CPA for Medical and Dental Practices in Houston

Medical and dental practices are some of the most tax-complex small businesses in Houston. High earners in restricted service businesses, equipment-heavy capex, employee-heavy payroll, malpractice insurance, deferred compensation arrangements — the list of accounting and tax considerations is meaningful. Whetzel & Co works with Houston physicians, dentists, and group practices who need a CPA who understands the specifics of medical practice accounting.

Who we serve

Solo practitioners — physicians, dentists, chiropractors, optometrists, mental health practitioners
Group practices and partnerships — multi-provider practices with complex compensation arrangements
Specialty practices — surgical centers, dermatology, plastic surgery, fertility clinics
Practice owners considering acquisition or sale — valuation work, due diligence, structuring
New practitioners setting up their first practice in Houston

Tax issues specific to medical practices

Section 199A and the SSTB problem

Medical practices are designated Specified Service Trades or Businesses (SSTBs) under Section 199A. Above certain income thresholds (currently around $241,950 single / $483,900 joint), the 20% Qualified Business Income deduction phases out entirely for SSTBs. For Houston physicians making $400K+, this creates a meaningful tax cliff. Strategic compensation structuring, retirement plan contributions, and entity choice all affect how this hits your return.

S-corp election and reasonable compensation

Most successful medical practices benefit from S-corp election to reduce self-employment tax exposure. The IRS scrutinizes “reasonable compensation” for owner-physicians heavily — documentation matters. Medical practices have specific industry compensation data points that strengthen the position, and we build that documentation as part of the engagement.

Cash basis vs accrual

Most small medical practices can use cash basis accounting under the $30M threshold. But accounts receivable management on the cash basis can produce surprising tax outcomes — the year you collect on a large outstanding receivable is the year you pay tax. Strategic year-end timing matters.

Equipment depreciation and Section 179

Medical equipment qualifies for Section 179 and bonus depreciation. A new dental imaging system, surgical equipment, or clinic build-out can produce six-figure first-year deductions when timed properly. See our year-end tax planning guide for how the placed-in-service timing works.

Retirement plan optimization

High-earning practitioners benefit enormously from advanced retirement structures. Solo 401(k) for solo practitioners, regular 401(k) plus profit sharing for groups, cash balance pension plans for established practices wanting to shelter $200K+ annually. The right plan can shelter $50K-$300K depending on your situation.

Multi-state issues

Houston practitioners often hold licenses in adjacent states or do telemedicine work. State sourcing rules for income are evolving and rarely simple. We coordinate state-level filings when needed.

Beyond tax: practice management accounting

For larger practices we provide:

Monthly bookkeeping and financial statements — properly classified by department or location
Productivity tracking by provider — revenue per provider, RVUs, key metrics
Cash flow forecasting — particularly important for new practices and during equipment purchases
Compensation arrangement modeling — for partner buy-ins and buy-outs
Insurance reimbursement reconciliation — matching what you billed to what you actually collected

Our bookkeeping and Virtual CFO services include all of the above for practices that need ongoing financial management beyond just tax season.

Common Houston medical practice tax situations

You’re a high-earning specialist who lost your QBI deduction and want to know what else can be done
You’re considering buying into your group practice and need help with the transaction structure
You’re a new physician fresh out of residency setting up your first private practice
You’re planning equipment purchases and want to time them for maximum tax benefit
You’re considering selling your practice and want to understand the tax implications
Your group practice’s books are a mess and you need someone to clean them up

What working with us looks like

For medical practices, we typically structure engagements with:

Annual tax return preparation (personal + business)
Monthly bookkeeping with financial statement delivery
Quarterly tax projection meetings
Mid-year and year-end planning sessions
Strategic advisory on major decisions (equipment purchases, partnership changes, practice sale)

Total fees for a typical solo practitioner with bookkeeping: $4,500-$8,000 annually. Group practices vary by size.

Houston metro coverage

We serve medical and dental practices throughout Houston, Katy, Sugar Land, Richmond, Rosenberg, The Woodlands, and Pearland. Most ongoing work happens via secure portal with periodic in-person meetings.

Get started

If you’re a Houston-area physician, dentist, or practice owner who wants a CPA who understands the specifics of your industry, call (832) 594-0339 or use the contact page. Free 30-minute consultation to discuss your situation and whether we’re a fit.

Related industries we serve

We also serve specialty CPA needs in these Houston-area industries: