The Annual New Np Practice Review Checklist

Running a new nurse practitioner (NP) practice means wearing many hats, and taxes are one area where small mistakes can cost you thousands. This annual review checklist walks you through the key tax-related tasks you need to complete each year, from organizing records to planning for next year. Follow it step by step to stay compliant, maximize deductions, and avoid surprises at tax time.

1. Gather and Organize Your Financial Records

Before you can do anything else, you need a complete picture of your practice’s finances. Pull together:

• Bank and credit card statements for all business accounts
• Receipts for all business expenses, including supplies, equipment, software, and travel
• Invoices and payment records for all patient revenue
• Records of any owner draws or salary you paid yourself
• Documentation for any contractor payments (1099 forms)

If you use accounting software like QuickBooks or Xero, reconcile all accounts to ensure your books match your bank statements. If you don’t use software, now is the time to start. Even a simple spreadsheet can save you hours later.

2. Reconcile Your Books and Bank Statements

Reconciliation means matching every transaction in your accounting system to your bank and credit card statements. This catches errors, missing deposits, or unauthorized charges. Do this monthly, but at minimum, do a full reconciliation before you file taxes.

Action step: Set aside two hours this week to reconcile your accounts. If you find discrepancies, investigate them now, not in April.

3. Review Your Business Structure and Tax Obligations

Your practice’s legal structure (LLC, S-Corp, sole proprietorship) determines how you pay taxes. Review your structure annually to ensure it still makes sense.

• Sole proprietorship or single-member LLC: You report business income on Schedule C of your personal tax return. You’ll pay self-employment tax (15.3% in 2026) on net earnings.
• S-Corp: You pay yourself a reasonable salary (subject to payroll taxes) and take additional profits as distributions, which are not subject to self-employment tax. This can save money, but requires payroll processing and additional compliance.
• Partnership or multi-member LLC: You file a partnership return (Form 1065) and issue K-1s to each owner.

If you’re unsure whether your structure is optimal, consult a CPA who works with healthcare practices. They can run the numbers and help you decide if changing structure makes sense.

4. Maximize Deductions Specific to NP Practices

Many new NP practices miss deductions they’re entitled to. Review this list and make sure you’ve claimed everything:

• Continuing education: Courses, conferences, and certifications are deductible, including travel and lodging.
• Professional liability insurance: Premiums for malpractice insurance are fully deductible.
• Medical equipment and supplies: Exam tables, diagnostic tools, and consumables.
• Software and apps: EHR systems, billing software, telehealth platforms.
• Home office: If you have a dedicated space used exclusively for business, you can deduct a portion of rent, utilities, and internet.
• Vehicle expenses: If you drive to see patients or for business errands, track mileage (the 2026 standard rate is $0.70 per mile) or use actual expenses.
• Retirement contributions: SEP-IRAs, SIMPLE IRAs, or solo 401(k)s can reduce taxable income significantly.

Action step: Create a checklist of these categories and go through your receipts to ensure you haven’t missed any.

5. Review Quarterly Estimated Tax Payments

As a practice owner, you’re generally required to pay estimated taxes quarterly if you expect to owe more than $1,000 in tax. The IRS deadlines for 2026 are:

• Q1: April 15, 2026
• Q2: June 15, 2026
• Q3: September 15, 2026
• Q4: January 15, 2027

If you underpaid during the year, you may owe penalties. Review your payments and adjust your estimates for the current year based on your actual income.

Action step: Calculate your 2026 estimated tax payments using the IRS Form 1040-ES worksheet, or ask your accountant to do it.

6. Check for State and Local Tax Obligations

Federal taxes aren’t the only ones. Depending on your state and locality, you may owe:

• State income tax on your practice’s profits
• Sales tax if you sell products (e.g., supplements, over-the-counter items)
• Local business taxes or gross receipts taxes
• Property tax if you own your office space

Each state has different rules, so check with your state’s department of revenue. Many states also require annual reports or franchise taxes for LLCs and corporations.

7. Review Payroll and Contractor Payments

If you have employees, you must file payroll tax returns (Form 941) quarterly and issue W-2s by January 31. If you use independent contractors, you must issue Form 1099-NEC to each contractor who earned $600 or more during the year.

Common mistake: Misclassifying employees as independent contractors. The IRS has strict rules, and penalties can be steep. If you’re unsure, review the IRS guidelines or consult a professional.

8. Plan for Retirement Contributions

Retirement plans are one of the best tax shelters for practice owners. Options include:

• SEP-IRA: Contribute up to 25% of net earnings, max $69,000 in 2026.
• Solo 401(k): Contribute up to $23,500 as employee (plus $7,500 catch-up if over 50) and up to 25% of net earnings as employer.
• SIMPLE IRA: Contribute up to $16,500 in 2026, plus employer match.

Contributions reduce your taxable income dollar-for-dollar. If you haven’t set up a plan, do it before December 31 to take advantage for the current tax year.

9. Organize Documentation for the IRS

Keep all tax-related documents for at least seven years. This includes:

• Tax returns and supporting schedules
• Bank statements and receipts
• Records of asset purchases (for depreciation)
• Any correspondence with the IRS

Use a cloud-based storage system (e.g., Dropbox, Google Drive) to keep digital copies. This makes it easy to access records if you’re audited.

10. Work with a Professional

Tax law is complex, and the cost of a CPA or enrolled agent is often worth it. Fees for a basic business tax return range from $300 to $800, while more complex returns (S-Corp, multi-state) can run $1,000 to $2,500. A professional can help you:

• Identify deductions you missed
• Ensure compliance with state and federal rules
• Plan for future tax years

Action step: If you don’t have a tax professional, ask other NP practice owners for referrals. Interview at least two before choosing.

FAQ

Q: When is the tax filing deadline for an NP practice? A: For most practices, the deadline is April 15, 2026. If you need more time, you can file Form 4868 for an automatic six-month extension, but you must still pay any taxes owed by April 15 to avoid penalties.

Q: Can I deduct my health insurance premiums? A: Yes, if you’re self-employed and not eligible for an employer-sponsored plan, you can deduct health insurance premiums for yourself, your spouse, and dependents. This deduction is taken on your personal return, not on Schedule C.

Q: What happens if I miss a quarterly estimated tax payment? A: You may be charged a penalty based on the amount you underpaid and the time it was late. The IRS calculates this on Form 2210. You can avoid penalties by paying at least 100% of last year’s tax liability (or 110% if your income is over $150,000).

Q: Should I incorporate my NP practice? A: It depends on your income and liability exposure. An LLC offers liability protection, while an S-Corp can save on self-employment taxes if your net income is above $40,000 to $50,000. Consult a CPA to compare the costs and benefits.

The Bottom Line

An annual tax review is not optional for a new NP practice. It’s how you stay compliant, avoid penalties, and keep more of what you earn. Set aside a few hours each year to work through this checklist, and don’t hesitate to hire a professional. The money you spend on a CPA is an investment that pays for itself many times over.

Start today: block out two hours this week to reconcile your books and review your deductions. Future you will thank you.

Related guides

• The Complete New NP Practice Startup Checklist
• 7 Mistakes New Np Practices Make in Their First Year
• 7 Questions to Ask Before Buying a New NP Practice