Pass-Through Entity Tax lets practice deduct 100% of state income tax federally, bypassing $10K SALT cap.
36+ states offer Pass-Through Entity Tax elections: the PLLC/S-corp elects to pay state income tax at entity level (deductible on federal Form 1120-S/1065 with no SALT cap), then owners get state tax credit for their share. On $500K net income in a 9% state, deduct $45K federally (worth ~$16K at 37%) vs $10K SALT cap = $12K+/yr recovered. Every 12/31 election. Some states require annual re-election. IRS has blessed via Notice 2020-75.
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Practice pays $2.85M/yr premium to owner-controlled captive; captive receives tax-free (small insurance co election).
Combine a defined-benefit cash balance plan with 401(k)+profit share — total deductible contributions $400K+/yr for older owners.
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.
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).