Year-End Tax Planning for Med Spas: The 2026 Checklist

Most of what a med spa can still do about its 2026 tax bill has to happen between now and December 31, and several of the most valuable moves have to run through a December payroll. The trouble is that year-end planning usually arrives as a generic list of twenty items, half of which have nothing to do with a practice that carries injectable inventory, sells gift cards in bulk every December, and pays its providers on commission. What follows is the order we work the list with aesthetics clients in November, starting with the items worth the most or expiring soonest.

One rule before the list: test every move against a projection of your 2026 taxable income built from closed books, not against a hunch. A deduction is worth your marginal rate and nothing more, and a few of these moves also change your qualified business income deduction, so they have to be run together.

Step one: know your number

Get the books reconciled through October, including the package and gift-card liability rollforward tied to the POS, the injectable inventory count and the commission accrual, then project November and December from your promotional calendar. Then convert to the tax basis: if your return is on the cash method, deferred revenue sitting as a liability on the balance sheet is income when the money was received, and product in the refrigerator is not a deduction under either method. For an S corporation the projection produces two numbers, the ordinary income headed for your K-1 and the W-2 salary you have paid yourself so far; for a single-member LLC it is one number, Schedule C net profit, which drives both income tax and self-employment tax.

That number sets your marginal rate under the 2026 brackets in Rev. Proc. 2025-32: a married couple filing jointly is in the 24% bracket from $211,400 to $403,550 of taxable income and 32% above that; a single filer hits 24% at $105,700, 32% at $201,775 and 35% at $256,225. It also tells you where you sit against the QBI thresholds of $403,500 joint and $201,750 single, which for a practice likely to be treated as a health business is the most important line on the page.

The 2026 checklist, in priority order

1. Catch up estimated taxes, or fix them through payroll. The fourth 2026 installment is due January 15, 2027. The safe harbor is 90% of 2026 tax or 100% of 2025 tax, 110% if 2025 AGI exceeded $150,000. An S-corp owner who is behind should run extra federal withholding through December payroll, because withholding is treated as paid evenly through the year and cures the earlier quarters. Details in quarterly estimated taxes for med spa owners.
2. Place equipment in service by December 31. A device you were going to buy in the first quarter anyway can be deducted in full in 2026 through 100% bonus depreciation (permanent for property acquired and placed in service after January 19, 2025) or Section 179, whose 2026 limit is $2,560,000 with a phase-out beginning at $4,090,000 of purchases. The test is placed in service: delivered, installed, and ready for use, not ordered, not paid for, not financed. A laser platform invoiced December 29 and installed January 6 is a 2027 deduction. Section 179 is limited to business taxable income; bonus is not and can create a loss. Build-out of a leased suite generally qualifies as qualified improvement property. Our Section 179 and bonus depreciation guide covers which to elect.
3. Prepay under the 12-month rule, if you are cash-method. A cash-method practice can deduct a prepayment for a right or benefit that does not extend beyond 12 months after it begins or the end of the following tax year, whichever is earlier: an annual malpractice or general-liability premium, a year of EMR or booking software, January rent paid in December. This moves a deduction, it does not create one, so only do it with money you would spend soon anyway and only if 2027 is not a higher-rate year.
4. Count the inventory. Neurotoxin by unit, filler and biostimulators by syringe or vial, threads, peels, numbing agents and every retail SKU, counted on or as close to December 31 as you can manage, by lot, with expired product pulled and written off. Product on hand is not a 2026 deduction. A December stock-up to reach a manufacturer rebate tier is a cash and inventory decision, not a tax move, and treating it as one is the most common year-end error we see in med spa books. See inventory accounting for injectables and retail.
5. Review the gift-card and package liability. Reconcile outstanding gift-card balances, unredeemed package sessions and membership credits in the POS to the general ledger before the holiday push adds to them. On a cash-method return every December gift card is 2026 income; on an accrual-method return the practice may defer advance payments one year under Section 451(c) but no further, so packages sold in late 2025 and still unperformed must be picked up in 2026. Florida gift certificates may not carry an expiration date or post-sale fees under Florida Statutes §501.95, and other states have their own rules, so breakage is a policy question before it is a tax one.
6. Fund a retirement plan, and respect the entity-specific deadlines. For 2026 the elective deferral limit is $24,500, plus an $8,000 catch-up at 50 or $11,250 at ages 60 to 63, and the combined employee-plus-employer limit is $72,000. The deadlines are where owners get hurt; see the table below. A SEP must contribute the same percentage for every eligible employee, which in a practice with six providers gets expensive fast.
7. True up the owner's salary and put health insurance on the W-2. If an owner-injector's salary has been below reasonable compensation for the treatments she performed, run the true-up or a bonus through payroll before December 31, not as a January distribution. Premiums the S corporation paid for a more-than-2% shareholder must be reported in Box 1 of the W-2 for the shareholder to deduct them; tell Gusto, ADP or Paychex in December. Our reasonable-salary guide for owner-injectors covers how to set the number.
8. Collect W-9s for the new $2,000 1099 threshold. Forms 1099-NEC and 1099-MISC are required for 2026 payments of $2,000 or more, up from $600. That reaches the medical director (reportable even when paid through a professional corporation, because the corporate exemption does not cover medical and health care services), contract injectors, the marketing agency, the landlord and the cleaning service. Card payments are excluded; the processor reports them on Form 1099-K. Forms are due January 31, 2027, a Sunday, so the practical deadline is Monday, February 1. Details in 1099-NEC for med spas.
9. Make entity changes effective January 1. An LLC that wants S corporation treatment for 2027 must file Form 2553 within two months and 15 days of the start of the year, so by March 15, 2027, but filing in December with a January 1 effective date is cleaner because payroll has to exist from the first paycheck. A move into an MSO and professional-entity structure should also land on January 1 so the POS merchant accounts, payroll and books start clean. Late S elections can be fixed under Rev. Proc. 2013-30.
10. Take BOI off the list. FinCEN's final rule of August 11, 2026 permanently removed the beneficial ownership reporting requirement for U.S. companies and U.S. persons; only certain foreign entities still report. Solicitations to file for a fee are a red flag.

Retirement plan deadlines for a med spa owner

The limits come from IRS Notice 2025-67. For a self-employed owner, compensation for the employer contribution is net earnings after half of self-employment tax and the contribution itself, which works out closer to 20% of net profit than 25%. Most med spas have staff, which rules out the solo plan; the SEP's uniform-percentage rule and the 401(k)'s plan-design lead time are the reasons this item belongs in a September conversation, not a December one.

Worked example: a single-location practice in Dallas (illustrative)

An illustration with round numbers, not a client. A nurse practitioner owns a single-location practice in Dallas, Texas, taxed as an S corporation, with two other injectors, an aesthetician and a front-desk coordinator on payroll, about $1.2 million of revenue and a 401(k) already in place for the team. She is a single filer taking the standard deduction. In early November the projection shows $200,000 of ordinary income on her K-1 after her $100,000 salary. Her CPA has concluded the practice should be treated as a health specified service business for QBI purposes. Texas has no personal income tax.

With no planning: $300,000 of income, a $16,100 standard deduction, taxable income of $283,900. That is above the $276,750 top of the single phase-in range, so her QBI deduction is zero, and her 2026 federal income tax is about $68,100, with the top dollars taxed at 35%.

Two moves, both done by December 31: she takes delivery of and installs the $70,000 energy-based device she had scheduled for February and expenses it in full, and she defers the full $24,500 into the 401(k) through the remaining December payrolls.

The difference is about $36,300. The device was going to be bought anyway; moving it eight weeks earlier put the deduction in a 35% year. The $24,500 is in her retirement account, not spent. And dropping under the single threshold brought back a $26,000 QBI deduction that the SSTB rules had taken away entirely, which is the hidden third move inside the first two. Three things the table does not show: her Social Security and Medicare taxes did not change, because 401(k) deferrals reduce income tax, not FICA; the device deduction is timing, not a permanent saving, since it will not be deducted again in 2027; and if her CPA had concluded the practice is not a health SSTB, the no-planning tax would have been about $54,500 and the saving about $22,700, still worth the November meeting. The December payroll should also carry the extra federal withholding that brings her to the 110% safe harbor.

What usually goes wrong

The classic mistake is buying a device for the deduction rather than for the patient volume. A $120,000 platform the schedule cannot fill saves perhaps $40,000 of tax and costs $80,000 of cash, before the service contract and the consumables. The med spa version is subtler: owners order $40,000 of neurotoxin in December because "it's deductible," and it is not; product on hand is inventory. Prepaying expenses you would not otherwise prepay just moves a deduction into a year where it may be worth less.

The second cluster is deadlines earlier than people think. An S-corp owner's 401(k) deferral has to come out of a 2026 paycheck; there is no January fix. Health insurance left off the W-2 turns a deductible premium into a nondeductible one. A device delivered but not installed by December 31 is the most common reason a projected refund becomes a balance due. And the December gift-card promotion, run without telling the CPA, lands as 2026 income on a cash-method return after the estimates were set, producing a surprise in April and a penalty on top.

When to get help

If your 2026 profit will differ meaningfully from 2025, or your taxable income is anywhere near the QBI thresholds, the projection is worth running with someone who can model the device, the retirement contribution, the salary true-up and the QBI effect together, because each one changes the others. That is the core of our med spa tax planning and preparation work inside the Med Spa Core engagement: a November projection from closed books, a short list of moves with dollar values attached, and the payroll, plan and 1099 paperwork handled through the December close.

None of it works on unreconciled books, so if the POS has not been tied to QuickBooks since the summer, that is the first job and we quote it as a fixed cleanup project. Either way the conversation is short: request a 20-minute fit call and bring your year-to-date P&L and the device quote you are sitting on.

Jenny Gao, CPA, EA

Founder of Balance Partners, a CPA-led accounting, tax and fractional CFO practice for med spas. Florida-licensed CPA and IRS Enrolled Agent with more than 13 years of accounting and tax experience. Jenny writes and reviews every guide on this site. About Jenny

This guide is general educational information for owners of med spas and aesthetics practices in the United States and is not accounting, tax, legal, medical, payroll or financial advice for your situation. Rules change and vary by entity, state and facts. Balance Partners, LLC does not provide audit, review, compilation or other attest services. Last reviewed November 8, 2026.