Well thought out and adequately executed chiropractor practice tax planning may minimize the financial loss and frustration caused by unnecessarily overpaying taxes. It is more than filling out the right IRS forms and then turning these forms in time to meet deadlines. Tax planning requires that a chiropractor practice CPA helps their client make daily choices that will influence their tax bill, allowing them to get the most significant deduction possible and minimize their tax liability.
Avoid Choosing the Wrong Business Entity
One of the most prominent accounting errors chiropractors may make is choosing the wrong business entity. Effective chiropractor practice tax planning sometimes means that a chiropractor would have multiple business entities.
It is not uncommon for a chiropractor to start as a sole proprietor. As their business grows, a financial adviser may encourage them to establish an LLC that may be able to protect them from practice liability. If a chiropractor was operating their business under the same entity they had when they were first established, they might miss out on several chiropractor practice accounting and tax planning benefits they are entitled.
A chiropractor practice CPA might recommend that their client structure their entity in one of the following ways.
- An LLC is a Limited Liability Company. It is popular among those in the medical field as it allows them to structure their business in a way to protect personal assets. An LLC can comprise one or multiple people who are called the LLC members.
- A multi-member LLC / partnership may be the ideal entity structure for businesses with two or more partners.
- A C Corporation – C corporations are the most common type of corporation. Businesses commonly utilize this structure when owners/shareholders prefer to be taxed separately from their business as they are traditionally required to pay corporate income tax.
- An S corporation may not have to pay taxes itself. An information tax return is filed, but income and losses may be able to be passed through to shareholders based on the corporation's percentage.
Our chiropractor practice financial advisers can help you analyze your current business structure and determine if any adjustments should be made to minimize your tax liability. We can help you with your chiropractor practice bookkeeping and provide unbiased outside analysis that can go a long way toward stabilizing and advancing your business.
How Chiropractor Practice Bookkeeping Can Help You Make Good Financial Decisions
Chiropractor practice bookkeeping can give you valuable insight into the health of your practice. For example, it may help you identify your most significant expenditures. For many chiropractic practices, this includes payroll, equipment costs, and facility costs. However, if your bookkeeping reveals that you are spending more than an average amount on business expenses, you may want to identify why.
Bookkeeping can help you identify where your income is coming from and adjust it for your practice's success. How quickly are your account receivables being paid? Are the number of clients visiting your office increasing? By keeping your books current, you are able to catch mistakes, identify financial gaps, and improve the chances of your cash flow aligning with your financials.
Gain Financial Insight into Your Chiropractor Practice from Your Financial Adviser
Fusion CPA is a chiropractor practice CPA firm, and we offer financial advisory services designed to help practices with streamlining accounting and tax minimization planning. We do more than file your taxes for you; our chiropractor practice CPAs can work with you as a partner throughout the year. Our goal is to minimize your tax liability and help you take advantage of every deduction you are entitled to. Our business advisory services provide unbiased outside analysis of your chiropractic practice. We provide consulting services and prepare detailed finance and accounting reports. Click the link below to schedule a no-cost or obligation exploratory call with our team of financial professionals today!
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.