Tax Planning for Louisville Medical Practices & Physicians
We work with physicians, dentists and practice owners in and around Louisville, from employed doctors with side income to multi-provider practices. The federal rules for medicine are strict; the local layer is where practices with more than one location run into trouble. We work with your financial data only, never patient records.
Call (502) 805-7768 or book a free consultation.
What's different here
Occupational tax follows where you practice
Louisville Metro taxes a practice's net profits and withholds on employees' wages. A practice with offices or hospital privileges in more than one Kentucky county apportions its profit by where receipts and payroll were earned, and other counties with occupational taxes can have their own filings.
Kentucky's pass-through entity tax election
Since 2022, a practice set up as an S corporation or partnership can elect each year to pay Kentucky income tax at the entity level, which can make that state tax deductible on the federal return for owners who are over the federal limit on state and local tax deductions. It is an annual decision, and it only helps when the numbers support it.
Offices in Southern Indiana
Kentucky and Indiana's reciprocal agreement covers employees' wages, not a practice's business income. A satellite office in Jeffersonville or New Albany brings Indiana into the practice's returns.
The QBI deduction phases out for medicine
Health care is a specified service business, so the 20% qualified business income deduction phases out as income rises. For many physicians the planning is about where income lands relative to that phase-out.
Retirement plans that fit a practice
A cash balance plan alongside a 401(k) can shelter far more than a 401(k) alone, but it has to be designed around the whole staff, not just the owners.
Common questions
Should my practice make Kentucky's pass-through entity tax election?+
It depends on the year. The election is made annually, and it helps mainly when the owners are over the federal limit on state and local tax deductions. We run it both ways before recommending it.
Do you see patient information?+
No. We work with the practice's financial and operational data only, never patient charts, and sign a business associate agreement where one is required.
I'm an employed physician with some 1099 income. Is that worth planning for?+
Often, yes. Side income from locum work, directorships or consulting is business income, with its own retirement-plan and deduction options, and in Louisville it can bring its own occupational tax filing.
Also in Louisville: Contractors & the Trades · Real Estate Investors & Hosts · All Louisville businesses
Get a tax review built for your Louisville practice
Get a free review of your current tax position from a licensed advisor.
Book a Free ConsultationBased in Louisville, KY · Tax planning for Louisville businesses