Entity design for a cash-pay practice, equipment and buildout timing, the practice building, and a retirement plan that fits a small team.
A chiropractic practice is a small business with a clinician at the center: high owner involvement, a lean team, equipment and buildout costs up front, and income that grows with the schedule. Most practices are set up by the same vendor package that sold the tables and the software, and the tax side never gets revisited.
The planning that changes the bill is the same set of decisions every year. The entity election and a reasonable salary decide self-employment tax. Tables, decompression and laser equipment and the buildout are timed under section 179 and bonus depreciation. The building, when you are ready to own it, sits in its own entity and leases to the practice. A SIMPLE IRA is replaced by a 401(k) with profit sharing or, for an owner over 45, a defined benefit plan sized to the practice.
We review three years of returns, the equipment schedule and the lease, model the alternatives, and write the plan with a purchase and filing calendar.
What we typically see: A SIMPLE IRA doing the work of a real plan. Equipment bought whenever the vendor called. Rent paid to a landlord instead of to yourself. An owner salary set by the payroll company.
Each one is modeled against your numbers and written into the blueprint with the documentation it needs.
We had a SIMPLE IRA because that is what the payroll company offered. The plan design tripled what I could put away.
Usually once net income is comfortably above what a reasonable salary would be. The model shows where the payroll cost and the self-employment tax saving cross for your numbers.
Generally yes, through section 179 or bonus depreciation, subject to limits and to the year's income. The timing is the planning.
If the practice is stable and the numbers work, owning through a separate entity and leasing to the practice turns rent into depreciation and builds a second asset.
Yes. A 401(k) with profit sharing, or a cash balance plan for an older owner, can be designed to contribute far more for you while covering staff within the rules.
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