Combine a defined-benefit cash balance plan with 401(k)+profit share — total deductible contributions $400K+/yr for older owners.
A Cash Balance Plan (§412(e)(3) or traditional CB) is a defined benefit plan expressed as hypothetical account. Combined with 401(k)+profit share, owner-employee ages 50+ can deduct $250K–$400K/yr — dramatically more than 401(k)'s $70K. Ideal for solo/small-group practices with age gap between owner and staff (older owner benefits disproportionately). Employer contributes 5–7.5% of staff pay for coverage. Setup $2K–$5K + $2K/yr admin. ROI: 30–37% federal + state tax deduction on $200K+ additional shelter.
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Practice pays $2.85M/yr premium to owner-controlled captive; captive receives tax-free (small insurance co election).
Professional practice (PLLC) contracts with owner's Management LLC for admin, IP, real estate — shifts income to lower-rate entity.
Practice rents from professional's own real estate LLC — rent flows to owner tax-favored, building appreciates outside practice.
At sale, allocate purchase price to professional's PERSONAL goodwill (patient/client relationships) — capital gain, one level of tax.
MSO owned by non-professionals contracts with PC for management — recapitalize practice with outside capital legally.
Pass-Through Entity Tax lets practice deduct 100% of state income tax federally, bypassing $10K SALT cap.
C-corp (or spouse-hired setup) can reimburse 100% of family medical expenses tax-free — bypasses 7.5% AGI floor.
Solo practitioner uses solo 401(k) with after-tax contributions + in-plan Roth conversion = $69K/yr into Roth (2024).