When Should Medical Practice Owners Hire a Tax Planner?

By Brian Giesecke, CPA/EA | Giesecke Advisory

Do you feel confident that you're not leaving money on the table as a medical practice owner?

That's the real question. Not "do I need a tax planner" — but "am I confident that I'm handling taxes well?"

If the answer is a clear yes, you're probably fine.

If the answer is "I'm not sure"... that's worth exploring.

Who Doesn't Need a Tax Planner?

Let's start here. Because tax planning isn't for everyone.

If you're just starting out... income is modest... situation is simple — you're probably fine with good tax prep.

If you're a W-2 employee with no side business, your tax planning happens through HR. Retirement contributions. HSA. Benefits elections. That's your lever.

If your income is under $100,000 and you don't have complicated assets or multiple entities... the opportunities are limited.

Basic compliance is enough for a lot of people.

Tax planning becomes valuable when there's real money at stake.

What Are the Signs a Practice Owner Needs Tax Planning?

Significant income. Once you're consistently above $150,000-$200,000 in profit, you're in the 32% federal tax bracket (for single filers, the 32% bracket starts at $191,950 in 2024). The stakes are high enough that planning often pays for itself.

At $300,000? Definitely worth it. At $500,000? You're in the 37% bracket and almost certainly leaving serious money on the table without it.

Complexity. Do you have an S-corp (filing Form 1120-S)? Multiple entities? Real estate? A side business? Complexity creates opportunity — and risk. A good planner helps coordinate across all of it.

Surprise tax bills. Did you get hit with something much larger than expected? Did you find out in April that you owed $50,000 you hadn't planned for? That's a sign something's missing.

Major changes. Starting a practice. Selling a practice. Bringing on a partner. Getting divorced. Big changes have big tax implications. And the decisions you make early often lock in outcomes for years.

You're asking questions. If you're reading articles like this one... wondering if you're doing things right... that curiosity is telling you something.

What's the ROI of Tax Planning for Practice Owners?

Here's how I think about it.

At $300,000 in income, you're in the 32-35% marginal federal bracket. Add self-employment tax at 15.3% on earned income and state taxes, and your effective marginal rate can exceed 45%. If a planner identifies $30,000 in deductions or restructuring savings... that's $10,000-$13,500 back in your pocket.

Planning fees for a medical practice typically run $3,000-$10,000 annually, depending on complexity.

That's a clear return. Not guaranteed — but the opportunity is usually there if the income is there.

What to Look For in a Tax Planner for Your Medical Practice

If you decide to find someone, here's what matters:

Industry experience. Do they work with medical practices? Do they understand your world?

Proactive approach. Will they reach out before year-end, or just process your return in March?

Clear communication. Can they explain strategies in plain language? If you leave confused, that's a problem.

Reasonable fees. Planning isn't cheap. But it should pay for itself. Be cautious about anyone promising unrealistic savings.

A good fit. You'll share a lot of financial information. Make sure you trust them and feel comfortable asking questions.

A Simple Test for Whether You Need Tax Planning

Here's a question worth asking yourself:

When was the last time someone talked to you — before year-end — about ways to reduce your tax bill?

Not in April, after everything was locked in. Before December 31st.

If that conversation isn't happening... there might be a gap.

Frequently Asked Questions

What's the difference between a tax preparer and a tax planner? A tax preparer files your return — they report what already happened. A tax planner works with you throughout the year to make strategic decisions that reduce your future tax liability. Tax preparation is backward-looking compliance. Tax planning is forward-looking strategy. Most practice owners need both, but many only have the first.

When is the best time of year to start working with a tax planner? Ideally, engage a planner by Q2 or Q3 (June-September) so there's time to model scenarios and execute strategies before December 31st. Starting in January is fine for structural changes like S-corp elections (Form 2553, due March 15th). Starting in April — after the year is over — means most planning opportunities are already gone.

Key Takeaways

• Tax planning typically pays for itself once practice profit exceeds $150,000-$200,000 — at that level, the marginal federal rate is 32%+, and strategies like S-corp structuring, retirement plan optimization, and income timing can yield significant savings
• At $300,000+ in income, tax planning ROI is clear — planning fees of $3,000-$10,000 often generate $10,000-$50,000+ in tax savings through entity structuring, retirement contributions, and deduction optimization
• The combined marginal tax rate for self-employed practice owners can exceed 45% when you add federal income tax, self-employment tax (15.3%), and state income tax
• Surprise tax bills are a red flag — if you owed significantly more than expected in April, it means proactive planning wasn't happening
• Engage a tax planner by mid-year — most strategies require action before December 31st, so starting by Q2 or Q3 gives adequate planning runway

The Bottom Line

Tax planning isn't for everyone.

But for practice owners with significant income and some complexity... the ROI is usually clear.

If you're not sure where you stand... start by asking the question.

And if you'd like a framework for thinking through it, I put together a Tax Planning Checklist — a simple one-pager covering the strategies worth reviewing every year.