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Bookkeeping for Doctors: Manage Practice Finances With Confidence Running a medical practice is a complex endeavor that demands your time and expertise in patient care. Yet, the financial side of your practice — from tracking expenses to managing revenue cycles — requires just as much attention to ensure your business thrives. Bookkeeping for doctors is a vital element that can be overlooked, but mastering it allows you to steer your practice with confidence and clarity. Whether you’re just starting a private practice, running a small group, or managing an established clinic, these insights will help streamline your financial management and free you up to focus on patient care. We can make sure your books are reconciled, reviewed and expenses classified and accounted for by the year end and ready for your CPA for filing taxes.

2025 TAX UPDATES Tax rates on long-term capital gains and  qualified dividends do not change. But the income thresholds to qualify for the various rates go up for 2026. The 0% rate applies at taxable incomes up to $98,900 for joint filers, $66,200 for heads of household and $49,450 for singles. The 20% rate starts at $613,701 for joint filers, $579,601 for heads of household and $545,501 for single filers. The 15% rate is for filers with taxable incomes between the 0% and 20% break points. AMT AMT exemptions rise for 2026 to $140,200 for joint filers and $90,100 for single filers. The exemption phaseout zones begin at $1,000,000 for joint filers and $500,000 for singles. The 28% AMT rate kicks in above $244,500. STANDARD DEDUCTION Standard deductions are a bit higher for 2026. Joint filers get $32,200, plus $1,650 for each spouse 65 or older. Singles can take $16,100…$18,150 if age 65 or up. Heads of household get $24,150 plus $2,050 once they reach 65. Blind people receive $1,650 more ($2,050 if unmarried and not a surviving spouse). IRAs & PLANS Key dollar limitations on retirement plans and IRAs are higher in 2026. The maximum 401(k) limit is $24,500. And catch-ups change. People born before 1977 can put in $8,000 more. The catch-up for people age 60-63 is $11,250. The cap on most SIMPLEs rises to $17,000, plus $4,000 more for people 50 and older. If age 60, 61, 62 or 63 in 2026, the $4,000 figure is replaced with $5,250. The 2026 contribution cap for traditional and Roth IRAs increases to $7,500, plus $1,100 as an additional catch-up contribution for individuals 50 and older. The income ceilings on Roth IRA payins increase. Contributions phase out at AGIs of $242,000 to $252,000 for couples and $153,000 to $168,000 for singles. 2026 deduction phaseouts for traditional IRAs are at higher income levels, from AGIs of $129,000 to $149,000 for couples covered by workplace retirement plans and $81,000 to $91,000 for singles. If only one spouse is covered, the phaseout for deducting contributions for the uncovered spouse is $242,000 to $252,000 of AGI. The IRA qualified charitable distribution cap is $111,000 for 2026. People who are 70½ or older can transfer up to $111,000 from their traditional IRAs directly to charity. QCDs can count as part of your required minimum distribution, but they are not taxable, and they are not included in your adjusted gross income. A new rule that applies to catch-up contributions to 401(k)s begins in 2026. Employees who are 50 and older, and whose annual compensation exceeds $150,000 in 2025, can make 401(k) catch-up contributions only to a post-tax Roth 401(k). And an exception to the 10% penalty on early 401(k) payouts goes into effect: You can take $2,600 of pre-59½ distributions per year to pay long-term-care premiums.

529 PLAN CONTRIBUTION AND QUALIFIED EXPENSES   529 plans are a great college savings option. And surprise…they aren’t just for college. Let’s review some key features of these plans. Contributions to 529 plans are treated as gifts to the beneficiary, so generally you can’t contribute more than the annual gift exclusion amount each year… $19,000 in 2025…per beneficiary. But there’s a twist. You can bunch up to five years of 529 contributions. If you do this in 2025, you can contribute $95,000. You’ll be treated as gifting $19,000 to that beneficiary in 2025 and in each of the next four years…2026-29. You can’t deduct contributions to 529 plans on your federal tax return. But many states give residents a deduction or credit on state tax returns. Distributions from 529 plans used for college are tax-free. Eligible expenses include the cost of room and board for students enrolled at a college or university at least half-time, tuition, books, supplies, fees, computers and internet access. 529 funds can cover off-campus housing, food and utilities, but the tax-free payout can’t exceed the room and board allowance included in the school’s cost of attendance. 529 funds can also be used tax-free for certain apprenticeship programs. The cost of many postsecondary credentialing programs is now 529-eligible. 529 plans can help pay for K-12 education as well. Tax-free payouts of up to $10,000 per year per beneficiary ($20,000 per year beginning in 2026) can be taken from 529 accounts to pay tuition for elementary and secondary schools. The “One Big Beautiful Bill” has expanded this tax break, so that tax-free payouts can also cover the costs of materials for curricula and online studying, books, educational tutoring, fees for advanced placement tests or college admission exams, and educational therapies performed by a licensed provider to students with disabilities. This OBBB easing begins with distributions from 529 accounts made after July 4, 2025. Note that tax-free 529 payouts cannot be made to cover homeschooling expenses. Also, not all states treat payouts for K-12 schooling as tax-free for state-tax purposes. 529 PLANS AND LEFTOVER MONEY.   What if the beneficiary opts to skip college or a credentialing program… Or there is leftover money? There are options for the unused 529 funds: Pay off college debt of the account beneficiary. Up to $10,000 from 529s can be used for this without having to pay federal income tax on the withdrawal. It’s important to note that this $10,000 is a lifetime limit, not an annual limit. Roll over money to a 529 account for another family member’s education. Transfer funds to an ABLE account for a disabled beneficiary or sibling. Some 529 funds can be rolled over tax-free to a Roth IRA for the beneficiary in a trustee-to-trustee transfer, subject to many rules. There’s a lifetime $35,000 cap. The 529 account must have been open for at least 15 years, with the same beneficiary. 529 payings made in the prior five years can’t be rolled over. Annual rollover amounts can’t exceed the yearly contribution limit for Roth IRAs, which is $7,000 for 2025.  

The Oct. 15 deadline is nearing for taking several important actions: Filing 2024 returns on extension of individuals and calendar-year C corps, with the exception of tax returns for taxpayers in federally declared disaster areas, the due dates of which have been automatically extended by the Revenue Service. Taking these retirement-related steps: Making a 2024 contribution to a Keogh plan that was established before Jan. 1, 2025. Setting up a SEP-IRA for your business and depositing funds for 2024. Plus withdrawing excess IRA payins. Reporting foreign accounts for 2024 if you haven’t already done so. U.S. individuals must report overseas accounts if, in 2024, the total combined balance at any time in the accounts exceeded $10,000. E-file FinCEN Form 114 to report them.

IS CP2000 NOTICE AN AUDIT? What should you do if you received a CP2000 notice from IRS in the mail?These letters inform you that IRS computers found a significant discrepancybetween income and deductions that you reported on your income tax returnand data on third-party information returns, such as Forms W-2, 1099 and 1098.Check your records. If you agree with the proposed changes on the notice,sign and date it, and return it with your payment. Ask for an installment agreementif you can’t pay the full amount. Interest accrues until the amount is fully paid.If you don’t agree, check the appropriate box on the form, submit it to IRSwith a written explanation and attach copies of any documentation that you have.Respond in a timely manner, generally within 30 days of the letter’s date.Contact IRS to request more time if you need it. Just don’t ignore the CP2000.If you don’t reply, IRS may send you another notice and include a bill of tax owed.