Tax planning for a med spa starts in the books
The tax return of an aesthetics practice is decided long before the preparer opens the file. Whether the $40,000 of packages sold in December is income this year depends on the accounting method and on whether the liability was ever recorded. Whether the $30,000 of filler in the refrigerator is a deduction depends on whether it was booked as inventory or as an expense. Whether the owner-injector's S-corp salary holds up depends on whether anyone wrote down why it is what it is. A preparer who sees the file in March inherits all of those decisions, already made badly.
That is why tax work at Balance Partners is attached to the monthly close. The CPA who tied the package rollforward to the POS projects the year's income from it each quarter, and the return is prepared from books that reconcile. There is no separate tax-season conversation in which the books get adjusted to fit the return. Our guide on tax planning versus tax preparation explains what the difference buys you.
The decisions we plan, and when
| Decision | What we look at | When it is decided |
|---|---|---|
| S-corp election | Projected profit after a reasonable owner salary; the payroll cost of the election; whether your state requires a professional entity that changes the entity question | Before the year begins, or within two months and fifteen days of its start (Form 2553) |
| Owner-injector salary | Production by provider, the share of the owner's time spent injecting versus managing, published wage data; documented in writing | Set at the start of the year; revisited at the third-quarter projection |
| Device or build-out | Section 179 (a $2,560,000 limit for 2026) versus 100% bonus depreciation; the Section 179 taxable-income limit; state conformity; the loan's effect on cash | Before the purchase contract is signed, and no later than the fourth-quarter projection |
| QBI deduction | Whether the practice's income is health specified-service income; the owner's taxable income against the 2026 thresholds of $201,750 (single) and $403,500 (joint); the effect of salary and any MSO fee | Third-quarter projection, while there is still time to move compensation |
| Estimated payments | Year-to-date closed books, projected fourth quarter, and the 90% current-year or 100% (110% for higher incomes) prior-year safe harbors | April 15, June 15, September 15 and January 15 |
| 1099s | Medical director, contract providers, landlords and vendors paid $2,000 or more in 2026; W-9s on file | Vendor review in November; forms filed by January 31 |
| Retirement contributions | Owner compensation, staff census, cash position; SEP-IRA, solo or group 401(k) | Plan chosen by year-end; funded by the return's due date where the plan allows |
An illustrative year
An illustration, not a client. A nurse-practitioner-owned single-location practice in Florida does $1.5 million a year and is taxed as an S corporation. After provider pay, product cost and overhead, profit before the owner's salary runs about $300,000. In October she decides to finance a $120,000 energy device for delivery in December.
Planning that purchase in October rather than discovering it in March changes four things. The projection shows the device can be written off in full in 2026, under 100% bonus depreciation or under Section 179 up to the practice's taxable income, so the practice's 2026 profit before her salary falls from roughly $300,000 to $180,000 and the January 15 estimate is recalculated down. Her $90,000 salary is tested against that lower profit so distributions do not run ahead of reasonable compensation. The QBI analysis is re-run, because her taxable income now sits in a different place relative to the $201,750 threshold and the health phase-out. And because Florida has no personal income tax, the state side of the plan looks nothing like it would for the same practice in Arizona or Georgia, which is why the state answer is worked out practice by practice. None of this needs a loophole. It needs knowing in October what the books will say in December.
Returns we prepare, and when they are due
For a calendar-year practice: Form 1120-S or Form 1065 by the fifteenth day of the third month, March 15, with Schedule K-1s to the owners; the owner's Form 1040 by April 15; Forms 1099-NEC and 1099-MISC by January 31, which for 2026 payments becomes February 1, 2027 because January 31 falls on a Sunday; and every state return the practice owes, on that state's calendar. Extensions are filed when they serve the plan, such as a retirement contribution funded by the extended due date or a K-1 arriving late from another entity, not because the books were late. Because the December close happens on the same calendar as every other month, the business return is prepared from final numbers in February, not from a draft in March.
Every return carries the med spa items a general preparer tends to miss: the deferred-revenue liability and its year-over-year change, injectables and retail inventory, the commission accrual, the medical director fee and its 1099, the device depreciation elections, and the health-SSTB analysis on the owner's QBI worksheet. Our guide to med spa tax deductions lists what should be on the return and what should not.
When the IRS or the state writes
Notices come to med spas for ordinary reasons: a payroll deposit posted a day late, an estimated payment applied to the wrong year, a Form 1099-K from the merchant processor that does not match gross receipts on the return because tips and sales tax were inside it, a state sales tax desk audit on retail. Jenny Gao is an IRS Enrolled Agent as well as a Florida-licensed CPA. The IRS describes enrolled agents as having unlimited practice rights: unrestricted as to which taxpayers they represent, which tax matters they handle and which IRS offices they appear before.
In practice that means we read the notice, pull the account transcripts under a Form 2848 power of attorney, respond with the reconciliation that explains the difference, and request penalty abatement where the facts support it. We cannot promise an outcome. We can promise that you are not the one on hold with the IRS, and that the answer going back is built from books we closed. Sales tax audits are handled under the sales tax compliance scope; our guide to IRS and state notices for med spa owners explains what the common letters mean.