The Bottom Line

Taxes can be one of your largest expenses. You're paying taxes on income, property, and services, it adds up and quickly and eats away at your margins. The good news is there are 7 powerful tax reduction strategies specifically designed for medical professionals and practice owners. They can significantly reduce your tax burden, potentially saving you five to six figures annually.

Whether you choose one or all of these strategies, the effort to implement them is well worth it. AA&T Group specializes in medical practice tax reduction, having worked with surgeons, veterinarians, dentists, chiropractors, and more. We saved our clients collective millions, and we can do the same for you.

The Strategies

01. Small Business Pass-Through Deduction

The 2018 Tax Cuts and Jobs Act created a significant new tax deduction to support small businesses. It is a pass-through deduction offered to all small business owners who file their business income on their personal tax returns. The deduction is limited according to total income. In 2022 many Medical Practice Owners with their own business qualified for the new tax deduction if they had a taxable income between $170,050 and $220,050 (between $340,100 and $440,100 for joint filers). For the 2023 tax year levels will be adjusted for inflation. You may be eligible for these deductions which could translate to tens of thousands of dollars back in your pocket.

02. Retirement Savings

The IRS allows you to claim deductions for retirement savings contributions each year. The money you put into your 401(k) or another eligible retirement fund can then be deducted from your taxable income. For the 2023 tax year, you can deduct up to $22,500 in contributions. People over the age of 50 can deduct additional catch-up contributions up to $7,500, and some plans even allow significantly more. But limits vary depending on the kind of retirement account you utilize.

03. Licensing Fees

Regular expenses required for doing your job are usually eligible for deduction as a legitimate business expense. That means you can claim licensing fees and any other examination costs you have to pay to keep your credentials up to date.

04. Malpractice Insurance

Every medical professional needs insurance to help cover unexpected legal costs that might come up. Fortunately, those insurance premiums are part of the cost of doing business, which means you can claim them as deductible business expenses.

05. Professional Fees and Subscriptions

Continuing education and collaboration with other Medical Practice Owners are essential parts of your work, so related costs are naturally also deductible. Deduct membership fees for any professional organizations you belong to, and don’t forget to report and claim deductions for any subscriptions you have for professional publications related to medical science.

06. Charitable Contributions

You can only claim deductions for charitable contributions if you itemize your personal deductions instead of claiming the IRS standard deduction. For many individuals, it’s not worth itemizing deductions. However, Medical Practice Owners who make a charitable “accredited” donation, can deduct significantly more and save even more on federal and state taxes.

07. Health Insurance Premiums

If you do not have an employer sponsored plan and pay for your own health insurance premiums, you can deduct the healthcare premiums on your taxes as a business expenses. Employers typically deduct those premiums from income without employees ever seeing that money, so many Medical Practice Owners can effectively do the same and remove those premiums from income before it gets taxed.

Navigating the intricacies of tax planning is not for the faint of heart. Attempting these strategies on your own or with an accountant who isn't a tax expert can expose your business to significant risks. But here's the good news: AA&T Group is here to help you navigate these treacherous waters. We are not just experts; we are your partners in success. Our team has the knowledge, experience, and technical acumen required to implement these tax-saving strategies effectively.

We will save you tens or even hundreds of thousands of dollars.

By collaborating with AA&T Group, you're not just investing in our services; you're investing in your financial security. It's not just about reducing your tax bill; it's about securing your business's future and unleashing its growth potential.