The tax and financial quirks
- NYC does not recognize the federal S-election. A Manhattan or Queens medical or dental practice operating as a federal S-corp still pays entity-level city tax under the General Corporation Tax, at 8.85 percent of entire net income allocated to the city. Most firms outside the five boroughs quietly miss this. Firms inside the five boroughs sometimes double-count it.
- Reasonable compensation is never what an online calculator says. For an owner-dentist earning $800K through a PLLC, the line between W-2 wages and S-corp distribution is a documented judgment call. The IRS looks at the role the owner actually performs, comparable hiring data for a replacement, and the time split between owner-level work and clinical production. We build it bottom-up with a written memo that sits in the file.
- Defined benefit and cash balance plans are the largest deduction nobody uses. A 50-year-old owner-physician with a defined benefit or cash balance plan stacked on a 401(k) can push total pre-tax contributions past $250,000 a year. Most CPA firms stop at the 401(k) because the DB conversation requires coordination with an actuary. We do that coordination as part of the fractional CFO work.
- Practice acquisitions amortize over 15 years. Section 197 intangibles (goodwill, patient list, covenant not to compete) are amortizable straight line over 180 months. The allocation of the purchase price across tangible assets, intangibles, and working capital is the biggest controllable lever in any acquisition tax posture. We model that allocation before the purchase agreement is signed, not after.
- Multi-location and group practices layer PTET elections across entities. Group practices with tiered ownership (a holdco and operating LLCs) require PTET decisions at each layer, with credit allocations that actually match the operating agreement. The allocation is done correctly in our files before K-1s ever leave the firm.
How we engage medical and dental practices
Most medical and dental practices start with tax strategy and preparation. From there, engagements deepen based on the complexity of the business: quarterly advisory for year-round strategy, embedded fractional CFO for multi-entity or growth-stage operations, entity restructuring when the business crosses natural thresholds. The engagement matches the need, not a template.
Where AI comes in
The most valuable AI use case in a medical or dental practice today is patient communication. Appointment reminders, post-visit follow-up, billing clarification letters, internal clinical documentation. The operational cost of a front desk writing the same follow-up letter two hundred times a month is non-trivial, and AI tools can compress that work without compromising the voice of the practice. We help identify where it fits, which tools handle HIPAA-adjacent workflows cleanly, and how to train the front desk to use the system without fighting it.
We do not recommend AI for clinical decisions. Ever. That is a line we do not cross.
Who this fits
Single-owner practices generating $1M to $5M in annual collections. Two to five doctor group practices with combined collections of $3M to $15M. Multi-location dental with a holdco structure and three or more operating entities. Owner-physicians considering an associate buy-in or a full practice sale in the next five years.
A solo practitioner who simply needs a return filed is welcome here too, and there is almost always more planning available than a single filing captures. The more complex the practice, the more that strategy compounds, which is where we are strongest.
First engagement
A free 30-minute call. We review your prior three returns, your current compensation structure, and your retirement posture. If the fit is right, we scope the engagement with a three-month onboarding that includes a reasonable comp memo, a PTET analysis, a retirement plan review, and a projection for the current year. From month four, the steady-state monthly rhythm begins.
The difference between a practice that nets $400,000 and a practice that nets $475,000 on the same collections is almost always a coordination problem between wages, retirement, and entity tax. We solve the coordination problem.