Tax Planning for Healthcare & Medical Practices
Physician income runs straight into the tax code's specified-service limits, which quietly wipe out a deduction most other business owners rely on — so the levers that actually work for a medical practice are different ones entirely.
Medical practices count as a 'specified service trade or business' under the tax code, which means the 20% qualified business income deduction most other business owners count on disappears completely right around the income level most physicians actually earn. The practices that plan around this well don't use gimmicks — they lean on retirement plan design, entity structure, and income timing. That's exactly where we spend our time.
Financial and operations side only. We work from billing summaries, payroll, and P&L data — never patient charts or clinical records — and operate under a Business Associate Agreement wherever an engagement requires it.
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Where healthcare & medical practices businesses lose money, and how we fix it
The QBI deduction claimed or lost with zero planning around the SSTB phase-out that specifically hits health services
A QBI/SSTB analysis — exactly where the phase-out leaves each partner, and which levers still work above it
Retirement plan design stuck at a basic 401(k) when your practice's income could support a cash balance plan and much bigger deductible contributions
Retirement plan design for high-income practices — 401(k), profit sharing, and cash balance plans sized to your practice's real cash flow
Practice entity structure that hasn't changed since day one, while partner pay and ancillary revenue have outgrown it
Entity and compensation structuring for solo physicians, partnerships, and multi-provider groups
Financial reporting that can't cleanly separate provider productivity, ancillary income, and overhead
Bookkeeping and quarterly planning built from your practice management system's financial exports — never clinical data
Not knowing what a tax advisor can and can't see under HIPAA, so financial questions go unasked
A clean HIPAA boundary: financial data only, with a Business Associate Agreement in place wherever one's required
Common deductions we check for healthcare & medical practices
- Malpractice insurance premiums
- Medical equipment depreciation (Section 179 and bonus depreciation)
- Continuing medical education, licensing, and board certification costs
- Retirement plan contributions (including cash balance plan funding)
- Practice management, EHR, and CRM software costs
- Staff payroll, benefits, and recruiting costs
- Facility lease or ownership costs
A multi-physician group was losing its entire QBI deduction to the SSTB phase-out while running only a basic 401(k) — a cash balance plan design would have created six figures of legitimate deductible contributions and pulled partner taxable income back toward the threshold.
Illustrative example based on common situations in this industry, not a specific named client. See a real, anonymized client result on our Results page.
Frequently asked questions
Do you need access to our EHR or patient records?+
No. We work from your practice's financial data — billing and collections summaries, payroll, and P&L exports from your practice management system. We never need patient charts or clinical records, and where an engagement touches systems that contain protected health information, we operate under a Business Associate Agreement as HIPAA requires.
What's the QBI/SSTB problem for physicians?+
Health services are a 'specified service trade or business,' so the 20% qualified business income deduction phases out completely above certain taxable income thresholds — levels most practicing physicians exceed. Planning above the threshold shifts to different levers: retirement plan design, entity and compensation structure, and income timing.
Do you work with dental practices and direct primary care, or only physician groups?+
Both — the SSTB rules, retirement plan design opportunities, and practice-finance questions are substantially the same across medical, dental, and DPC practices.
More general questions about pricing, process, and security? See the full FAQ.
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