Question 1

Should a Miami physician operate as an S-corp or professional association?

Accepted Answer

Florida allows physicians to practice through a Professional Association (PA) — the Florida equivalent of a professional corporation — or an LLC. Both can elect S-corp status for federal tax purposes. The choice between a PA and an LLC is a state-law question involving malpractice liability and ownership restrictions; Florida medical PAs must be owned by licensed physicians. We advise on the entity structure in coordination with a Florida healthcare attorney and handle the S-corp election and ongoing tax work.

Question 2

What is the reasonable-compensation requirement for a Miami physician S-corp?

Accepted Answer

Per IRC §3121 and IRS guidance, an S-corp physician who works in the practice must pay themselves a reasonable W-2 salary before taking distributions. For Miami physicians, the reasonable-comp benchmark is typically set against MGMA, AMGA, or specialty-specific compensation surveys for your specialty and practice type. The salary must reflect the value of your clinical and administrative work — not be minimized to avoid FICA. We research the applicable benchmarks and document the analysis.

Question 3

What retirement plan options are available to Miami physician practice owners?

Accepted Answer

Miami physician practice owners have several retirement plan options: (1) A 401(k) plan (employee deferral up to $23,000 in 2024, plus employer profit-sharing up to 25% of compensation, total limit $69,000); (2) A defined-benefit cash-balance pension plan, which can shelter significantly more than a 401(k) for older, high-income physicians; (3) A combination of a 401(k) and a cash-balance plan for maximum contribution potential. The defined-benefit plan requires actuarial calculation and an annual actuarial certification. We coordinate with plan administrators and actuaries and ensure contributions are funded before the deadline.

Question 4

Can a Miami physician deduct continuing medical education (CME) expenses?

Accepted Answer

Yes, if the education maintains or improves skills required in your current medical practice. Qualifying CME expenses — registration fees, travel, lodging, and materials — are deductible as an ordinary and necessary business expense. Education required to meet the minimum requirements for your medical license is also deductible. We include a CME expense discussion in every Miami physician intake to ensure qualifying expenses are captured.

Question 5

How are locum tenens earnings taxed for Miami physicians?

Accepted Answer

Locum tenens physicians are independent contractors who receive 1099-NEC income. This income is self-employment income subject to SE tax (15.3% up to the wage base). A Miami physician with significant locum tenens income alongside a W-2 from a hospital employment may benefit from a side S-corp for the locum work, reducing the SE tax on the 1099 income. The interaction with the employer-plan contributions — which count toward the 415 contribution limits — requires careful modeling.

Question 6

What is a cash-balance pension plan and why do Miami physician owners use it?

Accepted Answer

A cash-balance plan is a defined-benefit pension plan that credits each participant with a hypothetical account balance that earns a guaranteed interest credit. For a Miami physician practice owner above age 50 with high income, a cash-balance plan in combination with a 401(k) can allow annual contributions of $200,000–$300,000 or more (depending on age and compensation), creating a current-year deduction significantly larger than a 401(k) alone. Contributions must be funded annually; the actuarial calculation is required for each plan year. Plans that are not properly funded or maintained create excise tax issues.

Question 7

Are malpractice insurance premiums deductible for Miami physicians?

Accepted Answer

Yes. Malpractice insurance premiums paid by a medical practice or a self-employed physician are ordinary and necessary business expenses, fully deductible. For S-corp physicians, the premiums are paid by the S-corp and reduce entity-level income. For sole-proprietor physicians, the premiums are deducted on Schedule C. Tail-coverage premiums — paid when a claims-made policy is cancelled — are also deductible in the year paid.

Question 8

Do Miami physicians owe the net investment income tax (NIIT) on practice income?

Accepted Answer

Practice income from a medical S-corp or partnership in which the physician materially participates is not passive income and is not subject to the 3.8% NIIT under §1411. However, investment income — interest, dividends, capital gains, rental income — earned by a Miami physician above the MAGI threshold ($200,000 single, $250,000 married) is subject to NIIT. For high-income Miami physicians with significant investment portfolios or rental properties, NIIT planning is part of the year-round advisory work.

Question 9

What is the qualified business income (§199A) deduction for Miami physicians?

Accepted Answer

Medical services is a specified service trade or business (SSTB) under §199A. For Miami physician practice owners with taxable income above the threshold ($182,050 single / $364,200 married in 2024), the §199A deduction phases out entirely. Below the threshold, the full 20% deduction is available on qualified business income. For married Miami physicians with combined income above the phase-out range, entity-level strategies to reduce taxable income below the threshold are worth modeling before year-end.

Question 10

Can a spouse employed by a Miami physician's practice contribute to a retirement plan?

Accepted Answer

Yes. A spouse who is a bona fide employee of the medical practice with a reasonable salary can participate in the practice retirement plan and contribute up to the employee-deferral and employer-match limits. This effectively doubles the household's annual retirement-plan contribution capacity. The spouse's salary must be reasonable for the services performed; the IRS scrutinizes spousal payroll for excess compensation paid primarily to fund retirement contributions rather than compensate legitimate services.

CPA for Miami doctors and physicians.

Four types of Miami physicians we work with.

Solo and small-group medical practices

Specialty physicians and hospitalists

Physician-owned practice groups

Concierge medicine and DPC physicians

Physician practice tax has moving parts that a general CPA doesn't track.

Practice intake, comp modeling, retirement coordination, filing.

Practice and income intake

Reasonable comp and retirement modeling

Entity return and 1040 preparation

Year-round planning

Physician engagements start at Growth.

Cassandra de la Fe — Florida CPA for Miami physician practices.

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Physician practice tax done before year-end, not after.