Specified service businesses face extra limits, which makes retirement plan design and real estate ownership more important.
A cash balance plan is a defined benefit plan that is expressed as an account. Contribution limits rise with age and are set actuarially. Paired with a safe harbor 401(k) and profit sharing, it's the largest deduction most professionals can access.
Rent is deductible to the practice, depreciation shelters it in the LLC, and the building becomes a retirement asset separate from the practice. Self-rental and grouping rules determine how losses are treated.
Health, law, accounting, consulting, and similar fields lose the QBI deduction once taxable income passes the phase-in range. Pre-tax plan contributions are the most reliable way to stay below it.
The 2025 law left PTET workarounds intact. For partners in high-tax states, the federal benefit is often five figures per owner.
Compensation formulas affect self-employment tax, retirement plan compensation, and QBI. Revisit them when adding partners or plans.
Employees can't deduct unreimbursed business expenses, but an accountable plan lets the practice reimburse substantiated costs tax-free.
Personal goodwill sold by the owner can qualify for capital gain treatment, while gain on equipment is ordinary income to the extent of depreciation already taken. Private equity rollovers add their own deferral planning.
Connecticut's elective PET usually pays off when owners' SALT deductions are already capped. Owners who work in New York file there as nonresidents and take a Connecticut credit for the New York tax. A practice building brings conveyance tax, town mill rates, and a bonus depreciation add-back.
In a consultation, we look at your practice and personal returns, owner compensation, and staff payroll, estimate what PTET and other entity tax planning could be worth to each owner, and tell you whether a cash balance plan makes sense to model with your actuary and TPA.