Entity design for private practice groups, defined benefit plans, and malpractice-conscious tax structures built for clinicians running their own practice.
A practice owner earns like an executive and is taxed like a small business, with the worst of both: high ordinary income, a group retirement plan designed for the lowest common denominator, and an entity chosen by whoever set up the practice. The result is a household at $1M or more paying an effective rate nobody chose.
The planning that changes it is specific to how practices are built. A custom defined benefit plan layered on the group 401(k) can move six figures per partner out of the current year. Owning the building through a separate entity and leasing it to the practice turns rent into depreciation. Equipment purchases, management service organizations, and the structure of partner buy-ins and buy-outs each carry a tax outcome that is decided before the paperwork is signed.
We work with the practice manager and the existing CPA, model the plan designs against the partner census, and write the blueprint so each partner knows what applies to them.
What we typically see: Partners maxing a 401(k) and calling it a retirement plan. The building owned personally or not at all. A buy-in structured by the lawyer without a tax model. Income landing in a single high bracket every year.
Each one is modeled against your numbers and written into the blueprint with the documentation it needs.
Two of us were maxing a 401(k) and assumed that was the ceiling. The plan design moved six figures each off the table in the first year.
Not for the partners only, but the plan can be designed so the partners receive the large majority of the contributions while staff receive a compliant share. The census drives the design.
Usually a separate entity owned by the partners should, with a lease to the practice. That separates the asset from practice liability and creates depreciation that the practice's rent funds.
Health is a specified service trade, so the deduction phases out above the income thresholds. Structure and income sourcing sometimes preserve part of it; the model shows whether it is worth pursuing.
Yes. The plan is written to be implemented alongside them, or by us if you prefer one firm handling strategy, accounting and filing.
RSVP for the Asset Accumulation Formula Masterclass. One live session on the strategies residential developers use to keep more of what they build, and how to tell whether they apply to you.
Have one specific question instead? Book a Strategy Session with Jose.