Accounting for Fresno Medical & Dental Practices
Medical & Dental
Physicians, Dentists & Specialty Practices in Fresno, CA
A medical or dental practice is two businesses at once: clinical care, and a capital-intensive small business with payroll, expensive equipment, and an owner in a high tax bracket. Tax planning matters more here than in almost any other industry, because the marginal dollar is taxed so heavily.
Harlan Willow Accounting Group works with practices across Fresno, Clovis, and the Central Valley, pairing monthly bookkeeping and accounting with business tax planning and personal tax planning for the owners.
Retirement Plans Are the Largest Lever Most Practices Underuse
Health is a specified service trade or business. For 2025 that means the 20% qualified business income deduction phases out completely above $494,600 of taxable income for joint filers and $247,300 otherwise, with the phase-in starting $100,000 below each. Most established practice owners are above that line, so planning shifts to the levers that still work at high income.
The largest is usually retirement plan design, and most practices stop at a SEP or a solo 401(k) when the options worth evaluating include a safe harbor 401(k) with profit sharing, new comparability or cross-tested profit sharing that allocates more to owners where the staff census allows, and a cash balance plan layered on top — which for the right practice can multiply the deductible contribution well beyond defined contribution limits.
Which one fits depends on your income, your staff census, their ages, and how long you plan to keep practicing. It is a numbers exercise, it needs running before year end, and it sits squarely inside business tax planning rather than tax preparation.
- Full Monthly Close: Reconciliations, profit & loss, balance sheet, and cash flow on a set schedule, so you are never guessing at how the practice is doing.
- Production & Collection by Provider: What each provider produced against what actually got collected — the gap is where practice profitability quietly leaks.
- Payroll & Benefits Reconciliation: Staff wages, employer taxes, and benefit costs tied out monthly, including retirement plan contributions.
- Overhead Benchmarking: Overhead as a percentage of collections, tracked over time so cost drift is visible before it becomes a problem.
- Equipment & Depreciation Schedules: Chairs, imaging, lasers, sterilizers, and buildout tracked properly, with federal and California treatment kept separate.
- CPA Tax Strategy Check-Ins: Estimated payments, retirement contributions, and equipment timing reviewed through the year rather than reconstructed in April.
This page is general information, not advice for your specific situation. Tax figures shown are current for the 2025 tax year and several are indexed annually. We coordinate with your health care attorney on legal structure questions.
EQUIPMENT & STRUCTURE
Equipment, Buildout & Practice Transitions
Section 179 Expensing
For tax years beginning in 2025 you can expense up to $2,500,000 of qualifying property, reduced dollar for dollar once purchases exceed $4,000,000. Generous, but limited by taxable income — which is where it gets interesting.
100% Bonus Depreciation
Bonus depreciation was restored to 100% for qualifying property acquired after January 19, 2025. Important caveat: California does not conform, so the federal and state depreciation schedules diverge and both must be maintained.
Biggest Deduction Is Not Always Best
Writing everything off this year can waste deductions against income that would have been taxed at a lower rate anyway. The right answer depends on your income trajectory, not just this year’s purchase.
Buy-Ins and Buy-Outs
Asset versus stock, how goodwill is allocated, and whether payments are compensation or purchase price drive the tax result for both sides — often by more than the negotiation over price. Model it before the letter of intent, not after.
FREQUENTLY ASKED QUESTIONS
Medical & Dental Practice Accounting (Fresno, CA)
Why does my practice lose the QBI deduction?
Health is classified as a specified service trade or business. For 2025 the qualified business income deduction begins phasing out at $394,600 of taxable income for joint filers ($197,300 otherwise) and disappears entirely $100,000 above each figure. Above that line a practice receives no QBI deduction at all, which is why planning shifts toward retirement plans and entity structure.
What retirement plan should my practice use?
It depends on your income, how many staff you have, their ages, and how long you intend to keep practicing. A SEP is simple but forces proportional contributions across eligible employees. A safe harbor 401(k) with profit sharing gives more design flexibility. Cross-tested profit sharing can allocate more to owners where the census supports it. This is a modelling exercise, not a preference.
What is a cash balance plan?
A cash balance plan is a defined benefit plan layered on top of a 401(k). For a profitable practice with the right demographics it can push total deductible contributions well beyond what defined contribution limits allow. It carries an annual actuarial cost and a funding commitment, so it suits practices with stable, high profitability rather than volatile ones.
Should I take Section 179 or bonus depreciation on new equipment?
Often both, in some combination. Section 179 lets you expense up to $2,500,000 for tax years beginning in 2025, phasing down once purchases exceed $4,000,000, and is limited by taxable income. Bonus depreciation is 100% for qualifying property acquired after January 19, 2025 and is not income-limited. The right mix depends on your income this year versus next.
How should I structure a practice buy-in?
Structure drives the tax outcome for both sides, frequently by more than the price negotiation does. Whether the deal is assets or stock, how goodwill is allocated, whether payments are treated as compensation or purchase price, and how the transition period works all matter. California adds a layer: practices operate under the corporate practice of medicine doctrine and generally must be professional corporations owned by licensed practitioners, which rules out structures available in other industries.
Does California treat depreciation the same as the IRS?
No. California does not conform to federal bonus depreciation and has its own, much lower Section 179 limits. That means two depreciation schedules, and a federal deduction that does not reduce your California tax. Practices that plan only around the federal number are often surprised by the state bill.
Do you work with dental practices as well as medical?
Both. Dental practices tend to be more equipment-intensive and medical practices more payroll-intensive, but the core issues are the same: SSTB treatment of the QBI deduction, retirement plan design at high income, equipment depreciation, and eventually a buy-in or buy-out.
What does this cost?
Flat monthly pricing based on your transaction volume, number of providers, and whether you want CPA advisory included. No hourly billing. We will give you a number after a short conversation about the practice.
GET IN TOUCH
Let’s Chat About How We Can Help You
We are here to simplify your numbers, keep the practice’s books clean, and make sure the retirement and equipment decisions get made while they can still change your tax bill. Use the form to reach out, or skip the inbox and schedule directly with us.