Physicians & Medical Practices
Tax and accounting for physicians and medical practices, where the difference between filing and planning shows up in real money. Entity structure, owner compensation, retirement design, and year-round projections built for practice owners who are done being surprised in April.
The Practice
Physicians train for years in medicine, not tax planning. By the time a practice generates real income, foundational decisions about entity structure and retirement contributions have already been made, often by default or based on a quick conversation years ago. At physician income levels, those decisions carry real weight. Current tax law includes thresholds and phase-outs that most businesses never encounter, but physician practices hit them routinely. That makes planning not optional but necessary.
Most practices have a tax preparer who files the return and a bookkeeper who keeps the records. What’s missing is someone watching the whole picture throughout the year, running projections, timing decisions, and making sure planning happens in October rather than getting reported in April. We work with physician practices across specialties because our background includes chiropractic practices, general medicine, and healthcare clients of every kind. We know the planning terrain.
Who This Covers
Who This Covers
Private physician practices across specialties. Internal medicine, family practice, orthopedics, cardiology, dermatology, ophthalmology, psychiatry, and others. Solo practitioners, small groups, and multi-physician practices. The planning needs are similar across specialties. The income level and complexity vary, but the levers are the same.
What Makes It Different
What Makes It Different
Physician income typically exceeds thresholds that trigger limitations under current tax law. Entity structure, owner compensation, and retirement plan design become genuine planning levers rather than paperwork choices. Equipment and build-out decisions have timing and expensing considerations that matter. Quarterly estimated payments on high and variable income require projections that track reality, not last year’s return.
The Planning Levers
Entity selection and compensation structure matter at physician income levels. An S corporation election, when it makes sense, changes how self-employment taxes work on practice income, but only if owner compensation is set at a reasonable level that can be supported. Too low raises audit risk. Too high defeats the purpose. Getting this right requires projections and adjustment through the year, not a decision made once and forgotten. We help practices evaluate whether their current structure still fits and run the numbers on alternatives.
Retirement plan design is one of the most significant planning tools available to practice owners. The options under current law range from basic 401(k) plans up through profit sharing tiers, defined benefit plans, and cash balance plans that can shelter substantial income for high earners. These are among the few remaining ways to meaningfully reduce taxable income. The right structure depends on practice income, number of employees, and how the math works for each owner. We coordinate with plan administrators to help practices implement and fund the right plan for their situation.
Entity and Compensation Structure
Entity and Compensation Structure
We help practices evaluate entity selection and set owner compensation at defensible levels. This includes running the arithmetic on employment taxes versus reasonable salary under current rules, and adjusting compensation through the year as income becomes clearer. Entity decisions made years ago get reviewed against current circumstances. If a change makes sense, we help implement it at the right time.
Retirement Plan Design
Retirement Plan Design
From solo 401(k) plans through profit sharing, defined benefit, and cash balance arrangements, we help practices implement the right plan for their situation. Plan design and contribution timing are coordinated with the tax return and overall planning. The savings depend on income and circumstances, but for high-earning physicians the numbers are often substantial. We work with plan providers to make it happen.
What Goes Wrong
A practice files an S corporation election but never revisits owner compensation. Years later, the salary is either too low to defend in an examination or too high to realize any benefit from the election. No one ran the numbers after the first year. Or a practice makes a large equipment purchase in January when December would have moved the deduction into the prior tax year. The qualified business income deduction phases out at physician income levels for most specialties under current rules, and many practices don’t know that until the return is filed. These are decisions that get locked in.
Estimated payments are often based on last year’s return. For a growing practice, that means underpayment and penalties. For a practice with a slower year, overpayment means cash tied up that could have stayed in the practice. Quarterly projections tracking actual income against actual expenses would have caught both. But if no one is running projections, no one knows until it’s too late. The return preparer reports what happened. They don’t plan what should have happened.
Planning That Happens Too Late
Planning That Happens Too Late
Equipment purchases, retirement contributions, and compensation adjustments all have timing requirements. If no one was planning during the year, opportunities close. The deduction that would have worked in October is gone by February. A planning engagement runs projections throughout the year so decisions get made when they can still have impact.
Estimated Payments That Miss
Estimated Payments That Miss
A practice earning $400,000 one year and $600,000 the next will underpay estimates if they’re based on the prior return. Penalties add up and cash flow surprises follow. Projections that update quarterly keep payments accurate. April becomes confirmation of what you already knew, not a surprise you weren’t ready for.
What Changes
The practice has someone watching the whole picture, not just filing returns. Quarterly projections show estimated income, estimated tax, and estimated payments needed. Mid-year check-ins surface planning opportunities while they can still be used. Year-end planning happens in November when there’s time to act. The return gets filed with nothing left on the table and a walkthrough that explains what was filed and how it compares to prior years.
Entity structure and compensation get reviewed as income changes. Retirement contributions are planned and funded with the tax picture in mind. Equipment purchases happen when they make sense for both the practice and the tax year. Physicians who also invest in clinics or surgery centers have those K-1s and basis issues integrated into the same planning. If you’re ready to talk about how this works for your practice, we invite you to book a consultation.
Year-Round Planning
Year-Round Planning
Regular check-ins, quarterly projections, mid-year and year-end planning sessions. Our tax planning service is built around the idea that the work happens throughout the year, not at the deadline. Every planning lever gets evaluated and decisions get documented while they can still be made. You understand the numbers and the strategy behind them.
The Four Roles Covered
The Four Roles Covered
Most practices have a preparer and a bookkeeper. What’s missing is the advisor planning ahead and the controller analyzing the numbers and surfacing issues. Our engagement covers all four. Tax preparation, tax planning, bookkeeping, and CFO-level advisory in one relationship at fixed prices. No hourly billing, no surprises, and questions encouraged rather than metered.
Planning-First Tax & Accounting
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We begin with a clear understanding of your business, then define the engagement and establish pricing from the outset.