You're Not Just A Doctor.
You're A CEO.
Owning the practice means owning the equity and the tax liability. We help practice owners implement advanced defined benefit plans and entity structures that standard CPAs miss.
A guide by Taxstra Tax & Accounting — CPA-led tax strategy for business owners
The Burden of Ownership
The tax problems unique to physician-owners
Running a private practice is hard. You deal with declining reimbursements, rising staff costs, and administrative burnout. The last thing you need is a surprise tax bill.
Many practice owners are structured incorrectly (Sole Prop vs S-Corp vs Partnership) or are "bunching" income in ways that spike their tax bracket. They often miss out on the "Big deductions" available only to employers.
Practice Owner Pitfalls
The most expensive mistakes physicians make as business owners
- Trapped in a C-Corp creating double taxation on exit
- Paying yourself 100% of profit as W-2 salary (overpaying Payroll Tax)
- Ignoring Cash Balance Plans (missing out on $100k+ deductions)
- Failing to employ family members legally for tax shifting
- No buy-sell agreement funding strategy
Advanced Strategies for Practice Owners
Leverage your business entity to build personal wealth
Cash Balance Plans
The 'Super 401k'. Add a defined benefit layer on top of your 401(k) to stash away an additional $100k-$300k+ pre-tax annually.
Entity Optimization
S-Corp vs Partnership? We analyze your specific situation. S-Corps save payroll tax, while Partnerships offer flexible allocation of income and debt basis.
Hiring Family
Hire your children (age 7+) for legitimate tasks. Their income is deductible to the practice and tax-free to them (up to $14,600). Use it to fund Roth IRAs.
Read the guide →The 'Augusta' Rule
Rent your home to your practice for monthly board meetings (up to 14 days/year). The rent is a business deduction and 100% tax-free income to you.
PTET (SALT Cap Bypass)
Most states allow S-Corps/Partnerships to pay state tax at the entity level, bypassing the $40,000 personal SALT deduction cap entirely. Especially valuable for high earners whose cap phases down (MAGI above $500,000) or who owe more than $40,000 in state taxes.
Exit Planning
Selling to private equity or a hospital? Structure matters. We look at personal goodwill vs corporate assets to minimize the tax hit on the biggest check of your life.
The Cash Balance Accelerator — Deep Dive
The most powerful tax shelter for high-earning physician-owners
If you are consistently maxing out your 401(k) ($69k) and still have high tax liability, a Cash Balance Plan is the next logical step.
It acts like a pension. The contribution limits are age-dependent but can exceed $250,000 per year for owners in their 50s.
This is a massive "Above the Line" deduction. A $200k contribution could save you nearly $80,000 – $100,000 in taxes immediately.
Age 55 Owner
*Requires actuarial setup and consistent funding for 3-5 years. For illustration only.
Our Process
Three steps to optimizing your practice
Entity Diagnostic
Are you overpaying payroll taxes? Are your operating agreements protecting you? We check the foundations first.
Compensation Modeling
We calculate 'Reasonable Compensation' to defend against audits while minimizing FICA taxes. This is the art of the S-Corp.
Benefit Design
We layer on benefits (Health, 401k, Cash Balance) that benefit the owners disproportionately to the staff, using 'Cross-Testing' rules.
Practice Owner FAQ
Run Your Practice Like A Business.
Talk to a Taxstra CPA about your income level and get a custom tax optimization plan.
Find Out What You're Overpaying in Taxes
Book a free 30-minute call to walk through your situation. We'll tell you exactly how our CPA-led team can help — and whether we're the right fit.