New Plastic Surgery Practice Buyer's Guide: What to Look For
A practical guide for new plastic surgery practices on tax considerations, comparing entity structures, deductions, and strategies to minimize liability.
Starting a plastic surgery practice involves significant financial decisions, and taxes are a major factor. This guide compares the most common tax structures and strategies for new practices, helping you choose the best fit for your situation. We focus on concrete numbers and actionable steps, so you can make informed decisions from day one.
Compare Tax Structures for Your Practice
The legal structure of your practice determines how you pay taxes, your liability, and your administrative burden. Here is a comparison of the four most common options for plastic surgeons in 2026.
| Structure | Tax Treatment | Self-Employment Tax | Setup Cost | Administrative Burden | Best For |
|---|---|---|---|---|---|
| Sole Proprietorship | Pass-through, reported on Schedule C | 15.3% on net income | $0-$100 | Low | Solo practices with minimal risk |
| Single-Member LLC | Pass-through, same as sole prop | 15.3% on net income | $500-$1,500 | Low to moderate | Solo practices wanting liability protection |
| S-Corp | Pass-through, salary plus distributions | 15.3% on salary only | $1,000-$2,500 | Moderate (payroll required) | Practices with net income above $60,000 |
| C-Corp | Corporate tax, then dividends | No self-employment tax, but double taxation | $1,500-$3,000 | High (separate tax return) | Practices planning to reinvest heavily or seek investors |
Key takeaway: For most new plastic surgery practices, an S-Corp offers the best balance of tax savings and liability protection, especially if you expect net income above $60,000. However, it requires paying yourself a reasonable salary, which must be processed through payroll.
Tax Deductions Specific to Plastic Surgery Practices
Beyond standard business deductions, plastic surgery practices have unique expenses you can write off. Here are the most impactful ones, with realistic ranges.
- Medical equipment and depreciation: Surgical instruments, lasers, and imaging machines. For 2026, Section 179 allows you to deduct up to $1,220,000 of equipment costs in the year purchased, provided your total equipment purchases stay under that limit. For example, a new laser at $80,000 can be fully deducted in year one.
- Facility costs: Rent, utilities, and maintenance. If you work from a home office, you can deduct $5 per square foot up to 300 square feet, but only if that space is exclusively used for business.
- Staff salaries and benefits: Wages, health insurance, and retirement contributions. For 2026, the 401(k) contribution limit is $23,500 for employees under 50, plus employer matching up to 25% of compensation.
- Professional fees: Malpractice insurance, legal fees, and accounting services. Malpractice premiums for plastic surgeons range from $10,000 to $40,000 annually, depending on state and coverage.
- Continuing education and certifications: Courses, conferences, and board exam fees. You can deduct travel, lodging, and registration, but only for expenses directly related to your practice.
- Marketing and patient acquisition: Website development, SEO, and paid ads. For example, a $2,000 monthly SEO retainer is fully deductible.
Action step: Review your last quarter’s expenses and categorize them against this list. Identify any missed deductions, and set up a system to track them going forward.
Tax Strategies to Minimize Liability
Once you have your structure and deductions, consider these strategies to reduce your tax bill legally.
- Retirement plans: A solo 401(k) or SEP IRA allows you to contribute up to 25% of your net income, with a maximum of $69,000 for 2026 (including catch-up if over 50). For a practice earning $200,000, that could mean a $50,000 deduction.
- Health Savings Account (HSA): If you have a high-deductible health plan, you can contribute up to $4,150 for individuals or $8,300 for families in 2026. Contributions are tax-deductible, grow tax-free, and are not taxed on withdrawal for medical expenses.
- Hire family members: Employing your spouse or children can shift income to lower tax brackets. For example, paying your child $12,000 for administrative work is tax-deductible, and the child may owe no tax if their income is below the standard deduction.
- Quarterly estimated taxes: To avoid penalties, pay at least 90% of your current year’s tax liability or 100% of last year’s (110% if your income exceeds $150,000). Use IRS Form 1040-ES or pay online.
Action step: Consult with a CPA who specializes in medical practices. They can help you implement these strategies and ensure compliance with state-specific rules.
What to Look For in a Tax Professional
Not all CPAs understand the nuances of plastic surgery practices. When hiring, ask these questions:
- Do you have experience with S-Corps and payroll for medical practices?
- Can you help me with equipment depreciation schedules and Section 179?
- How do you handle state and local tax requirements for multi-state practices?
- What is your fee structure? Typical charges range from $1,500 to $5,000 for a practice tax return, depending on complexity.
Action step: Interview at least three candidates, and ask for references from other plastic surgeons or medical practice owners.
FAQ
Q: Should I choose an S-Corp or an LLC for my new practice?
A: If you expect net income above $60,000, an S-Corp can save you thousands in self-employment taxes. For example, on $150,000 net income, an S-Corp might save $5,000 to $7,000 annually, but you must pay yourself a reasonable salary, which requires payroll processing. An LLC is simpler and works well for lower income or if you want to avoid payroll.
Q: Can I deduct the cost of my cosmetic surgery equipment?
A: Yes, under Section 179, you can deduct up to $1,220,000 of equipment purchases in 2026, as long as your total purchases are under that limit. For instance, a $100,000 laser can be fully deducted in the year you buy it, reducing your taxable income dollar-for-dollar.
Q: How do I handle taxes if I have patients from multiple states?
A: You may have nexus in those states, which requires filing state tax returns. For example, if you see patients in a neighboring state, you might need to register and pay taxes there. Consult a CPA to determine your obligations, as this can add $500 to $2,000 per state in compliance costs.
Q: What records should I keep for tax purposes?
A: Keep all receipts, bank statements, and invoices for at least seven years. Use accounting software like QuickBooks or Xero to track expenses in real time. For equipment, maintain a depreciation schedule. For payroll, keep records of salaries and tax filings.
The Bottom Line
Your choice of tax structure and strategy can save you tens of thousands of dollars annually. Start by comparing the four structures, then implement deductions and retirement plans. Hire a CPA with medical practice experience, and review your tax plan quarterly. The time you invest now will pay off every year as your practice grows.