Year-End Tax Checklist for Medical Practice Owners: 8 Moves Before December 31st

By Brian Giesecke, CPA/EA | Giesecke Advisory

It's that time of year. December is coming. And once January 1st hits, most year-end tax planning strategies are off the table for medical practice owners.

Here's what to review before the clock runs out.

1. Do You Know Your Year-to-Date Profit?

What's your estimated profit for the year? Not a guess — an actual projection.

If your books aren't current, catch up. You can't plan without knowing where you stand.

2. Are Your Retirement Contributions Maxed Out?

Are you on track to max out your plan?

Key deadlines and limits:

• Solo 401(k) employee contributions: December 31st. The 2024 employee deferral limit is $23,000 ($30,500 if age 50+), plus employer profit-sharing up to $69,000 total ($76,500 if 50+)
• SEP-IRA contributions: Due by your tax filing deadline (including extensions), but the plan must be established by December 31st. Contribution limit is 25% of net self-employment income, up to $69,000
• Cash Balance Plans: Per actuary requirements — can shelter $100,000-$300,000+ depending on age

If you're not maxing out and have cash flow, consider accelerating contributions.

3. Should You Accelerate Equipment Purchases?

Any equipment you've been considering?

Buy before December 31st = deduct this year under Section 179, which allows medical practices to deduct up to $1,220,000 (2024 limit) in qualifying equipment in the year it's placed in service. Bonus depreciation at 60% (2024 rate) is also available for new and used equipment.

Buy after January 1st = deduct next year.

Don't buy things you don't need. But if you were planning to buy anyway, timing matters.

4. Is Your S-Corp Salary "Reasonable"?

Have you paid yourself enough to be "reasonable"?

The IRS requires S-corp owner-employees to take a reasonable salary before distributions. There's no fixed formula, but compensation should reflect what you'd pay someone to do your job. December is a good time to adjust if needed. Coordinate with your final payroll.

5. Are Your Estimated Tax Payments on Track?

Are you on track to avoid penalties?

The Q4 estimated payment (IRS Form 1040-ES) is due January 15th. Make sure you're not short — review your safe harbor status before year-end.

6. Can You Shift Income or Expenses Across the Year-End?

Cash-basis practices have flexibility:

• Can you defer income to next year?
• Can you accelerate expenses into this year?

Legitimate timing decisions are fair game.

7. Is Your Documentation Audit-Ready?

Is everything in order?

• Mileage log current? (The 2024 IRS standard mileage rate is $0.67/mile for business use)
• Home office expenses documented? (Regular and exclusive use test under IRC Section 280A)
• Receipts organized for all deductions over $75?

Clean up now while it's fresh.

8. What Should You Set Up for Next Year?

What do you want to do differently?

If you're considering S-corp election (IRS Form 2553, due March 15th) or a new retirement plan, many deadlines are early in the year.

Start thinking now so you can act in January.

Frequently Asked Questions

What's the single most impactful year-end tax move for practice owners? For most independent medical practice owners, maximizing retirement contributions delivers the biggest dollar-for-dollar tax savings. A Solo 401(k) with profit-sharing can shelter up to $69,000 (2024), and adding a Cash Balance Plan on top can push total tax-deferred savings to $200,000+ depending on your age and income.

What if I can't complete everything on this checklist before December 31st? Prioritize in this order: retirement contributions (hard deadline), equipment purchases (must be placed in service by 12/31), and income/expense timing. Some items like SEP-IRA contributions can extend to your filing deadline, giving you more runway.

Key Takeaways

• December 31st is the hard deadline for most year-end tax strategies — Solo 401(k) employee deferrals, Section 179 equipment deductions, and income/expense timing decisions all lock in at year-end
• Section 179 allows up to $1,220,000 in equipment deductions (2024), and bonus depreciation adds another layer at 60%
• Retirement contributions are the most powerful lever — Solo 401(k) total limit is $69,000 ($76,500 if 50+), SEP-IRA allows 25% of net income up to $69,000
• S-corp salary must be "reasonable" — adjust before your final December payroll if you've underpaid yourself
• Start planning for next year now — S-corp election (Form 2553) is due March 15th, and new retirement plans take time to establish

Your Next Step

Schedule 30 minutes this week. Pull your numbers. Walk through this checklist.

Even if you don't act on everything, you'll know where you stand.