Physicians, dentists, and specialty practices have unique high-income tax challenges — and equally unique optimization opportunities.
These are the opportunities we find in nearly every medical practices engagement — money left on the table by traditional CPAs.
High personal income with no shelter — physicians often pay effective rates above 40%
Maxing out 401(k) contributions but missing defined benefit plans that allow $200K–$300K+ annually
Operating as a sole proprietor or single-member LLC instead of an optimized multi-entity structure
Treating expensive medical equipment as long-term assets instead of using Section 179
Not leveraging practice real estate ownership through a separate entity
These are the strategies we evaluate and deploy for every medical practices client — tailored to your specific numbers.
Defined benefit plans — contribute $200K–$300K+ per year tax-deductible, far beyond 401(k) limits
Cash balance plans layered with 401(k) for combined contributions exceeding $350K annually
Section 179 on diagnostic equipment, imaging machines, dental chairs, and office build-outs
Entity restructuring: separate the practice (S-Corp) from real estate (LLC) and equipment (leasing entity)
Cost segregation on owned medical office buildings — reclassify specialized medical infrastructure
How we turned a $217K tax bill into over $1M in cumulative savings.
Depending on your age, income, and plan design, defined benefit plan contributions can range from $150,000 to over $300,000 per year — all tax-deductible. Combined with a 401(k), you can shelter $350,000+ annually. This is the single most powerful tax tool for high-income practice owners over 40.
For most medical practices doing $1M+, an S-Corp avoids the double taxation of a C-Corp while allowing you to split income between salary (subject to payroll tax) and distributions (not subject to payroll tax). However, C-Corps can make sense in specific scenarios involving retained earnings or fringe benefit planning.
Yes. Medical offices have significant components that qualify for accelerated depreciation — specialized plumbing, electrical for diagnostic equipment, built-in cabinetry, and medical gas systems. A cost segregation study on a $1M+ medical office typically generates $100K–$200K in first-year deductions.
Both are employer-funded retirement plans with high contribution limits. A traditional defined benefit plan promises a specific retirement benefit; a cash balance plan expresses benefits as a hypothetical account balance. Cash balance plans are often easier to administer and explain to employees. Many practices use both together for maximum tax shelter.
Most retirement plans require some level of employee coverage, but the design can be structured to maximize benefits for the owner while minimizing employer costs for staff. Cross-tested plans, for example, can allocate a much higher percentage of contributions to the owner.
Book a free review and we'll identify the medical practices-specific opportunities hiding in your numbers.
Tell us about your business and we'll identify every savings opportunity available to you.