Tax for licensed private practices
A CPA for licensed private practices
Most of what a private practice owner needs from a CPA is the same across professions: an entity decision, a defensible owner salary, and a clear view of which states want a return. What differs is where the money comes from, and that difference is the whole job.
Practice types
Twelve practices, twelve different returns
Each page covers what is actually different about that practice at tax time, rather than repeating the same advice under a different heading.
Therapists & counselors
LPC, LMHC, LCSW and LMFT practices, including group practices with associates.
Read more →Psychologists & psychiatrists
Doctoral and prescriber practices, including forensic and testing work.
Read more →Optometrists & ophthalmologists
Eye care practices, with or without an optical dispensary or an ASC interest.
Read more →Dentists
Solo and small group practices, including acquisitions and associate arrangements.
Read more →Veterinarians
Single doctor practices through small group hospitals, including practice sales.
Read more →Physical therapists
Outpatient clinics mixing insurance and cash pay, including mobile practices.
Read more →Speech therapists & SLPs
Private practice SLPs, including school district contracts and teletherapy.
Read more →Acupuncturists & TCM
Acupuncture and traditional Chinese medicine practices, including herbal dispensaries.
Read more →Nutritionists & dietitians
Nutrition practices, including course, membership and affiliate income.
Read more →BCBAs & ABA practices
Applied behavior analysis practices staffing RBTs and behavior technicians.
Read more →Audiologists
Hearing practices dispensing devices, including bundled pricing models.
Read more →Nurse practitioners
Independent and collaborative practices, including aesthetic and telehealth.
Read more →What every one of them has in common
A licensed practice is a specified service trade or business, which means the qualified business income deduction phases out as income rises rather than applying at every level. Planning around that phaseout, rather than assuming the deduction, is usually where the real money is.
An S corporation election helps only when the salary you pay yourself can be supported. What is defensible depends on your licensure, what you actually do in the practice, and whether you also manage it. The number needs a basis you could explain to someone who asked.
And a practice that treats patients or clients in more than one state has probably created filing obligations it did not plan for. Telehealth and licensure compacts made the clinical side portable and did nothing to the tax side.
Insights
Reading for practice owners
W-2 or 1099: classifying the clinicians in your practice
Whether an associate clinician is an employee or a contractor is not a choice the practice makes on paper. It follows from who controls the work, and the tax cost of getting it wrong falls on the practice.
Setting a reasonable S corporation salary when you are the clinician
The clinician-owner is two employees in one chair, a provider and a manager. A defensible salary prices both jobs, and a group practice already holds the best comparable in its own payroll.
Quarterly estimated taxes for private practice owners
The penalty is not for owing at filing. It is for paying late during the year, and the safe harbors are written so that a practice with unpredictable income can still avoid it.
Which of these is your practice?
Thirty minutes, no charge. Bring last year’s return and whatever is bothering you about it.