Healthcare Accountants Know the Pressures You Face
Running a healthcare or service-based practice is demanding - patients, staff, billing cycles, reimbursements, and the constant pressure of keeping operations afloat. And when year-end arrives, most owners are left wondering whether they’re overpaying taxes, missing deductions, or simply reacting too late. You’re not alone. This is one of the most common challenges we hear from healthcare practice owners.
The good news? With the right guidance from dedicated accountants for healthcare practices and experienced healthcare CPAs, you can take control of year-end planning. A few simple, strategic moves before December 31st can often save providers $5,000–$15,000. You don’t need complicated loopholes or advanced tax maneuvers. Just timely, proactive decisions.
In this article, we’ll walk through a 5-step year-end financial checklist designed specifically for healthcare practices, including strategies around S-Corp salary planning, retirement contributions, deductible timing, cash flow projections, and entity structure. We’ll also link to additional resources on cash vs. accrual accounting, practice bookkeeping, and tax planning.
By the end, you’ll know exactly what to do to finish 2025 strong, and reduce your tax bill with confidence.
Enjoy our 5-Step Year-End Financial Checklist below!
1. Review Your S-Corp Salary With a Healthcare CPA
The Issue: Get this wrong, and you’ll either overpay payroll taxes or attract IRS scrutiny.
What to Check:
Have you paid yourself "reasonable compensation"? The IRS requires S-Corp owners to pay themselves a reasonable salary before taking distributions. For most healthcare practice owners, "reasonable" typically ranges from $80K-$150K depending on your specialty, location, and practice revenue. However, this is illustrative only and should be benchmarked to your specific situation.
If your salary is too low, you risk IRS scrutiny. Too high, and you overpay payroll taxes. Benchmark "reasonable compensation" to your specialty, location, duties, and revenue.
If your salary is too low, you risk IRS scrutiny. Too high, and you overpay payroll taxes. Benchmark “reasonable compensation” to your specialty, location, duties, and revenue. If you have any doubts, this is something a healthcare CPA can help you assess accurately.
Action Before Dec 31:
Review your total compensation for the year. If you’re significantly off, adjust your December payroll. If you’re unsure what’s “reasonable” for your situation, this is worth a conversation with your tax advisor or a CPA medical specialist who works with healthcare practices.
Potential Savings: $3,000-$8,000 annually in payroll taxes when properly structured.
2. Maximize Retirement Contributions With Support From Healthcare Accountants
This is often the single largest tax deduction available to practice owners, and the most underutilized.
What to Check:
For SEP-IRA
- Contribution limit: Up to 25% of compensation (or 20% of net self-employment income), max $70,000 for 2025
- Deadline: You can actually contribute until your tax filing deadline (plus extensions)
- Best for: Solo practices or those with few employees
For Solo 401(k)
- Contribution limit: $23,500 employee deferral + up to 25% profit sharing (total max $70,000 for 2025, or $77,500 if age 50-59, or $81,250 if age 60-63)
- Deadline: Must be established by December 31, but can fund until tax deadline
- Best for: Higher earners who want to max out contributions
For Cash Balance Plans
- Contribution limit: $100K-$300K+ depending on age and income
- Deadline: Must be established by December 31
- Best for: High-earning practices looking to shelter significant income
Action Before Dec 31:
Calculate your maximum allowable contribution, determine which plan type makes sense for your situation, and if you don't have a retirement plan, set one up now. Solo 401(k)s can be established quickly. Make your contributions, or at least establish the plan if you need more time to fund it. If you’re unsure which path is best, our Flychain Taxes healthcare accountants can help you run the numbers and choose the right plan.
Note: 2025 introduced enhanced catch-up contributions for those ages 60-63. This special catch-up is $11,250 (the greater of $10,000 or 50% above the standard catch-up, inflation-indexed). If you're in this age range, you can contribute significantly more.
Potential Savings: $15,000-$50,000+ in tax deductions depending on your contribution level.
3. Accelerate Deductions & Defer Income (A Classic CPA Medical Strategy)
The Issue: When you recognize income and expenses matters just as much as how much income and expenses you have.
Accelerate Deductions (Pay Before Dec 31):
- Equipment purchases for your practice
- Software subscriptions and annual renewals
- Professional development and continuing education
- Office supplies and small equipment
- Business mileage (2025 rate: 70¢/mile)
- Estimated state tax payments (if you itemize)
- Charitable contributions
Defer Income (Push to January if Possible):
- Delay sending invoices that won't be paid until January anyway
- Push elective procedures or high-ticket services to early January
- Defer year-end bonuses to yourself until January (cash flow permitting)
Section 179 & Bonus Depreciation:
If you're purchasing equipment, you may be able to deduct the entire cost in 2025 rather than depreciating over time:
- Section 179 (2025): Deduct up to $2,500,000 of qualifying equipment; phase-out begins at $4,000,000
- Bonus Depreciation: 100% first-year write-off for qualified property acquired and placed in service after January 19, 2025 (40% applies to property acquired before January 20, 2025)
- Assets must be purchased AND placed in service by December 31st
Action Before Dec 31:
Review your P&L and identify expenses you were planning for early 2026 - pay them in 2025 if it makes sense. Review any major equipment purchases you've been considering. With Section 179 limits at $2.5M for 2025, this is an especially strong year for equipment investments, and consulting a CPA medical advisor can ensure you’re capturing the full benefit.
Potential Savings: $2,000-$10,000+ depending on your effective tax rate and spending.
4. Get Cash Flow Projections Right Before Tax Season
The Issue: The worst financial surprise isn't a high tax bill, it's a high tax bill you can't afford to pay.
What to Check:
- Do you know what you'll owe in taxes when you file?
- Have you made adequate estimated tax payments?
- Do you have the cash set aside to pay your tax bill in April?
- What's your cash position heading into Q1 2026 (typically the slowest quarter for many practices)?
Action Before Dec 31:
Run a tax projection for 2025 (or have your accountant do this), calculate your total tax liability (federal, state, SE tax if applicable), and compare it to estimated payments you've already made. Set aside the difference in a separate account. Make your Q4 estimated payment by January 15, 2026.
Bonus: Build your 2026 quarterly estimated tax payment schedule now. Calculate what you should pay each quarter based on projected 2026 income. Bonus points if your accountant is a specialized healthcare CPA!
Why This Matters: Underpayment penalties, cash crunches, and financial stress are all avoidable with basic planning.
5. Review Your Practice Entity Structure With Accountants for Healthcare
The Issue: Many independent practice owners are operating under a structure that made sense five years ago but is costing them thousands today.
What to Check:
- Are you still a sole proprietor with growing income? (You might benefit from an S-Corp election)
- Did your practice revenue change significantly this year? (Your structure should scale with you)
- Are you planning to bring on partners? (Your entity structure affects this)
- Have state tax laws changed? (Some states have become more or less favorable to certain structures)
Action Before Dec 31:
If you're considering an S-Corp election for 2026, start the process now (there's a 75-day deadline after the start of the year). If major structural changes are needed, begin planning in December for January 1 implementation. For 2025, ensure you're maximizing the benefits of your current structure.
Note: You typically can't change your entity structure retroactively for the current year, but December is the perfect time to plan for 2026 optimizations.
Potential Savings: $3,000-$12,000+ annually for practices moving from sole proprietor to S-Corp status.
Ready to Take Action?
Here's how to close 2025 strong and enter 2026 ahead:
Step 1: Download the Complete Checklist
Get the full 2025 Year-End Checklist PDF with detailed action items, deadlines, worksheets, and additional strategies beyond the five core areas covered in this article.
Download the 2025 Year-End Checklist and save up to $10K in taxes
Step 2: Book Your Free Strategy Session
Schedule a complimentary tax-planning session with a Flychain Taxes advisor.
Schedule your free tax planning session
Step 3: Build Your Action Plan
Use the checklist + Flychain platform + healthcare CPA support to create your personalized year-end strategy before December 31st.
Need Help With Your Year-End Planning?
Flychain Taxes, powered by Uprise, is designed specifically for healthcare and service-based independent practices. Our accountants for healthcare practices understand the unique challenges providers face. From delayed reimbursements and multi-location complexity to regulatory expenses and staff costs, our healthcare accountants understand it all.
With Flychain Taxes, independent practices can now access:
- Integrated tax filing for both business and personal returns
- Proactive tax planning with personalized quarterly estimates
- Year-round advisory support from CPAs and CFPs who understand practice finances
- Practice-specific benchmarking to ensure your compensation and structure are optimized
We handle the complexity so you can focus on what you do best: taking care of clients and growing your practice.
Important Note: This blog is intended for educational purposes only and does not constitute tax, financial, or legal advice. Practices should consult a licensed CPA, tax advisor, or attorney for guidance tailored to your structure, state, specialty, and individual circumstances. Tax laws and contribution limits are subject to change. Section 179 and bonus depreciation treatment vary by state conformity; confirm state treatment with your CPA.
Year-End Planning Support from Healthcare Accountants
Year-end financial planning doesn’t need to feel overwhelming, especially when you have support from healthcare accountants who understand your day-to-day challenges. By reviewing your S-Corp salary, optimizing retirement contributions, accelerating deductions, shoring up cash flow, and re-evaluating your entity structure, you can confidently save thousands and enter 2026 in a stronger financial position.
Your next step is simple: download the complete 2025 Year-End Checklist or book a free tax strategy session with Flychain. Whether you’re already using the Flychain platform or exploring solutions built for healthcare operators, we’re here to help you reduce stress, avoid surprises, and keep more of what you earn.
Finish the year strong. Your future self (and your practice) will thank you.
