- Practice accountingBookkeeping that reconciles insurance and patient payments, merchant deposits and expenses.
- PayrollStaff and owner payroll, filings and year-end forms.
- Practice tax returnsProfessional corporations, PLLCs, S corporations and group partnerships.
- Physician tax planningEntity structure, retirement plans, owner pay and pass-through entity taxes.
Planning issues specific to medical professionals
- The QBI deduction. Health is a "specified service" business, so the 20% qualified business income deduction phases out for owners above certain income levels. Planning around the thresholds can preserve it.
- Reasonable compensation. Physician-owners of S corporations need a salary that reflects what the practice would pay a physician, which is a high bar that the IRS looks at closely.
- Retirement plans. 401(k) and profit-sharing plans, and for high earners, cash balance plans, can shelter significantly more income than standard plans.
- Pass-through entity taxes. New Jersey's BAIT and New York's PTET can reduce federal tax for practice owners affected by the state and local tax deduction cap.
- Group practices. Partner buy-ins and buy-outs, compensation formulas and capital accounts all have tax consequences.
Employed physicians with side income
Locum tenens shifts, moonlighting, consulting and expert witness work are generally self-employment income. That brings quarterly estimated taxes and self-employment tax, but also deductions and retirement plan options (such as a solo 401(k)) that a W-2 job doesn't offer.
Practice bookkeeping
Deposits from insurers, patients and card processors rarely match billing reports day to day. We reconcile them to your books so your financial statements and tax return reflect what the practice actually earned and spent.
Frequently asked questions
Should my medical practice be an S corporation?
Often, once profit is well above a reasonable physician salary. The analysis also considers the QBI deduction limits for health practices, payroll costs, state taxes and BAIT or PTET elections.
Do physicians get the QBI deduction?
Sometimes. Health is a specified service business, so the deduction phases out above certain income levels, and higher earners often lose it entirely.
I'm a W-2 physician with locum or consulting income. What do I need to know?
That income is generally self-employment income, so plan for quarterly estimated taxes, and consider a solo 401(k) and other deductions that come with it.
Do you work with dental and other health practices?
Yes. The same structures and planning issues apply to dental, therapy and other professional health practices.