ProAxis Resources for NJ Medical & Dental Practices

Why Medical Practices Need a Specialist CPA

High-earning NJ physicians face the highest combined federal + state marginal tax rate in the country — and a series of tax challenges nearly unique to the medical profession. Five mechanisms drive physician tax savings:

• Defined-benefit pension plans allow $100,000-$300,000+ in annual deductible contributions for physicians age 45+, far beyond Solo 401(k) limits.
• S-Corporation election for owner-physicians cuts self-employment tax by splitting profit into reasonable W-2 salary and distributions.
• QBI deduction phase-out management — physician income is SSTB; the 20% deduction disappears entirely above income thresholds, so income-shifting strategies become critical.
• NJ BAIT election for pass-through practices saves $10,000-$30,000+ per partner per year by bypassing the federal SALT cap.
• Section 179 + bonus depreciation on medical equipment timed strategically across years for income smoothing.

ProAxis specializes in solo physicians, group practices, multi-physician medical groups, and dental practices across NJ. Each engagement begins with a retirement plan review (most practices have a SEP-IRA when a defined-benefit plan would deduct 4-5x more), entity-structure analysis (PC vs PLLC vs Partnership of PCs), and a 3-year prior-return audit to identify missed deductions.

ProAxis has helped high-earning physicians who stacked all five mechanisms see annual tax outcomes more than $80,000 better than a no-planning baseline. Results vary by practice profile, retirement plan capacity, entity structure, and household tax position; some practices see substantially less and some see no net benefit. The catch: each mechanism requires year-round planning, not annual return preparation. By the time a physician sees their tax return in March, the prior year's planning opportunities are closed. See Disclaimer.

ProAxis Services for Medical & Dental Practices

Key Glossary Terms for Physicians

• QBI Deduction (Section 199A)

  20% deduction phased out for SSTB physicians above income thresholds

• S-Corporation Election

  Form 2553 election for self-employment tax savings

• Section 179 Deduction

  Immediate expensing of medical equipment

• Bonus Depreciation

  Accelerated depreciation paired with Section 179

• NJ BAIT Election

  Pass-through entity tax bypassing federal SALT cap (high-value for physician PCs)

Blog Posts & Guides for Medical Practice Owners

• NJ Small Business Tax Deductions 2026: Complete Guide
• S-Corp vs LLC in New Jersey: Which Structure Saves More Tax in 2026?
• NJ SALT Tax 2026 — BAIT Election & SALT Cap Workaround
• Bookkeeper vs CPA-Supervised Bookkeeping vs DIY: 2026 NJ Guide