Running a healthcare practice comes with unique financial considerations, especially when it comes to taxes. Doctor’s offices, clinics, and other medical practices can reduce their tax liability and improve profitability by implementing smart, proactive strategies. Here are several effective tax-saving approaches tailored for healthcare providers.
1. Maximize Accelerated Section 179 Deductions
Medical practices often invest heavily in equipment such as diagnostic machines, computers, and office furnishings. For 2025, Bonus Depreciation is restored at 100% and Section 179 of the IRS tax code allows you to deduct the full purchase price of qualifying equipment in the year it was placed into service, rather than depreciating it over time. This can result in significant immediate savings and improved cash flow.
2. Leverage the Qualified Business Income Deduction (QBI)
Depending on your entity structure and taxable income, your medical practice may qualify for the Qualified Business Income (QBI) deduction, with income limitations. This provision allows eligible practices to deduct up to 20% of qualified business income, lowering taxable income and reducing overall tax liability.
3. Deduct Continuing Education and Professional Development
Doctors and healthcare professionals are required to keep their knowledge current through continuing education and professional certifications. Fortunately, these expenses—including travel to conferences, training programs, and required licensing fees—are typically deductible business expenses. Learn more about maximizing deductions on our Tax Planning Services page.
4. Review Retirement Plan Options
Healthcare practices can save on taxes while building wealth for the future by contributing to retirement plans. Options like SEP IRAs, SIMPLE IRAs, or 401(k) plans allow physicians and staff to defer income, reducing taxable earnings today while investing for retirement. Practices with multiple employees may also benefit from offering retirement plans as an employee retention tool. See how our Business Advisory Services can support strategic planning for long-term growth.
5. Consider a Cost Segregation Study for Real Estate
If your practice owns its building, a cost segregation study can accelerate depreciation on certain assets such as lighting, flooring, and fixtures. This strategy allows you to take larger deductions sooner, improving short-term cash flow while maintaining compliance with IRS regulations.
6. Utilize HSAs
Offering Health Savings Accounts (HSAs) provides tax advantages for both the practice and employees. Employer contributions are tax-deductible, while employees can use pre-tax dollars to cover medical expenses. These arrangements reduce payroll taxes and provide meaningful benefits for staff.
7. Stay Ahead of State and Local Tax Exemptions
Healthcare practices may qualify for specific state or local tax exemptions on items such as medical equipment, prescription drugs, or energy-efficient upgrades. Regularly reviewing available credits and exemptions ensures your practice is not leaving money on the table. Our Accounting & Assurance Services team can help identify overlooked opportunities.
8. Work with a Healthcare-Focused CPA
Healthcare tax planning is highly specialized. Partnering with a CPA experienced in the healthcare industry ensures you identify all available deductions, credits, and savings opportunities. They can also help with structuring your practice for optimal tax efficiency, whether you operate as a sole proprietor, partnership, S corporation, or C corporation.
By proactively implementing these strategies, doctor’s offices and healthcare practices can reduce their tax burden, free up capital for growth, and strengthen long-term financial health. For personalized guidance and healthcare-focused tax planning, explore our Tax Planning Services and connect with the professionals at HBL CPAs to help your practice thrive.