A profitable veterinary practice and the real estate supporting it create separate tax decisions. AE Tax Advisors helps practice owners define a coordinated review of compensation, employee retirement plans, property depreciation, related-party rent and owner returns. The goal is a defensible plan with assigned implementation, not a generic promise that every veterinarian will save the same amount.
Discuss your practice, property and planning priorities · Review advisory scope and pricing
When this type of engagement fits
- You own a profitable clinic and its building, possibly through different entities.
- You are acquiring another practice or location and need an allocation and filing plan before closing.
- You want to evaluate retirement funding alongside staff costs and cash needed for equipment or property.
- You have a plan from another adviser but need a second opinion or clearer implementation responsibilities.
- You expect a partner buyout or practice sale and may retain the building.
An employed veterinarian with a straightforward W-2 return may need a different scope from a clinic owner with employees, debt and real estate. Start with your facts rather than buying an entity structure or deduction package in advance.
Build one map of the practice and property
Identify the legal owner, tax classification, ownership percentages and preparer for each operating company and property. Reconcile intercompany rent, loans, owner distributions, payroll and depreciation. A separate LLC does not by itself make a rental loss usable against clinic income or remove employee-plan aggregation rules.
For owners who retain their existing CPA, agree on who supplies the books, who evaluates the plan, who implements payroll or legal changes and who reports each item. Read AE's second-opinion approach if the immediate need is review rather than a full new relationship.
Owner compensation: analyze actual work, not a standard split
An S corporation must address reasonable compensation for shareholder services before treating payments as distributions. A fixed 50/50 split or a percentage of clinic profit is not a substitute for reviewing clinical hours, management duties, other staff and market compensation. The IRS compensation guidance specifically discusses service businesses and relevant facts.
An entity comparison should include payroll, compliance, state rules, owner benefits, financing and eventual exit taxes. The federal corporate rate alone does not show the combined cost of a C corporation and later owner distributions. Ask for a written comparison of feasible alternatives rather than an automatic election.
Retirement funding with clinic employees
For 2026, the defined-contribution annual additions limit is $72,000, generally subject also to compensation and plan rules; eligible catch-up contributions are separate. The regular employee 401(k) elective-deferral limit is $24,500. These are limits, not an automatic deductible contribution for every owner. Verify the year against the IRS retirement limits.
A practice with eligible employees cannot simply treat an owner-only 401(k) as an employee-free arrangement. Supply a complete employee census, ownership chart and details of related businesses to the plan administrator. A cash balance or other defined-benefit design requires actuarial calculations, funding commitments and employee coverage review, not an age-based savings promise. See controlled-group and affiliated-service-group planning.
Real estate, equipment and renovations
Separate the building purchase, land, medical equipment and later improvements. Review actual acquisition and placed-in-service dates before claiming bonus depreciation or Section 179. Expense treatment for an item owned by the practice is not automatically the same as treatment for an improvement owned by the landlord.
If you own the clinic building, evaluate study scope and feasibility with the owner-level tax review. When the property leases to the operating practice, assess self-rental and passive-loss rules, QBI treatment and later disposition consequences. Do not assume a study deduction reduces the clinic's payroll taxes or becomes immediate cash savings.
What to ask for in the written proposal
| Workstream | Scope to confirm |
|---|---|
| Planning | Entities and tax years reviewed, alternatives modeled, assumptions, deadlines and written recommendations. |
| Implementation | Who handles elections, payroll, bookkeeping, legal drafting, plan administration and property-study work. |
| Returns | Practice, property and owner forms; state filings; K-1 timing; prior-year correction procedure and separately priced work. |
| Follow-through | Records required, milestones, professional contacts and the agreed support period. |
AE's published pricing is a starting point. A planning engagement does not automatically include every return, study, amendment or legal service. Confirm the applicable scope and fees before work begins.
Prepare for the first conversation
Describe your clinic's ownership, approximate profit, employee count, property ownership, upcoming acquisitions or sales and the decision date. Identify your current CPA, bookkeeper and retirement-plan provider. We can then discuss which records are needed and whether a coordinated review fits. Share sensitive documents only through approved client-portal access after intake.
Book a veterinary practice-owner planning call
Explore the veterinary practice tax planning guide, S corporation return preparation and property return preparation for the related technical and filing work.
Primary references
- IRS Publication 560: small-business retirement plans
- IRS Publication 925: passive activity and at-risk rules
- IRS Publication 946: depreciation
Questions before engaging AE
Can AE work alongside my existing veterinary practice CPA?
Discuss coordination during intake. The written engagement should assign planning, implementation and return responsibilities and confirm how AE will work with your existing professionals.
Is an S corporation always the best choice for a veterinarian?
No. Entity selection depends on owner services, compensation, employees, state rules, benefits, financing and exit plans. A comparison should model the actual facts.
Can I use a solo 401(k) when my practice has employees?
Owner-only eligibility cannot be assumed when the practice or related businesses have eligible employees. Review the full employee census, ownership relationships and plan rules with the administrator.
How much will a practice owner save?
A reliable estimate requires the actual returns, projected income, ownership and supporting records. A deduction, deferral and permanent tax saving are different outcomes; no standard savings amount is promised.
General federal tax and service information, not a recommendation for your circumstances. Your signed engagement defines the services, fees and responsible professionals. Editorial policy.