The Annual New Audiology Practice Review Checklist

2026-08-21

A practical, step-by-step checklist for new audiology practices to review taxes, finances, and compliance before year-end. Includes deadlines, deductions, and FAQs.

Running a new audiology practice means juggling patient care with the business side, and taxes are a big part of that. This checklist walks you through the key items to review annually, so you can catch issues early, maximize deductions, and avoid penalties. It is designed for practices in their first few years, but the steps apply to any audiology clinic.

1. Confirm Your Business Structure and Tax Deadlines

Your practice’s legal structure (sole proprietorship, LLC, S-corp, etc.) determines your tax forms and deadlines. If you haven’t reviewed this since opening, now is the time.

Sole proprietorship or single-member LLC: File Schedule C with your personal return (Form 1040). Deadline: April 15, 2026.
Partnership or multi-member LLC: File Form 1065. Deadline: March 15, 2026.
S-corporation: File Form 1120-S. Deadline: March 15, 2026.
C-corporation: File Form 1120. Deadline: April 15, 2026.

If you need more time, file Form 4868 for an automatic 6-month extension (personal) or Form 7004 (business). Note: an extension extends the filing deadline, not the payment deadline. Interest and penalties apply to late payments.

Action step: Pull your formation documents and confirm your structure. If you are unsure, check with your CPA or state filing office.

2. Reconcile Your Books and Bank Statements

Before you can review taxes, your financial records must be accurate. This means matching your accounting software (QuickBooks, Xero, etc.) to your bank and credit card statements.

Monthly reconciliation: Ideally, you do this monthly. If not, do it now for the entire year.
Look for discrepancies: Missing deposits, double-charged expenses, or uncategorized transactions.
Categorize correctly: Common categories for audiology practices include hearing aid inventory, equipment leases, marketing, rent, utilities, and professional fees.

Action step: Set aside 2-3 hours this week to reconcile. If you use an accountant, provide them with clean, reconciled statements.

3. Review Your Income and Expense Categories

Audiology practices have unique expenses. Make sure you are capturing all deductible items. Common ones include:

Hearing aid inventory and supplies: Cost of goods sold, including shipping and handling.
Equipment and software: Audiometers, tympanometers, real-ear analyzers, and practice management software. If you purchased equipment over $2,500, you may be able to deduct it under Section 179 or bonus depreciation.
Continuing education: Courses, conferences, and subscriptions to journals. Keep receipts and agendas.
Professional liability insurance: Premiums are deductible.
Rent and utilities: If you have a clinic space, these are deductible. If you work from home, consider the home office deduction.
Marketing: Website, ads, and patient recall mailers.
Payroll: Salaries, bonuses, and payroll taxes for employees.

Action step: Go through your profit and loss statement and flag any expenses that seem low or missing. Add notes to your accounting system.

4. Maximize Retirement Contributions

Retirement plans are one of the best tax-saving tools for practice owners. For 2026, contribution limits are:

401(k) employee deferral: $23,500 (plus $7,500 catch-up if age 50+).
Solo 401(k) or SEP IRA: Up to $70,000 (or 25% of compensation, whichever is less).
SIMPLE IRA: $16,000 (plus $3,500 catch-up).

If you have not set up a plan, you can still open a SEP IRA before your tax filing deadline (including extensions) and contribute for the prior year. For a 401(k), you must set it up by December 31, 2025, to contribute for 2025.

Action step: If you have not contributed, estimate your contribution and make it before the deadline. If you need help, talk to a financial advisor.

5. Review Estimated Tax Payments

As a practice owner, you are responsible for paying taxes quarterly. If you underpaid, you may owe penalties. The 2026 estimated tax deadlines are:

April 15, 2026
June 15, 2026
September 15, 2026
January 15, 2027

To avoid penalties, you must pay at least 90% of your current year’s tax liability or 100% of last year’s liability (110% if your adjusted gross income was over $150,000).

Action step: Calculate your total tax liability for 2025 (including self-employment tax) and compare it to what you paid. If you owe more than $1,000, adjust your quarterly payments for 2026.

6. Check for Deductible Business Use of Your Vehicle

If you use your car for business (home visits, supply runs, meetings), you can deduct either the standard mileage rate or actual expenses. For 2026, the standard mileage rate is projected to be around $0.70 per mile (the IRS sets it annually; for 2025 it was $0.70). Keep a log of business miles, including date, purpose, and odometer readings.

Action step: If you have not kept a log, start now. For past months, reconstruct from your calendar and receipts, but be conservative.

7. Verify Employee Classification and Payroll Taxes

If you have staff, ensure you are classifying them correctly as employees or independent contractors. Misclassification can lead to back taxes and penalties. For employees, you must withhold and pay Social Security, Medicare, and unemployment taxes. For contractors, you must issue Form 1099-NEC if you paid them $600 or more.

Action step: Review your worker agreements. If you are unsure, use IRS Form SS-8 to request a determination.

8. Organize Your Records for Your Tax Preparer

Whether you use a CPA or file yourself, having organized records saves time and money. Gather:

Profit and loss statement
Balance sheet
Bank and credit card statements
Receipts for large purchases (over $75)
Mileage log
Retirement plan statements
Payroll reports (if applicable)

Action step: Create a folder (physical or digital) and label it “2025 Tax Records.” Add documents as you go.

9. Plan for Next Year: Set Up a Tax Savings Account

Many new practice owners are caught off guard by tax bills. To avoid this, set aside a percentage of each deposit into a separate savings account. A common rule is 25-30% of net income for taxes, but your rate may vary.

Action step: Open a high-yield savings account and set up an automatic transfer of 25% of your monthly net profit.

10. Consider Hiring a Professional

Tax law is complex, and audiology practices have specific deductions. A CPA or enrolled agent who works with small medical practices can save you money and stress. Fees range from $500 to $2,000 for a basic business return, depending on complexity.

Action step: If you do not have a tax advisor, ask colleagues for referrals. Interview two or three before choosing.

FAQ

Q: What is the biggest tax mistake new audiology practices make? A: Not separating personal and business expenses. This leads to missed deductions and audit risk. Always use a dedicated business bank account and credit card.

Q: Can I deduct the cost of hearing aid inventory before I sell it? A: No. Inventory is deducted as cost of goods sold when you sell the hearing aids. You cannot deduct it upfront, unless you use the cash method and meet certain criteria. Consult your accountant.

Q: How long should I keep tax records? A: Keep all tax returns and supporting documents for at least 7 years. This covers the statute of limitations for audits and amendments.

Q: What if I miss the filing deadline? A: File as soon as possible. The failure-to-file penalty is 5% of the unpaid tax per month, up to 25%. Filing an extension avoids this, but you still owe interest on late payments.

The bottom line

An annual tax review is not just about filing a return; it is about understanding your practice’s financial health. Use this checklist to stay organized, maximize deductions, and avoid penalties. Set aside time each quarter to review your numbers, not just at year-end. If you are overwhelmed, hire a professional; the cost is worth the peace of mind. Your practice is your business, and managing taxes well is part of running it successfully.