The Complete New Plastic Surgery Practice Startup Checklist

2026-08-21

A step-by-step tax and business setup checklist for new plastic surgery practices, covering entity choice, licenses, accounting, and deadlines.

Starting a plastic surgery practice involves more than clinical skills. Taxes and business structure decisions affect your cash flow and liability from day one. This checklist walks you through the essential tax-related steps, with realistic costs and timelines, so you can avoid penalties and set up for long-term success.

1. Choose Your Business Entity

Your entity type determines how you pay taxes and your personal liability. For plastic surgeons, the most common options are:

Sole Proprietorship: Simplest, but no liability protection. You report income on Schedule C. Not recommended for surgery.
Single-Member LLC: Provides liability protection, but you still pay self-employment tax on all profits. No extra tax forms if you operate as a disregarded entity.
Partnership (Multi-Member LLC): Similar to single-member, but you file Form 1065 and issue K-1s. Good for two or more owners.
S Corporation: Offers liability protection and potential payroll tax savings. You must pay yourself a reasonable salary (typically $150,000-$250,000 for surgeons) and take remaining profits as distributions, which avoid self-employment tax.
C Corporation: Rare for new practices due to double taxation, but may be useful if you plan to raise venture capital or go public.

Cost: Filing an LLC costs $50-$500 depending on your state. S Corp election is free, but you must file Form 2553 within 75 days of formation. Many practices choose S Corp after the first profitable year.

Action this week: Consult a CPA or healthcare attorney to decide. If you need to start immediately, form an LLC and elect S Corp status later if beneficial.

2. Obtain an EIN and Register for State Taxes

An Employer Identification Number (EIN) is free from the IRS and required for hiring staff, opening a business bank account, and filing taxes. You can apply online in about 15 minutes.

After that, register with your state’s department of revenue for:

Sales tax permit: Required if you sell retail items like skincare products or injectables. Rates vary by state (0%-10%).
State income tax registration: If your state has income tax, you may need to register for withholding.
Unemployment insurance tax: Required when you hire your first employee.

Action this week: Apply for your EIN online. Then check your state’s revenue website for registration forms.

3. Set Up Your Accounting System

You need a reliable way to track income and expenses. Options include:

QuickBooks Online: $30-$100/month. The most common choice for practices.
Xero: $12-$65/month. Good for cloud-based collaboration.
Wave: Free, but limited features for payroll and inventory.
Hiring a bookkeeper: $200-$500/month for monthly reconciliations.

Action this week: Choose software and set up a chart of accounts. Categorize expenses immediately to avoid year-end chaos.

4. Open a Separate Business Bank Account

Never mix personal and business funds. This is critical for maintaining liability protection and simplifying tax filing. Open a business checking account and a high-yield savings account for tax reserves.

Cost: Many banks offer free business checking with minimum balances. Look for accounts with no monthly fee if you maintain a $5,000-$10,000 balance.

Action this week: Open accounts and transfer startup capital. Use business credit cards for all practice expenses to earn rewards and track spending.

5. Understand Your Tax Obligations

As a practice owner, you’ll face several taxes:

Federal income tax: Marginal rates from 10% to 37%.
Self-employment tax: 15.3% on net earnings (for sole props and LLCs).
Payroll taxes: If you have employees, you must withhold Social Security, Medicare, and federal income tax.
State taxes: Varies by state, some have no income tax (e.g., Texas, Florida).
Estimated quarterly taxes: You must pay federal taxes quarterly if you expect to owe more than $1,000. Deadlines are April 15, June 15, September 15, and January 15.

Action this week: Calculate your projected annual income and set aside 25%-35% of each payment for taxes. Open a separate savings account for this.

6. Hire a Tax Professional

A CPA with healthcare experience is worth the cost. They can help with entity selection, tax planning, and avoiding audits. Expect to pay:

CPA for tax preparation: $500-$2,000 per year, depending on complexity.
Ongoing tax planning: $200-$500 per month.

Action this week: Interview at least three CPAs. Ask about their experience with plastic surgery practices and their fee structure.

7. Track Deductible Expenses

Common deductions for plastic surgery practices include:

Equipment and supplies: Surgical instruments, lasers, injectables.
Rent and utilities: For your office space.
Staff salaries and benefits: Wages, health insurance, retirement contributions.
Marketing and advertising: Website, SEO, social media ads.
Professional fees: Malpractice insurance, legal fees, accounting.
Continuing education: Conferences, courses, and certifications.
Vehicle and travel: If used for business, track mileage at $0.65/mile (2026 rate).

Action this week: Start a spreadsheet or use software to log every business expense. Keep receipts for all purchases over $75.

8. Plan for Payroll

If you hire staff, you must run payroll. Options:

Payroll service (e.g., ADP, Gusto): $50-$150/month plus per-employee fees.
In-house payroll: Requires calculating withholding and filing quarterly returns, which is time-consuming and error-prone.

Action this week: If you plan to hire within six months, research payroll services and set up a payroll schedule.

9. Stay Compliant with Licenses and Permits

Beyond taxes, you need:

Medical license: Renew annually, cost varies by state ($100-$800).
DEA registration: Required for prescribing controlled substances, $888 every three years.
State facility license: Some states require a license for surgical facilities, often $500-$2,000 annually.
Malpractice insurance: $10,000-$30,000 per year for plastic surgeons, depending on location and coverage.

Action this week: Verify all licenses are current and note renewal deadlines on your calendar.

10. Create a Tax Calendar

Missed deadlines lead to penalties. Set up reminders for:

Quarterly estimated tax payments: April 15, June 15, September 15, January 15.
Payroll tax deposits: Monthly or semi-weekly, depending on amount.
Annual tax returns: March 15 for S Corps and partnerships, April 15 for sole props and individuals.
Business license renewals: Varies by city and state.

Action this week: Download a tax calendar template and add all deadlines to your digital calendar with 30-day reminders.

FAQ

Q: How much should I set aside for taxes as a new practice owner? A: Set aside 25%-35% of your net income. If you’re an S Corp, you’ll pay payroll taxes on your salary, but distributions are not subject to self-employment tax, so the percentage may be lower.

Q: Can I deduct startup costs? A: Yes, you can deduct up to $5,000 in startup costs in your first year, with the remainder amortized over 180 months. This includes market research, legal fees, and equipment setup.

Q: What if I miss a quarterly tax payment? A: You’ll owe interest and penalties, which can be significant. If you miss a payment, pay as soon as possible and consider adjusting your withholding or estimated payments for the next quarter.

Q: Should I use an S Corp from day one? A: Many practices start as an LLC and elect S Corp status when profits exceed $50,000-$100,000. The payroll tax savings can be substantial, but the administrative burden is higher. Consult your CPA.

The Bottom Line

Starting a plastic surgery practice requires careful tax planning. By following this checklist, you’ll establish a solid foundation, avoid common pitfalls, and keep more of your hard-earned revenue. Take one step at a time, and don’t hesitate to hire professionals for guidance. Your future self will thank you at tax time.