A practical look at the decisions worth making before December 31
By Marc Egort, CPA
After working with healthcare professionals and practice owners for many years, I have come to appreciate that the most useful tax planning conversations rarely begin with the tax return. They begin with a simple question: How is the practice actually performing, and what decisions can we make now that will put the owner in a better position next year?
That question is especially relevant as we approach the end of 2026. Physician groups, dental practices and other healthcare businesses continue to deal with pressure on reimbursement, labor costs and overhead. A tax deduction may be valuable, but it does not necessarily improve the economics of the practice. I encourage clients to look at both sides of that equation.
One area worth reviewing is capital investment. The return of 100% bonus depreciation for qualifying property acquired after January 19, 2025, together with expanded Section 179 expensing, may make equipment and technology purchases more tax-efficient. For a practice planning to replace diagnostic equipment or upgrade its systems, the timing of an acquisition could matter. But I would never suggest buying something simply to save taxes. We should first understand what the purchase will do for patient care, productivity and cash flow, then consider the tax treatment.
Retirement planning deserves a similar review. For 2026, the regular employee 401(k) deferral limit is $24,500, before any applicable catch-up contribution. Depending on the owner’s age, profitability and employee population, a profit-sharing arrangement or cash balance plan may also be worth discussing. The right structure is not necessarily the one that produces the largest immediate deduction; it is the one that supports the owner’s long-term goals and works for the practice as a whole. Some elections and plan decisions need attention before year-end.
I also like to revisit how owners are being paid. In an S corporation, reasonable compensation is an important part of the discussion. In a partnership, the distinction between guaranteed payments and distributions can change the tax result. And for many healthcare professionals, the qualified business income deduction requires special attention because specified service trade or business limitations may apply at higher income levels. These are not items I would leave to an April conversation.
Then there is the matter of cash. A practice can report a good year and still feel financially constrained. Insurance receivables may be aging, payroll continues every two weeks, and an owner may have made distributions without fully accounting for estimated taxes. Before recommending accelerated spending or additional compensation, I want to see a current profit-and-loss statement, a realistic cash-flow outlook, and a projection of the owner’s combined business and personal tax exposure.
The 2025 federal tax legislation has also changed the planning landscape. Provisions affecting bonus depreciation, Section 179 and the qualified business income deduction should be incorporated into a current-year projection rather than assumed from last year’s return. The actual benefit depends on the taxpayer, the entity, the asset and the timing. That is why a projection is far more useful than a generic checklist.
Personal planning belongs in the same conversation. Retirement savings, investment gains and losses, charitable contributions and Health Savings Account eligibility can all influence the result. For 2026, the HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, subject to eligibility and applicable catch-up rules. These decisions should be considered alongside the practice’s income, not in a separate silo.
My preference is to use the final months of the year to accomplish three things: understand where the practice stands, estimate the tax liability with reasonable accuracy, and identify decisions that make business sense regardless of the deduction. Sometimes that means accelerating a legitimate expense. Sometimes it means preserving cash. And sometimes the best advice is to make no transaction at all.
Healthcare professionals spend their days making decisions based on evidence, experience and judgment. I believe their financial planning should be approached the same way. The goal is not simply a lower tax bill for 2026. It is a stronger, more financially informed practice entering 2027.
Marc Egort, CPA, has more than 37 years of experience in accounting, taxation and financial advisory services, including extensive work with healthcare businesses and practice owners. His approach connects tax strategy with financial performance and operational decision-making. For more information, visit egortcpa.com or call (754) 301-2183.
This article is for general educational purposes and is not individualized tax advice. Tax treatment depends on specific facts, eligibility requirements and applicable law.
