becomes a retirement vehicle. We build the plan around your timeline.
Do you handle my personal tax as well as the corporation?
Yes. Your personal T1 and the DPC's T2 connect through your salary and dividends, so we prepare both and coordinate them, making sure the compensation mix, RRSP room and tax instalments all line up. One firm for both is how the planning actually works.
What is a Certificate of Authorization?
It is the RCDSO authorisation that lets you practise dentistry through a professional corporation. Your DPC cannot bill patients until it holds a valid certificate, and the share structure has to meet RCDSO rules, voting shares with dentists, non-voting shares limited to permitted family members. We handle the incorporation and the compliance.
How quickly can you take over my dental accounting?
Once we have your prior filings, access to your books and the practice details, we can take over within a few weeks, sooner if a deadline is close. We start with a review of the HST treatment and the retained earnings, since those are where problems usually hide.
Do you serve dental practices outside Toronto?
Yes. We are a licensed Ontario CPA firm serving dentists across Ontario and Canada, virtually. Everything is handled through our secure portal, so your location is never a constraint.
Why use a CPA who knows dental specifically?
Because the mistakes are dental-specific: missed partial HST credits on a mixed practice, mishandled associate classification, retained-earnings carryforward errors, and cosmetic revenue not separated. A generalist accountant who files the T1 and T2 without a planning cycle leaves money and exposure on the table. We work with dental practices every week.
How do I get started with dental accounting?
Please book a free consultation and tell us about your practice, whether you are incorporated, your service mix and how you are currently paid. We review your HST and structure, quote a flat fee, and take over your accounting. Book Free Consultation →

Meet Your Dental Accounting Specialists

Sharad Gondaliya, CPA

Sharad Gondaliya, CPA

Founder & Managing Director
Gondaliya CPA Professional Corporation

Sharad advises dental practices on DPC structuring, mixed HST, tax planning and CRA matters.

Vandana Goel, CPA

Vandana Goel, CPA

Senior Accountant
Gondaliya CPA Professional Corporation

Vandana runs practice bookkeeping, HST apportionment, financial statements and year-end for dental clients.

What Our Clients Say

1300+ five-star reviews from business owners across Ontario and Canada.

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Dental Accounting Has Traps a Generalist Misses. Let a CPA Who Knows Dental Run It.

Gondaliya CPA structures your DPC for the Small Business Deduction, handles the mixed HST correctly, defends your associate classification, and prepares clean statements behind your T2, wherever your practice is. Flat fee. All fees include HST.

Licensed CPA Ontario
1300+ Five-Star Reviews
Dental-Specific Team
Flat-Fee, Including HST
Book Free ConsultationCPA Services for Dentists
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