Med spa accounting and tax questions, answered in a paragraph.

As a liability when the card is charged, not as revenue. A six-syringe filler package or a monthly membership is a promise to deliver treatments, so the cash goes to a deferred-revenue (package or membership liability) account and moves to revenue only as each treatment is redeemed in the POS. Each month the liability is rolled forward: opening balance, plus sales, minus redemptions and expirations, equals closing balance, and that closing balance must tie to the outstanding-balance report in Aesthetic Record, Boulevard, Zenoti or whichever system you use. Booking packages as revenue overstates profit in promotion months and hides the treatment hours the practice still owes. Our guide on memberships, packages and gift cards shows the entries.

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No. A gift card sale is a liability until the card is redeemed for a treatment or product; revenue is recognized on redemption, in the service line that delivered it. Cards that are never used (breakage) can be recognized only under a documented policy that follows your state's rules; in Florida, gift certificates may not carry an expiration date or post-sale fees under Florida Statutes section 501.95, so the liability stays on the books. Reconcile the gift-card liability account to the POS outstanding gift-card report every month, and treat booking deposits the same way: a deposit is a liability until the visit, while a forfeited no-show fee is revenue when charged. See gift cards, deposits and no-show fees.

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Accrual for the books, because packages, memberships and gift cards make cash-basis financials wrong for a med spa: a $3,000 package booked as revenue in January inflates January and erases the six treatments owed through June. The tax return can use a different method. A practice whose average annual gross receipts for the prior three years are $32,000,000 or less meets the 2026 gross receipts test and may use the cash method for tax, per Rev. Proc. 2025-32; an accrual-method practice may defer advance payments for at most one tax year under IRS Publication 538. Keep accrual books and let your CPA choose the tax method. Our guide on cash vs. accrual for med spas works an example.

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Revenue split by service line, with a matching cost of goods sold account under each one, and separate liability accounts for packages, memberships and gift cards. A workable med spa chart has revenue for injectables, energy-based devices, skin treatments, skincare retail and membership fees; cost of goods sold for injectable product, device consumables and retail product; provider costs separated into base wages, commissions and medical director fees; and liabilities for package deferred revenue, membership deferred revenue, gift cards, tips payable and sales tax payable. Avoid one blended Sales line and one Supplies line, which is how most generalist bookkeepers set up a spa and why the margins mean nothing. Our chart of accounts guide includes the full list with QuickBooks account types.

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Treat neurotoxin, filler and other injectables as inventory when purchased and move the cost to cost of goods sold as units are used on patients, so product cost lands in the same month as the treatment revenue. Track by unit (units of toxin, syringes of filler) in the POS or EMR, count physically at month-end, and reconcile the count to the inventory account; the difference is waste, product used on staff or shrink, and each is booked where it belongs rather than left in COGS. Retail skincare is handled the same way by SKU. Expensing a $40,000 product order the day it arrives makes that month look terrible and the next two look great, which is the most common distortion in med spa profit and loss statements. See inventory accounting for injectables and retail.

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Post a sales summary journal entry from the POS, monthly or daily, and match bank deposits to it, instead of booking each deposit as revenue. The entry records gross sales by service line, taxable retail and sales tax collected, package and membership sales into the liability accounts and redemptions out of them, gift-card sales and redemptions, tips collected, discounts and refunds, and the payment side split by card processor, cash and patient financing. Each processor's deposits for the month are then reconciled to the POS payment report, with merchant fees booked as an expense. At close, three figures must agree with the POS: total collections, outstanding package and membership balances, and outstanding gift cards. Our guide to POS integrations with QuickBooks covers Aesthetic Record, Boulevard, Zenoti, Vagaro, Mindbody, Nextech, PatientNow and Jane.

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Because card processors deposit net of their fees and on their own timing, and because tips, gift-card sales, patient financing and sales tax are mixed into what the POS calls a day's sales. As an illustration, a $10,000 day of treatments paid by card might arrive as roughly $9,700 two days later, in two deposits, with Friday and Saturday combined on Monday. The fix is to record gross sales from the POS and book processing fees separately as an expense, so revenue is not understated and fee creep is visible, then reconcile each processor's batch deposits to the POS payment report. If your books were built from deposits, revenue, sales tax and the commission base for your injectors are all wrong. Our guide on QuickBooks errors in med spa books covers merchant fee netting and undeposited funds.

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Tips are not the practice's revenue: record tips collected through the POS as a liability (tips payable) and clear it when the tips are paid to providers, normally through payroll. Tips paid to employees are wages for payroll tax purposes; employees who receive $20 or more in tips in a month must report them to the employer by the tenth of the following month, and the practice withholds on them and reports them on Form W-2, per IRS Tax Topic 761. A mandatory service charge is not a tip; it is practice revenue and, when paid out, ordinary wages. Keep tips out of the injector commission base and out of taxable sales. Our payroll and provider compensation service runs the tip flow through Gusto, ADP, Paychex or QuickBooks Payroll.

By the tenth business day after month-end, and closed means every balance sheet account is reconciled: bank and card accounts to statements, the package and membership liability to the POS outstanding-balance report, gift cards to the POS gift-card report, inventory to a physical count, sales tax payable to the POS tax report, payroll liabilities to the payroll register and, in an MSO structure, Due to and Due from between the entities netted to zero. The close also books the commission accrual from the provider production report so provider cost sits in the same month as the revenue. Anything later than mid-month means decisions about staffing, promotions and product orders are made on stale numbers. Our monthly close checklist lists each step in order.

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Six things: a profit and loss by service line (injectables, devices, skin treatments, retail, memberships) with product cost and provider cost under each; a balance sheet with package, membership and gift-card liabilities stated correctly; a deferred-revenue rollforward showing opening balance, sales, redemptions, expirations and closing balance; a provider production and compensation summary that ties to payroll; a KPI sheet; and an open-items list stating exactly what the bookkeeper is waiting on from you. A single P&L with one revenue line and a cash balance is not a monthly report for a med spa, because it cannot show which room makes money or what the practice still owes in treatments. Our guide on how to read a med spa P&L explains what to look at first.

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Five: gross margin by service line (injectables, devices, skincare, retail); cost per treatment (product units, provider minutes and consumables per syringe, session or area); the package and membership liability and how it changed; revenue per provider hour; and retail attach rate, the share of visits that leave with a product. Supporting numbers include product cost as a share of injectable revenue, provider cost as a share of service revenue, membership count and churn, and EBITDA after a normalized owner salary. Each is compared with the trailing three months, because a single month in a med spa is distorted by promotions and product orders. Published industry averages are unreliable; your own closed numbers are the benchmark. See our guide to med spa KPIs and the monthly dashboard.

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Start as an LLC (or a PLLC or professional corporation where your state's corporate-practice-of-medicine rules require one for the clinical entity) and elect S-corp status once net profit is well above a reasonable salary for your own injecting and management work. By default a single-owner LLC pays self-employment tax of 15.3% on its net earnings, per IRS Tax Topic 554; an S-corp pays payroll tax only on the owner's salary, and distributions above it are not subject to it. The trade is payroll cost, an extra return and a salary the IRS will accept. Form 2553 is due within two months and 15 days after the start of the tax year it should cover. Whether you need a professional entity is a question for a health-care attorney in your state. See LLC vs. S-corp for a med spa.

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Enough to be reasonable compensation for the work you actually do, before any distributions: for an owner who injects three days a week and manages the practice, that means roughly what you would pay an employed nurse injector for those clinical hours plus a management component, supported by local injector pay data and your own production report. Paying yourself $30,000 on $400,000 of profit will not survive an exam; in David E. Watson, P.C. v. United States (8th Cir. 2012) the court upheld reasonable compensation of $91,044 against a $24,000 salary. The salary runs through payroll with withholding, and health insurance for a more-than-2% shareholder goes on the W-2. Our guide on S-corp reasonable salary for an owner-injector shows how to document the number.

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Often, but it depends on your income and on whether the practice is a health business. The Section 199A deduction is up to 20% of qualified business income. Health is a specified service trade or business (SSTB), so for 2026 the deduction on health-SSTB income phases out once taxable income passes $201,750 (single) or $403,500 (joint) and is gone at $276,750 or $553,500, per Rev. Proc. 2025-32. Treas. Reg. 1.199A-5 defines health as medical services by physicians, nurses and similar professionals and excludes health spas and medical device sales, so a nurse-run injectables practice looks like health while a non-clinical MSO or a retail skincare line may not. Below the thresholds the SSTB label does not matter. See the QBI deduction for med spas.

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Usually yes, if it is placed in service, meaning installed and ready to treat patients, by December 31. For 2026, Section 179 lets a med spa expense up to $2,560,000 of equipment, with the limit phasing out once total purchases pass $4,090,000, per Rev. Proc. 2025-32, and 100% bonus depreciation is permanent for qualified property acquired and placed in service after January 19, 2025, per IRS Publication 946. Section 179 cannot exceed the business's taxable income; bonus depreciation can create a loss. A financed device qualifies in full even though you have paid one installment. Some states add bonus depreciation back; Florida C-corps recover it over seven years. Model the write-off against this year's income before you sign. See Section 179 and bonus depreciation for med spa equipment.

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The ordinary costs of running the practice: injectable and skincare product (as it is used, through cost of goods sold), provider wages, commissions and payroll taxes, medical director fees, malpractice and general liability insurance, rent and utilities, device leases or depreciation, consumables, POS and EMR software, marketing, licenses, continuing education, merchant fees, professional fees, and business meals at 50% under IRS Publication 463. What owners get wrong: treatments performed on yourself or your family are not deductible, clothing that could be worn outside the treatment room is not a uniform, and product given to staff is a compensation question rather than a marketing expense. Lasers and devices are depreciated or expensed under Section 179 rather than written off as supplies. Our guide to med spa tax deductions goes line by line.

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Yes, if you expect to owe at least $1,000 for 2026 after withholding and credits, which describes nearly every profitable med spa owner taxed as a sole proprietor, partner or S-corp shareholder. The 2026 due dates are April 15, June 15 and September 15, 2026, and January 15, 2027. To avoid the underpayment penalty, pay in at least 90% of this year's tax or 100% of last year's (110% if your 2025 adjusted gross income was over $150,000), per the 2026 Form 1040-ES instructions. The prior-year safe harbor is the planning tool: a practice whose profit jumped after adding an injector can pay last year's tax in quarters and settle the rest in April without penalty, as long as the cash is set aside. See quarterly estimated taxes for med spa owners.

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Run a projection from closed books first, then act only on items with real money behind them: place any device you were buying anyway in service by year-end for Section 179 or 100% bonus depreciation; fund or set up a retirement plan, where the 2026 defined-contribution ceiling that caps a SEP-IRA is $72,000 and the 401(k) employee deferral is $24,500, per IRS Notice 2025-67; true up the S-corp owner's salary and the shareholder health insurance on the W-2; pay accrued provider bonuses and December commissions before year-end if you file on the cash method; and recalculate the January 15 estimate. Do not buy a laser you do not need for the deduction; a $100,000 device saves far less than $100,000 in tax. See year-end tax planning for med spas.

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Read it the day it arrives, note the response date printed on it, and send it to your CPA before you call the IRS or pay anything. Most notices a med spa receives are mechanical: a payroll tax deposit the IRS says was late or short, income on a 1099-K or 1099-NEC that does not match the return (the CP2000 series), a missing form, or an estimated-payment penalty. Each has a written response path, and many are wrong because of a timing or matching issue. Never ignore one; the IRS's own guidance on understanding your notice or letter says to respond by the date shown. As an IRS Enrolled Agent, Jenny Gao can represent the practice directly, including penalty abatement where the facts support it. See IRS and state notices for med spa owners.

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Keep income tax records at least three years after filing, six years if a return left out more than 25% of gross income, seven years for a bad-debt or worthless-securities deduction, and indefinitely if a return was never filed, per the IRS record retention rules. Employment tax records, including injector commission calculations and tip reports, must be kept at least four years after the tax was due or paid. Records for lasers, devices and build-outs stay until the limitations period runs on the year you dispose of the asset. For a med spa that means archiving POS exports (sales, package balances, gift-card liability, sales tax collected) by month, since your POS vendor's history may not be there when an auditor asks. Our guide to med spa record retention has a schedule by document type.

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Yes, you will receive a Form 1099-K, and no, it is not taxed twice as long as your books already report the gross sales the POS recorded. Payment card processors report card payments to the IRS regardless of amount; the $20,000 and 200-transaction threshold applies only to third-party settlement organizations such as payment apps and marketplaces, per the IRS page on understanding your Form 1099-K. The 1099-K shows gross amounts before processing fees, refunds, sales tax and tips, so the number will be larger than your revenue; the reconciliation from 1099-K gross to POS gross to QuickBooks revenue is what prevents a mismatch notice. Books built from net deposits will understate revenue against the 1099-K. Our tax planning and preparation service does that tie-out every year.

No, if the practice's entities were formed in the United States. FinCEN's interim final rule in March 2025 exempted domestic companies and U.S. persons from beneficial ownership information reporting, and its final rule issued August 11, 2026, effective on publication in the Federal Register on August 14, 2026, made that exemption permanent and directed FinCEN to delete information U.S. persons had already filed, per FinCEN's BOI page. Only foreign entities registered to do business in a U.S. state still report, and only for their foreign beneficial owners. A med spa LLC, PLLC, professional corporation or MSO formed in Florida, Texas, California or any other state has nothing to file with FinCEN and should ignore paid BOI filing solicitations. See BOI reporting for med spas in 2026.

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No in almost every state: injectables, laser and other aesthetic treatments are services, and most states, including Florida, Texas and California, do not tax cosmetic or medical services. A handful of states tax services by default (Hawaii, New Mexico and West Virginia among them), and New York City applies its 4.5% local tax to a short list of personal services such as hair removal. No state currently has a stand-alone tax on cosmetic procedures that we are aware of; New Jersey tried one and repealed it. What is taxable almost everywhere is the retail side: skincare, sunscreen, supplements and home devices sold to patients. Treat every treatment as non-taxable and every retail SKU as taxable unless a state exemption applies, separately stated on the receipt. Our guide to sales tax on med spa services and products covers each category.

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Florida charges 6% state sales tax plus a county surtax of up to 2% on taxable retail sold at a med spa. For 2026 the surtax is 1.5% in Hillsborough, 1% in Pinellas, Pasco, Miami-Dade and Broward, and 0.5% in Orange and Palm Beach, so a Tampa practice collects 7.5% on a skincare order; county rates are published each year on the Department of Revenue's DR-15DSS. The surtax applies only to the first $5,000 of any single item. Treatments are not taxed. Under Rule 12A-1.020 the practice is the consumer of what it uses in treatments, so it pays tax on gloves, masks and reusable instruments, while prescription-only drugs and single-patient prescription products are exempt. Cosmetics stay taxable even with medicinal ingredients unless dispensed under a prescription. Our Florida med spa accounting page covers filing and registration.

No. Texas taxes only the services listed in its tax code, and medical and cosmetic services are not on the list, so Botox, filler, laser and facial treatments at a Texas med spa are not taxable. Retail products are: the state rate is 6.25% and local jurisdictions add up to 2%, for a maximum of 8.25%, which is the rate in Austin. Over-the-counter products with an FDA Drug Facts panel, such as sunscreen and acne treatments, are exempt, and so are prescription drugs and hypodermic needles used for medical purposes. The practice itself owes tax on the supplies and equipment it uses in treatments. A sales tax permit is free and takes about two to three weeks online. Our Texas med spa accounting page also covers the franchise tax and the Texas Medical Board's delegation rules.

Only on products. California does not tax services, and the CDTFA's guide for beauty businesses says facials, laser treatments and hair removal are not taxable while retail skin care sold to clients is. The statewide rate is 7.25% and district taxes add 0.10% to 2.00%: from October 1, 2026 the rate in Los Angeles County is 10.25%, while San Diego is 7.75% and San Francisco 8.625%. A seller's permit is free and is required before the first retail sale. Two California-specific points: the practice is the consumer of the supplies it uses in treatments and owes tax on them, and under Regulation 1591 medicines a physician furnishes to his or her own patient are exempt, but devices, appliances and supplies are not medicines. Our California med spa accounting page also covers the $800 LLC tax and EDD payroll.

Not at the state level, but New York City taxes some of them. New York State sales tax applies to retail products but not to personal services, so skincare at a Manhattan med spa is taxed at 8.875% while a filler appointment is not. New York City adds its own 4.5% local tax to a list of personal services that includes hair removal, massage and tanning, and the Tax Department has ruled that laser hair removal performed by technicians at a physician-supervised clinic is taxable in the city; services performed by physicians and other Title VIII licensees are excluded. Cosmetics and moisturizers are taxable statewide; sunscreen and acne products that treat a condition are exempt. You need a Certificate of Authority at least 20 days before opening. Our New York med spa accounting page has the detail.

Yes once you cross that state's nexus threshold, and immediately if you have a physical presence there. A second location, an employee or inventory in a state creates nexus on day one. Without physical presence, most states require registration once your sales into the state pass $100,000 a year: Florida uses $100,000 of taxable remote sales in the prior calendar year, California and Texas use $500,000, and New York requires both $500,000 of sales and more than 100 transactions. For a single-location med spa shipping a few orders of retinol and sunscreen out of state, those thresholds are far away, but a practice with a strong online skincare line can cross $100,000 in one state faster than it expects. Track sales by ship-to state every month. Our guide to sales tax nexus for med spas explains how.

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It depends on the channel. On your own website or your POS's online store, you collect tax on taxable skincare shipped to any state where you are registered, at the rate where the package is delivered; in Florida the sale is sourced to the county of delivery, so a Tampa practice shipping to Orlando charges Orange County's rate, not Hillsborough's. On a marketplace platform, the marketplace provider collects and remits the tax on your sales: Florida requires you to exclude those sales from your own return once the marketplace certifies it is collecting, and New York registers and taxes the marketplace provider for the sales it facilitates. You still register in any state where you have a physical presence. Our guide to selling skincare online covers the mapping between your e-commerce platform and QuickBooks.

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Register with the state revenue department before your first retail sale, and in Florida before you open. Florida uses the online Florida Business Tax Application (Form DR-1), which also covers reemployment tax; you receive a Certificate of Registration (DR-11) to display and an Annual Resale Certificate (DR-13) so you can buy retail inventory tax-free, though not the supplies you use in treatments. Texas issues a free sales tax permit online in about two to three weeks, California's seller's permit is free, and New York requires a Certificate of Authority at least 20 days before you begin business, with penalties up to $10,000 for operating without one. Map your POS tax codes the same week so the first return reconciles to the POS tax report. Our med spa sales tax compliance service handles registration, mapping and filing.

As often as the state assigns based on how much tax you collect, which for most med spas means monthly or quarterly. Florida assigns monthly filing above $1,000 of annual tax, quarterly for $501 to $1,000, semiannual for $101 to $500 and annual at $100 or less; returns are due the 1st and late after the 20th. Texas requires monthly filing at $1,500 or more of state tax per quarter and quarterly below that. California assigns a filing basis at registration and requires prepayments once taxable sales average $17,000 or more a month. New York starts new vendors on quarterly returns. A practice selling $20,000 of skincare a month in Tampa collects about $1,500 of tax a month and files monthly. Our guide to sales tax for multi-location med spas lays out the calendars by state.

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Mark every treatment, package and membership non-taxable and every retail SKU taxable, then handle the exceptions by state. In Florida, cosmetics are taxable even with medicinal ingredients, while a product dispensed under prescription for one patient is exempt under Rule 12A-1.020. Texas and New York exempt sunscreen and acne products that carry a Drug Facts panel, so one SKU can carry different codes by state. Set the rate by location, and by ship-to address for online orders. If a package bundles a taxable product with treatments, state the product separately: New York taxes a kit sold as one unit on the full price when any component is taxable. Each month, tie the POS tax report to sales tax payable in QuickBooks before filing. Our guide to med spa POS integrations shows the mapping for Aesthetic Record, Boulevard and Zenoti.

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You owe the tax anyway, out of the practice's own pocket, plus interest and usually penalties, for every open period. Florida's late penalty is 10% of the tax with a $50 minimum per return, and the Department notes that outside its disclosure program the normal, longer limitation periods apply. The right move before the state finds you is a voluntary disclosure: Florida limits the look-back to three years from the date of your request and waives penalties in most cases, though interest is still due and a 5% penalty applies to tax that was collected and not remitted. Register, fix the POS tax codes, then rebuild taxable retail sales by month from POS exports to compute what is owed. Our cleanup and catch-up service prices this as a one-time fixed project.

W-2 employees in almost every med spa fact pattern. The IRS common-law test looks at behavioral control, financial control and the relationship: a nurse injector who works your schedule, in your rooms, with your product, under your medical director's protocols and your pricing is an employee no matter what the contract says. California goes further with the ABC test, which presumes a worker is an employee unless the practice proves all three prongs. Paying injectors on 1099 to avoid payroll tax exposes the practice to back payroll taxes, penalties and state unemployment assessments, and it unravels in a sale when the buyer's diligence team reclassifies every provider. The rare legitimate contractor is a visiting provider with her own practice, insurance, patients and pricing. Our guide to employee vs. independent contractor for med spas covers the tests and Form SS-8.

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Yes, if you paid $2,000 or more during 2026 and the director is not on your payroll. A director's fee is a payment for medical or health care services, so under the IRS instructions it goes in box 6 of Form 1099-MISC rather than on a 1099-NEC, with the recipient copy due January 31 (February 1, 2027, because the 31st is a Sunday). The usual exemption for payments to corporations does not apply to medical and health care services, so a fee paid to the director's professional corporation is still reportable. Fees paid by credit card are reported by the card processor instead. Collect a Form W-9 before the first payment, and in Florida a contractor you will pay $600 or more in a year must also be reported to the State Directory of New Hires. Our guide to medical director agreements covers the accounting for the fee itself.

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Yes. Under the FLSA, commissions are payments for hours worked and must be included in the regular rate used to compute overtime, which is at least one and one-half times that rate for hours over 40 in a workweek. Illustrative: an injector paid $30 an hour works 45 hours and earns $600 of commission that week. Straight-time pay is $1,350 plus $600, or $1,950; the regular rate is $1,950 divided by 45 hours, or $43.33; the five overtime hours earn a half-time premium of $108.33, not the $75 a payroll clerk gets from the $30 base rate. California also requires daily overtime after eight hours and written commission agreements. Payroll systems will not do this unless commissions are entered as a regular-rate earning, so check the setup. Our guide to injector compensation and commission payroll has the full method.

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Pay on redemptions, not sales, and exclude sales tax, tips, gift-card sales and the cost of product. Illustrative: a $2,400 package sold in January and performed over six months is a liability when sold; paying the injector 20% in January means paying $480 before any treatment is delivered, then clawing it back if the patient refunds. Paying on the delivered treatment keeps provider cost in the same month as the revenue and makes the commission accrual tie to the provider production report. Decide in writing whether the base is gross service revenue or revenue net of injectable cost, because a 40% split of gross on a syringe of filler that cost the practice $300 can leave nothing. Every plan must still clear minimum wage for all hours worked. Our payroll and provider compensation service builds the plan into payroll.

It depends on how the practice is taxed. A single-member LLC or partnership owner cannot be on W-2 payroll: you take owner draws and pay self-employment tax of 15.3% on 92.35% of net earnings through quarterly estimates. An S corporation owner must run a reasonable W-2 salary before taking distributions, and an owner who also injects pays herself for the clinical work at a rate a hired injector would accept, then takes the rest as distributions. Health insurance for a more-than-2% S-corp shareholder goes on the W-2. In an MSO structure the owner may be paid by both entities, split by the work done for each. Draws, salary and distributions are tracked separately in the books; mixing them is the first thing a lender or buyer notices. Our guide on how med spa owners pay themselves gives the mechanics.

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Roughly 7.65% of wages plus small fixed amounts for unemployment. The employer matches Social Security at 6.2% up to the 2026 wage base of $184,500 and Medicare at 1.45% with no cap. Federal unemployment (FUTA) is 6.0% on the first $7,000, reduced to 0.6% with the state credit, or $42 a year per employee. State unemployment varies: Florida's new-employer reemployment tax rate is 2.7% on the first $7,000 ($189), Texas 2.70% on $9,000, California 3.4% on $7,000 plus a 0.1% training tax, and New York 4.1% on a $17,600 wage base for 2026. Illustrative: a Florida injector earning $80,000 costs the practice $6,120 in FICA, $42 in FUTA and $189 in reemployment tax, about $6,351 before workers' compensation and benefits. Our guide to med spa payroll taxes walks through each line.

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Payroll follows where the work is physically performed, not where the practice is based. For a second location or a provider who lives and works across a state line, the practice registers for income tax withholding (where the state has one) and state unemployment in that state and withholds for the employee's work state, subject to reciprocity agreements between some neighboring states. Florida has no income tax withholding, so a Tampa practice opening in Atlanta adds Georgia withholding and unemployment accounts it has never needed. Registration deadlines are short: California requires EDD registration within 15 days of paying more than $100 in wages in a quarter, Texas within ten days of becoming liable, and New York once $300 of wages is paid in a quarter. Our fractional tax director service handles the registrations when a practice crosses a state line.

Four things before the first shift and two more within the month. The employee completes Form W-4 and Section 1 of Form I-9 on the first day; you complete Section 2 of the I-9 within three business days, and collect a state withholding form where the state has an income tax. Report the hire to the state new-hire directory within 20 days (Florida's rule under s. 409.2576; California's deadline is also 20 days). Confirm workers' compensation: Florida requires it once a non-construction employer has four or more employees, California from the first employee. Florida employers with 25 or more employees must also use E-Verify. For an injector, add the signed commission agreement, the medical director's delegation protocol and a copy of the license to the file. Our hiring your first injector checklist puts this in order.

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Tips are taxable wages to the employee, and an automatic service charge is not a tip at all. Employees report tips of $20 or more a month to the practice, which withholds income tax and FICA on them and pays the employer share. A mandatory 18% charge on a group event is practice revenue and becomes ordinary wages when paid out. The federal qualified-tips deduction (2025 through 2028, up to $25,000) covers only voluntary tips in listed occupations, including skincare specialists and massage therapists, and excludes automatic gratuities. One wrinkle for med spas: the statute excludes tips received from an employer that is a health specified service trade or business, so whether your practice is a health business affects your staff's deduction as well as your QBI. Our guide to med spa payroll taxes covers tip reporting.

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In states that enforce the corporate practice of medicine, clinical staff are employed by the professional entity and the MSO employs the front desk, marketing and administrative staff; the final answer comes from your health-care attorney, not your accountant. The Medical Board of California states that an MSO may not control the hiring or firing of clinical staff, and New York's Education Department says a general business corporation may not employ licensed professionals to offer services to the public, though it may act as a management company. Florida has no corporate-practice-of-medicine statute of that kind; its constraints are the Health Care Clinic Act and the fee-splitting rule, and many Florida practices run one entity. Once the structure is set, the payroll work is mechanical: two payroll accounts, the medical director paid by the professional entity, shared staff allocated under the management agreement. Our guide to MSO and PC structure accounting shows the entries.

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It is a two-entity setup used where state law restricts who may own a medical practice: a professional entity, owned as the state requires, delivers the clinical services, and a management services organization (MSO) owned by the non-physician owner provides space, equipment, staff, marketing and billing under a management services agreement for a fee. Whether you need it depends on your state; AmSpa and the state boards summarize it this way. California requires physicians to hold the majority of a medical corporation, Texas treats non-surgical cosmetic procedures as the practice of medicine and generally bars lay entities from employing physicians, and New York requires a physician-owned PC or PLLC. Florida has no corporate-practice-of-medicine statute of that kind; its constraints are the Health Care Clinic Act and the fee-splitting rule. Confirm with a health-care attorney licensed in your state before forming anything. Our guide to MSO/PC structure accounting covers what happens after.

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The MSO invoices the professional entity a fee set in the management services agreement and books it as revenue; the professional entity books it as an expense. The fee must be set at fair market value, documented and actually paid, not left as a growing intercompany balance. Percentage-of-revenue fees are a problem in several states: Florida's fee-splitting rule (s. 458.331(1)(i)) has been raised against percentage-of-revenue management fees, so health-care attorneys there generally advise a documented flat fee, and New York's Education Law §6530(19) makes a fee that is a percentage of the licensee's income professional misconduct. Your attorney and valuation support set the number; the accounting job is to invoice it monthly, settle it in cash, keep Due to and Due from netting to zero, and allocate shared payroll and rent as the agreement says. Our fractional controller service owns this reconciliation for multi-entity practices.

It depends on the state, and the answer decides your entity structure before you sign a lease. AmSpa's 2024 industry report found 67% of single-owner med spas are owned by non-physicians, so non-MD ownership is common, but how it is done varies. In California, physicians must hold the majority of a medical corporation; nurses, NPs and PAs together may hold no more than 49%. In Texas, non-physician owners typically operate through an MSO, and physician assistants may hold only a minority interest alongside physicians. In New York, the practice must be a physician-owned PC or PLLC; non-licensed owners can own only the management company. Florida has no corporate-practice-of-medicine statute of that kind but regulates clinics under the Health Care Clinic Act. Confirm with a health-care attorney licensed in your state. Our med spa accounting page links to each state's detail.

Everything gets tracked twice. Set up the new location as its own location or class in QuickBooks Online and in the POS on day one, so you get a P&L by location rather than one blended number, and decide how shared costs such as the medical director, marketing and your own salary are allocated. A location in another state creates sales tax nexus and payroll registrations there immediately; in the same state it means updating your sales tax and unemployment accounts. Packages and gift cards sold at one location and redeemed at the other need a liability readable by location. Devices and equipment qualify for 100% bonus depreciation, which can wipe out the year's taxable income before cash catches up. Model payback before signing. Our opening a med spa setup checklist applies to location two as well.

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It is a rolling, week-by-week projection of cash in and cash out for the next quarter, and a med spa with payroll, product orders and a device loan needs one more than most businesses. Treatment revenue arrives as POS deposits a few days after the appointment, net of merchant fees; payroll leaves every two weeks, injectable orders arrive in lumps, sales tax is due around the 20th in most states, estimates land quarterly and the laser payment hits monthly. Package and membership sales make the forecast dangerous: the cash shows up now, but the treatments, injector commissions and product cost follow over months. The forecast shows the lowest cash week ahead and how much you can safely distribute. Our guide to the 13-week cash flow forecast for a med spa includes the template logic and a worked example.

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Because several of the largest cash outflows in a med spa never touch the profit and loss: loan principal on the laser, injectable and retail inventory bought ahead of use, equipment purchases, owner distributions and income tax payments all reduce cash without reducing profit. The reverse also happens with prepaid packages: under accrual accounting the cash came in months ago when the package sold, and this month's profit includes revenue from treatments you are delivering without new cash. On cash-basis books the picture flips, with package sales inflating profit while the obligation to deliver sits unrecorded. A balance sheet that states the package liability correctly, a debt schedule and a weekly cash forecast reconcile the two numbers. Our guide to why your med spa shows a profit but has no cash walks through each cause.

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Books a lender can read without calling you. Lenders and equipment lessors ask for business tax returns, year-to-date financial statements closed within the last few months, a debt schedule, personal financial statements and projections, and a med spa has three extra items to get right: the outstanding package, membership and gift-card liability stated on the balance sheet, because a lender will treat it as debt-like; provider compensation documented as W-2 payroll; and, in an MSO structure, both entities' statements with the management fee reconciled. Projections should be built from provider capacity and treatment mix, not a growth percentage on last year. Device financing goes faster when the payback model shows utilization at realistic levels rather than the vendor's. Our fractional CFO service prepares bank-ready packages for practices doing this for the first time.

Three years of clean monthly financials and a liability picture they can trust. A buyer's quality-of-earnings review recalculates EBITDA after a market salary for the owner-injector, then subtracts the outstanding package, membership and gift-card balances as debt-like items, so a practice with $150,000 of unredeemed packages that were booked as revenue will see that come off the price (illustrative). Buyers test whether injectors are W-2 employees and whether they will stay, count the injectable inventory, read the medical director agreement, check sales tax on retail and look at whether the MSO and professional entity comply with the state's ownership rules. Deal structure matters too: an asset sale and a stock sale leave the seller with very different after-tax proceeds. Start the cleanup 12 to 24 months out. Our guide to selling a med spa covers taxes and clean books.

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When the books are being recorded but nobody is proving them right: packages outstanding in the POS do not match the balance sheet, injectables have never been counted, the month closes whenever the bookkeeper gets to it, or the MSO and professional entity carry an intercompany balance nobody can explain. The fractional tier fits practices past about $1 million, with two or more locations, or with an MSO structure; the controller role also pays off when a lender asks for covenant reporting. A controller owns the close date, the reconciliations, the package liability rollforward, inventory, provider pay tie-outs and cash controls such as dual approval over refunds; your bookkeeper keeps the daily recording. Our fractional controller service is scoped after a diagnostic and quoted as a flat monthly fee; Med Spa Core already includes a reviewed close for single-entity practices.

When the decisions get bigger than the monthly reports: a $150,000 device, a second location, a new injector compensation plan, an MSO structure, outside financing or a sale within two years. Up to about $1 million of revenue at a single location, Med Spa Core with its KPI sheet usually answers the questions an owner has. Past that, a fractional CFO runs a monthly meeting with a written agenda, maintains the 13-week cash forecast, builds the budget from provider capacity and treatment mix, models compensation and device payback before you commit, and prepares bank- and buyer-ready packages. The work only makes sense on books that close every month, so the diagnostic comes first. Our fractional CFO service is delivered personally by Jenny Gao, CPA, EA, and quoted as a flat monthly fee after that diagnostic.

Plans the tax year while it is happening instead of reporting it afterward. For a med spa that means the S-corp election and a defensible salary for an owner-injector; how the QBI deduction's health specified-service rules apply to the practice and to an MSO; the management fee's timing and deductibility between related entities; Section 179 and bonus depreciation modeled before a device is signed for; sales tax and payroll registrations when you ship skincare or open across a state line; retirement plan design sized to the owner's pay; quarterly projections with recalculated estimates; and IRS or state notices answered by an Enrolled Agent. It fits practices past about $1 million, multi-entity or multi-state. Tax planning and returns are already included in Med Spa Core for most single-entity practices; the fractional tax director service is scoped after a diagnostic.

Balance Partners is a CPA-led accounting, tax and fractional CFO practice that works only with med spas and aesthetics practices. The monthly work covers bookkeeping and a close by the tenth business day, package, membership and gift-card liabilities tied to your POS, injectables and retail inventory, provider commission tie-outs to payroll, retail sales tax by state, payroll coordination, and business and owner tax planning and returns. Practices past about $1 million, with two or more locations or with an MSO and professional entity, can add fractional controller, CFO or tax director work. The practice is based in Tampa, Florida, works remotely with med spas in all 50 states, and every file is reviewed by Jenny Gao, CPA, EA. See how a med spa engagement works.

Med Spa Core fits single- or two-location practices doing roughly $500,000 to $5 million a year, including funded practices about to open, that sell packages or memberships, carry injectables inventory and pay providers through W-2 payroll. Fractional leadership fits practices past about $1 million, with two or more locations, or with an MSO alongside a professional entity. Not a fit: pre-revenue solo startups without a funded opening plan, owners who only want a tax return filed, owners shopping on price alone, and other accounting firms looking for capacity, because the practice takes no white-label, overflow or subcontracted work and pays no referral fees. If the fit is not there, we say so on the first call. Details are on the Med Spa Core page.

Med Spa Core starts at $1,500 a month for a single-location, single-entity practice with clean books; the fee rises with locations, entities, providers on commission, prepaid package balances, inventory and the states you file in. Fractional controller, CFO and tax director work is scoped after a diagnostic and quoted as a flat monthly fee, and no price is published because it depends on entities, locations and the cadence you want. Cleanup and catch-up is quoted as a one-time fixed project. In every case you receive a written scope and a flat fee before work starts, with no hourly invoices after. Our guide to what med spa accounting should cost explains what drives the number.

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No. Med Spa Core is month-to-month after onboarding, with thirty days' written notice either way, and fractional leadership engagements follow the same terms. Cleanup and catch-up work is a fixed-price project with a defined end rather than a recurring commitment. Onboarding is the only period with a set length, because rebuilding package liabilities, inventory and POS mappings for a med spa takes a few closes to settle. After that the practice earns the engagement every month: if the reports are late or the package liability does not tie to your POS, you can leave. See how pricing works for the full terms.

Jenny Gao, CPA, EA, a Florida-licensed Certified Public Accountant and IRS Enrolled Agent with more than 13 years of corporate and public accounting and tax experience, personally reviews every med spa client's close and tax work; fractional controller, CFO and tax director engagements are delivered by her directly rather than handed to a junior team. Questions from owners, whether about a device lease, a new membership tier or an injector's pay plan, get a specific answer in plain English within one business day. There is no rotating team and no ticket queue; the person who knows your package liability and your inventory counts is the person who answers. Read more about the practice and its credentials.

The first thirty days are onboarding. We connect QuickBooks Online, bank and card feeds, your POS or EMR reports and payroll, then map every POS report, such as sales by service and product, outstanding package and membership balances, gift-card liability and provider production, to the general ledger so the numbers tie out. We rebuild the chart of accounts around service lines, establish the opening package and gift-card liability, count and value injectables and retail, and set the close calendar. If the diagnostic found history that needs cleanup, that fixed project runs first so monthly service starts from a clean balance sheet. Our guide on the first 30 days of onboarding walks through each week.

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Four things: accountant access to QuickBooks Online, read-only bank and credit card feeds through QuickBooks, a reporting or admin login to your POS or EMR, such as Aesthetic Record, Boulevard, Zenoti, Vagaro, Mindbody, Nextech, PatientNow or Jane, and reporting access to payroll in Gusto, ADP, Paychex or QuickBooks Payroll. POS access matters most, because package balances, gift-card liability, provider production and sales tax collected come from those reports, not from the bank statement. We do not move money; where bill pay is in scope, payments are queued and the owner authorizes every one. You keep your systems and we make the numbers tie. See our guide to med spa software and POS integrations.

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It can, but it does not have to. Many med spas keep a front-desk lead or part-time bookkeeper who enters bills, runs the POS day sheet and chases receipts, and Balance Partners takes over the pieces a med spa bookkeeper usually cannot: the month-end package and membership rollforward, injectables inventory and cost of goods sold, commission accruals tied to payroll, sales tax reconciliation, the close itself and the tax work. Practices with no one in-house have the full bookkeeping done by us under Med Spa Core. Either way, one CPA reviews the result before you see it. Our guide on bookkeeper, accountant, controller or CFO explains which role a practice needs at each stage.

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Yes. Cleanup and catch-up is a one-time fixed project quoted after a diagnostic of your QuickBooks file, POS exports, payroll records and prior returns, and it does not require a monthly commitment. The usual med spa findings are packages booked as revenue when the card was charged, injectables expensed when purchased, commissions paid on package sales rather than redemptions, merchant fees netted against revenue, a swollen undeposited-funds balance and personal items in the business accounts. We rebuild the history, state the package and gift-card liability correctly, and prepare any unfiled returns from the corrected books. Monthly service, if you want it, then begins from a clean opening balance. Details are on the cleanup and catch-up page.

No. Balance Partners does not provide audit, review, compilation or other attest services, and it gives no legal or medical advice. The practice provides accounting, bookkeeping, the monthly close, sales tax, payroll coordination, tax planning, tax returns and fractional controller, CFO and tax director services to med spas. If a lender, landlord or buyer asks your practice for audited or reviewed statements, we prepare the closed, reconciled books and the supporting schedules, such as the deferred-revenue rollforward and inventory counts, that an independent auditor would start from. Many lenders and equipment lessors accept internal financial statements produced from CPA-reviewed books, together with filed tax returns, instead. See the full list of med spa services.

Switch right after a month-end close, give your current accountant written notice, and have them hand over QuickBooks Online admin rights, the last filed returns, the depreciation schedule for your devices, payroll tax filings and every sales tax registration before access is cut off. Balance Partners then runs a diagnostic, reconciles the opening balance sheet, in particular the package, membership and gift-card liability against your POS outstanding-balance report, and takes over the close for the next month. The weeks after a filing deadline are the easiest time to switch, and year-end works when the handoff is complete before January; a mid-year switch simply means the prior accountant finishes the periods they closed and we pick up from there. Our guide on switching accountants has the handoff checklist.

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