What Taxes Does a New Podiatry Practice Pay? A Complete Guide

2026-08-21

Learn the federal, state, and local taxes a new podiatry practice must pay, with realistic 2026 rates, deadlines, and practical steps to stay compliant.

Starting a podiatry practice means taking on a new set of financial responsibilities, and taxes are among the most critical. You will pay income tax, self-employment tax, payroll tax, and possibly property tax, depending on your structure and location. This guide breaks down each tax, what it costs, and what to do this week to stay ahead.

Federal Income Tax

Your practice’s federal income tax depends on your business structure. A sole proprietorship or single-member LLC reports income on your personal return (Form 1040, Schedule C). An S corporation files Form 1120-S but passes income through to shareholders. A C corporation pays its own tax at the corporate rate.

For 2026, individual tax brackets range from 10% to 37%, based on taxable income. The corporate rate is a flat 21%. Most new podiatrists start as sole proprietors or single-member LLCs, so your practice profits are taxed at your personal rate.

What to do this week: Estimate your annual profit and calculate your estimated tax payments using IRS Form 1040-ES. Pay quarterly: April 15, June 15, September 15, and January 15.

Self-Employment Tax

If you are self-employed, you pay Social Security and Medicare taxes through self-employment tax. The rate is 15.3%: 12.4% for Social Security (up to the wage base of $176,100 in 2026) and 2.9% for Medicare (no limit). You can deduct the employer-equivalent half (7.65%) on your personal return.

What to do this week: Set aside 25% to 30% of each paycheck for taxes. Use Schedule SE (Form 1040) to calculate the exact amount.

Payroll Taxes

If you hire staff, you must withhold and pay payroll taxes. This includes:

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

You must deposit these taxes via the Electronic Federal Tax Payment System (EFTPS) on a semi-weekly or monthly schedule, depending on your liability.

What to do this week: Register for an EIN (if you haven’t) and set up payroll through a service like Gusto or ADP. Costs range from $40-$100 per month plus $6-$12 per employee.

State and Local Taxes

State taxes vary widely. Most states have an income tax (ranging from 0% to 13.3%), and some have a gross receipts tax. For example, Texas has no state income tax but imposes a franchise tax on revenue. California has a state income tax up to 13.3% plus an $800 annual LLC fee.

Local taxes may include city or county business taxes. For instance, New York City charges a general corporation tax, and some municipalities have a business license tax.

What to do this week: Check your state’s department of revenue website for your specific obligations. Register for state tax accounts (income, sales, and unemployment).

Sales Tax on Podiatry Services

Most states exempt medical services from sales tax, but not all. As of 2026, 45 states exempt professional medical services, but some, like Hawaii and New Mexico, tax them. If you sell products like orthotics or over-the-counter items, those may be taxable.

What to do this week: Confirm with your state’s tax authority whether podiatry services are taxable. If so, register for a sales tax permit and collect the appropriate rate (typically 4% to 8%).

Property Tax

If you own your office building, you pay property tax based on the assessed value. Rates average 1.1% of property value nationally, but range from 0.27% in Hawaii to 2.23% in New Jersey. If you lease, you may still pay property tax through your rent (often called triple net lease).

What to do this week: If you own, review your assessment and appeal if it’s too high. If you lease, check your lease agreement for property tax pass-through.

Estimated Tax Payments

As a self-employed podiatrist, you must pay estimated taxes quarterly. The IRS requires you to pay at least 90% of your current year’s liability or 100% of last year’s liability (110% if your adjusted gross income exceeds $150,000).

What to do this week: Use last year’s return (if any) or a profit projection to calculate your quarterly payments. Pay online via IRS Direct Pay or EFTPS.

Tax Deductions Specific to Podiatry Practices

Reduce your taxable income with these deductions:

Equipment and instruments: Section 179 allows you to deduct the full cost of qualifying equipment (up to $1,220,000 in 2026) in the year purchased.
Office rent and utilities: Deduct the business portion.
Malpractice insurance: Fully deductible.
Continuing education: Course fees, travel, and lodging are deductible.
Vehicle expenses: Use the standard mileage rate (67 cents per mile in 2026) or actual expenses.

What to do this week: Track all business expenses in a dedicated account or software like QuickBooks. Keep receipts for at least three years.

FAQ

Do I need to pay sales tax on podiatry services?

Most states exempt medical services, but some do not. Check with your state revenue department. If you sell physical products, those are often taxable.

Can I deduct my home office if I see patients there?

Yes, if you use the space exclusively and regularly for business. The simplified method allows $5 per square foot, up to 300 square feet.

What is the penalty for missing an estimated tax payment?

The IRS charges interest on underpayment, plus a penalty of 0.5% per month on the unpaid amount. Avoid this by paying at least 90% of your liability.

Should I incorporate to save on taxes?

An S corporation can save on self-employment tax, but it adds administrative costs. Consult a CPA to see if it’s worth it for your income level.

The bottom line

A new podiatry practice faces federal income tax, self-employment tax, payroll tax, and possibly state and local taxes. The exact amounts depend on your structure, state, and revenue. Start by estimating your quarterly payments, registering for state accounts, and tracking deductions. Work with a CPA who specializes in medical practices to ensure you don’t miss credits or deadlines. Taking these steps now will prevent surprises at tax time and keep your practice financially healthy.