What Taxes Does a New Plastic Surgery Practice Pay? A Complete Guide

Starting a plastic surgery practice brings clinical and business challenges, and taxes are a big part of the latter. You will owe federal income tax, self-employment tax (if you are a sole proprietor or partner), payroll taxes if you have staff, and possibly state and local taxes. This guide breaks down each tax, gives realistic 2026 figures, and offers concrete steps to handle them without surprises.

Federal Income Tax

Your practice’s legal structure determines how you pay federal income tax. Most new practices choose an S-corp, LLC, or PC. Here is how each is taxed:

• S-corp: Profits pass through to your personal return. You pay tax at your individual rate, which ranges from 10% to 37% for 2026. You must pay yourself a “reasonable salary,” subject to payroll taxes.
• LLC (single-member or partnership): Pass-through taxation. You report profits on Schedule C (sole prop) or Form 1065 (partnership). You also pay self-employment tax on all net earnings.
• PC (professional corporation): The corporation pays tax at the flat 21% corporate rate. If you take distributions, you may also pay personal tax on dividends.

What you pay: Your effective federal rate will depend on your taxable income. For a practice netting $200,000 in profit, expect a combined federal income and self-employment tax of roughly $50,000 to $70,000, depending on deductions and credits.

Self-Employment Tax

If you are a sole proprietor, partner, or LLC member, you pay self-employment tax to cover Social Security and Medicare. The rate is 15.3% on net earnings up to the Social Security wage base ($168,600 in 2026) and 2.9% on earnings above that (plus an extra 0.9% for high earners).

Example: If your practice nets $150,000, you pay 15.3% on the first $168,600, so $22,950. If you net $200,000, you pay 15.3% on $168,600 ($25,796) plus 2.9% on the remaining $31,400 ($911), plus the 0.9% Medicare surcharge on income over $200,000 for single filers.

Tip: If you form an S-corp, you can split your income between salary (subject to payroll taxes) and distributions (not subject to self-employment tax). But the IRS requires a reasonable salary, so do not underpay yourself to avoid taxes.

Payroll Taxes

If you hire staff (receptionist, nurse, biller), you must withhold and pay payroll taxes. These include:

• Federal income tax withholding: Based on each employee’s W-4.
• Social Security and Medicare (FICA): 7.65% from employee wages, matched by you as employer (another 7.65%).
• Federal unemployment (FUTA): 6% on the first $7,000 of each employee’s wages, but you get a credit for state unemployment taxes, so the effective rate is often 0.6%.

What you pay: For a practice with two employees earning $50,000 each, your employer share of FICA is about $7,650. FUTA is about $42 per employee. You must deposit payroll taxes on a semiweekly or monthly schedule, depending on your total tax liability.

State and Local Taxes

State taxes vary widely. Some states have no income tax (Texas, Florida, Nevada), while others have high rates (California up to 13.3%, New York up to 10.9%). You may also owe:

• State unemployment tax: Rates range from 1% to 6% of the first $7,000 to $40,000 of wages, depending on your state and experience rating.
• Sales tax: If you sell retail products like skincare lines or post-surgical garments, you may need to collect state sales tax, which ranges from 0% to 7.25% (plus local additions).
• Local taxes: Some cities impose gross receipts taxes or business license fees. For example, Los Angeles has a gross receipts tax of $1.00 to $5.00 per $1,000 of revenue.

Check your state’s department of revenue website for specific rates and registration requirements.

Estimated Quarterly Taxes

The IRS expects you to pay taxes as you earn income. If you expect to owe more than $1,000 in federal tax, you must make quarterly estimated payments. Deadlines for 2026 are:

• April 15 (for Jan-Mar income)
• June 15 (for Apr-May)
• September 15 (for Jun-Aug)
• January 15, 2027 (for Sep-Dec)

How to calculate: Use Form 1040-ES. A common method is to pay 100% of last year’s tax liability (or 110% if your AGI was over $150,000) to avoid penalties. Or, pay 90% of your current year’s liability.

Penalty: If you underpay, the IRS charges interest on the shortfall, currently around 7% per year.

Tax Deductions Specific to Plastic Surgery Practices

You can reduce your taxable income with these deductions:

• Medical equipment and supplies: Depreciate or expense under Section 179 (up to $1,220,000 for 2026).
• Office rent and utilities: Deduct as business expenses.
• Staff salaries and benefits: Including health insurance for employees.
• Professional liability insurance: Deductible as a business expense.
• Continuing education: Courses, conferences, and journals.
• Marketing and advertising: Including website costs and social media ads.
• Vehicle use: If you travel between offices or to hospitals, deduct mileage at 65.5 cents per mile for 2026.

Keep meticulous records of all expenses. Use accounting software to track everything.

Sales Tax on Cosmetic Procedures

Most states do not tax medical procedures, but some tax cosmetic services. For example, New Jersey and Minnesota impose a sales tax on cosmetic surgery (6.625% and 6.875% respectively). Check your state’s rules. If you sell products like Botox (if not injected as part of a procedure) or skincare, you likely owe sales tax.

Action: Register for a sales tax permit if required, and collect tax at the point of sale.

How to Stay Compliant: A Practical Checklist

1. Choose your entity (S-corp, LLC, PC) and file with the state. Consult a CPA or tax attorney.
2. Get an EIN from the IRS (free online).
3. Register for state taxes (income, unemployment, sales) with your state’s revenue department.
4. Set up payroll with a service like Gusto or ADP, or use a PEO.
5. Open a separate business bank account and credit card to keep finances separate.
6. Track all expenses using software like QuickBooks or Xero.
7. Make estimated tax payments quarterly using the IRS Direct Pay system.
8. File annual returns: Form 1120-S (S-corp), 1065 (partnership), or Schedule C (sole prop), plus state returns.
9. Review your tax situation with a CPA at least twice a year.

FAQ

Q: Do I have to pay self-employment tax if I form an S-corp? A: Yes, but only on your salary, not on distributions. You must pay yourself a reasonable salary, which is subject to FICA. Distributions are not subject to self-employment tax, but they are still taxed as income.

Q: Can I deduct the cost of my own cosmetic procedures? A: No, personal cosmetic procedures are not deductible. However, if you provide free or discounted procedures to employees as a business expense, that may be deductible, but it is also taxable income to the employee.

Q: What happens if I miss a quarterly estimated tax payment? A: You will owe interest and possibly a penalty. The penalty is based on the underpayment amount and the number of days late. You can avoid it by paying at least 90% of your current year’s liability or 100% of last year’s.

Q: Should I hire a CPA or use tax software? A: For a new practice, a CPA is worth the cost (typically $500 to $2,000 per year for a small practice). They can help with entity choice, deductions, and tax planning. Software like TurboTax may work for simple returns, but a CPA reduces audit risk.

The Bottom Line

A new plastic surgery practice faces federal income tax, self-employment or corporate tax, payroll taxes, and state and local taxes. The exact amounts depend on your structure, location, and revenue. Start by choosing the right entity, setting up payroll, and making quarterly estimated payments. Work with a CPA to maximize deductions and avoid penalties. With proper planning, taxes become a predictable cost of doing business, not a surprise at year-end.

Related guides

• S-Corp vs LLC for New Plastic Surgery Practices: Which Saves More on Taxes?