Just wanted to add - I'm a dental practice consultant, and this situation is actually pretty common. One thing to watch for: if you purchased any specialized dental equipment for the practice that you're taking to the new location, make sure you document the transfer carefully. The IRS might consider this a "sale" from one business to another, which could trigger depreciation recapture if not handled correctly. Your new business would likely need to purchase these assets at fair market value from the old business. Also, don't forget about any security deposits for office space, insurance premiums, etc. Some of these might be partially refundable, which would offset some of your losses.

I went through a similar situation when I had to dissolve my consulting LLC before it generated any revenue. One thing that really helped was keeping detailed records of everything - not just receipts, but also documentation showing the business purpose of each expense and dates when they were incurred. For the IRS filing, since you elected S-corp status, you're absolutely required to file that final 1120-S even with zero income. The IRS computer system is expecting that return based on your election. Miss it and you could face penalties. Regarding your startup expenses, the good news is that dental practice expenses from one location can generally be carried over to another dental practice since it's the same line of business. The key is proper documentation and making sure your new Colorado practice is set up to properly inherit these costs. One tip: consider whether any of your equipment purchases might qualify as assets that can be directly transferred rather than treated as startup costs. Things like dental chairs, computers, or other equipment might be handled differently for tax purposes than purely startup expenses like licensing fees.

One thing nobody has mentioned yet - with income at your level, you should also consider hiring a financial advisor alongside a CPA. I'm a neurosurgeon who tried the DIY approach for both taxes and investments my first two years and realized I was making costly mistakes in both areas. A good financial advisor who works specifically with physicians can help coordinate your overall financial strategy - student loan repayment approach (PSLF vs refinancing vs aggressive paydown), disability insurance (crucial for surgeons), retirement planning, tax-efficient investing, and eventual practice buy-in strategies if that's on your horizon.

Congratulations on finishing your fellowship! You're absolutely right to be thinking about this now rather than after your first year of 1099 income. I'm a tax attorney who works with physicians, and I'd strongly recommend getting professional help for at least your first year. At your income level ($750-850k), the potential tax savings from proper planning will far exceed the cost of hiring someone. Here's why: 1. **Entity Structure**: You'll likely benefit from an S-Corp election, which could save you $15-25k annually in self-employment taxes alone. But timing and setup matter - you want this done correctly from day one. 2. **Retirement Planning**: As 1099, you can contribute much more to retirement accounts than you could as W-2. With proper planning (Solo 401k, defined benefit plans, etc.), you could potentially shelter $100k+ annually while aggressively paying down your student loans. 3. **Quarterly Estimates**: These aren't just about avoiding penalties - strategic timing of income and expenses can optimize your overall tax situation. 4. **Business Deductions**: Medical practices have unique deduction opportunities that general tax software often misses. Look for a CPA who specifically works with physicians and understands medical practice finances. The investment (typically $3-5k annually) will pay for itself many times over. Once you're established and understand the complexities, you can always reassess whether to continue using professional help.

Question for anyone who might know - I have a similar situation but with a 1099-K for online selling. Is that treated the same way as OP's 1099-MISC? And do we get to deduct expenses against that income?

This is a classic example of how additional income can create a much bigger tax impact than people expect. Your $5,000 grant isn't just taxed in isolation - it's stacked on top of your W-2 income, which means it's taxed at your highest marginal rate. With $72K in W-2 income, you're likely in the 22% tax bracket for 2024, so that $5,000 grant gets hit with 22% federal tax (about $1,100) plus any state taxes. Since nothing was withheld from the grant, you're paying that full amount at filing time. The real kicker is that this additional income also reduced the refund you would have gotten from your W-2 overwithholding. So you're seeing both the tax on the new income AND the loss of your expected refund. For next year, definitely consider making quarterly estimated payments if you receive similar grants, or increase your W-4 withholding to cover the extra tax liability. The IRS expects you to pay taxes throughout the year, not just at filing time.

Just make sure your parents write "GIFT" in the memo line of the check they give you and keep good records. My uncle is an accountant and says that's important for documentation if the IRS ever questions it.

Great question! I went through the exact same situation last year when my parents helped with my down payment. The good news is that as the gift recipient, you won't owe any taxes on the $45,000 - that's the giver's responsibility, not yours. Here's what you need to know: For 2025, each parent can give you up to $18,000 without any reporting requirements. So together, they could give you $36,000 with zero paperwork. Since you're receiving $45,000, they'll need to file Form 709 (gift tax return) to report the $9,000 excess, but they almost certainly won't owe any actual tax unless they've already given away millions in their lifetime. You can use the full amount for your down payment! Just make sure to get a proper gift letter from your parents for your mortgage lender - they'll require documentation that it's truly a gift and not a loan. Your lender will probably have their own template for this. Don't stress about setting aside money for taxes - you're completely in the clear as the recipient!

Just a heads up on something that surprised us during our C to S conversion last year - the Accumulated Adjustments Account (AAA) tracking became really important. After conversion, you'll need to carefully track AAA which is basically the post-conversion retained earnings that have already been taxed at the shareholder level. When you eventually distribute proceeds from property sales, the ordering rules for distributions can get tricky between AAA, accumulated E&P from the C corp days, and other sources. Our accountant messed this up initially and it almost resulted in some distributions being incorrectly taxed as dividends when they should have been tax-free returns of already-taxed income.

One thing I haven't seen mentioned yet is the potential impact of state taxes on this strategy. While the federal tax benefits of converting from C corp to S corp are well-documented, some states don't recognize S corp elections or have their own built-in gains taxes that could significantly impact your overall tax savings. For example, some states will continue to tax the entity as a C corporation even after federal S election, which could eliminate much of the benefit you're hoping to achieve. Other states have their own recognition periods or different rules for built-in gains. Given that you're dealing with real estate, you'll also want to consider whether your state has any special provisions for real estate held in corporate entities. Some states have additional taxes or fees for corporations holding real property that could affect your cost-benefit analysis. I'd strongly recommend getting state-specific advice from a tax professional familiar with your jurisdiction before moving forward with the conversion. The federal tax savings could be completely offset by unexpected state tax consequences.