You rehab shoulders. You don't rehab Schedule C. We expense the table and ultrasound in year one, design the retirement plan, and keep the QBI deduction alive above the SSTB phase-out.
Physical therapy is a Specified Service Trade or Business under §199A. Cross the income threshold and the 20% QBI deduction starts disappearing. Add multi-state licensure, equipment timing, and CPT code accuracy, and the average solo PT leaves five figures on the table every year.
Hi-lo treatment tables, traction units, ultrasound, e-stim, NMES, laser therapy, dry needling kits, EMR and scheduling software. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on the overflow. Off-the-shelf software qualifies. We time purchases so the deduction lands in your highest-income year.
IRC §179(d); §168(k); §179(d)(1)(A)(ii) softwareA solo PT age 45 to 55 can shelter $50K to $200K per year in a cash balance plan stacked on a Solo 401(k). Deductible contributions, tax-deferred growth, rollover to IRA at retirement. Annual actuarial filing required. We coordinate the TPA and keep the plan compliant year over year.
IRC §401(a), §404(o), §415(b); ERISA §302Physical therapy is health, which is a Specified Service Trade or Business. Above $383,900 MFJ for 2024, the 20% QBI deduction starts phasing out and disappears completely by $483,900. We use retirement contributions, accountable plans, and entity structuring to keep taxable income inside the band.
IRC §199A(d)(2)(A); Treas. Reg. §1.199A-5(b)(2)(ii)PT Compact, contract travel work, telehealth across state lines. Compact privilege fees, FSBPT exams, jurisprudence exams, and CEU credits are deductible ordinary business expenses. We track them, allocate them across states for nonresident returns, and reconcile travel and per diem so nothing gets double counted.
IRC §162(a); Rev. Proc. 2019-48 (per diem)97110, 97140, 97530, 97535. The wrong code mix triggers Medicare and commercial payer audits, recoupments, and amended 1099-Ks. We reconcile your billing system to your tax return, document medical necessity properly, and stand between you and the auditor if the code mix gets questioned.
IRC §6662 (accuracy penalty); §7491 (burden of proof)The IRS targets PT S-Corps for low-comp positions. We benchmark your salary against APTA and BLS data for your state, caseload, and specialty (orthopedic, neuro, pediatric) so the wage holds up while the rest comes out as distribution free of self-employment tax.
IRC §1402(a); Rev. Rul. 59-221; Watson v. USSolo PT, age 46, S-Corp, cash-pay manual therapy clinic, $200K net income 2024. We installed a cash balance plan stacked on a Solo 401(k) and ran §179 on a new traction table plus shockwave unit.
$24,000 savedFederal tax savings on $78K of total deductible shelter (cash balance + 401(k) + §179) at marginal rate. State savings on top. Tax-deferred growth compounding for 19 years to retirement.