What tax deductions are available to medical practices?

Medical practices deduct expenses across several IRC categories. Section 162 covers ordinary and necessary business expenses: staff wages, rent, utilities, malpractice insurance, professional dues, CME, supplies, marketing, professional fees. Section 167 and 168 cover depreciation of equipment and improvements over MACRS recovery periods. Section 179 allows immediate expensing of qualifying equipment up to $2.5M for tax years beginning after Dec 31, 2024 (per OBBBA, Public Law 119-21, signed July 4, 2025), with a phase-out threshold of $4M; for tax year 2026, Rev. Proc. 2025-32 sets the inflation-indexed limits at $2.56M / $4.09M. Bonus depreciation under Section 168(k) is permanently reinstated at 100% for property acquired and placed in service after January 19, 2025 (reinstated by OBBBA). Retirement plan contributions under SEP, SIMPLE, 401(k), and defined benefit plans are deductible within IRS limits: for 2026 the defined contribution limit is $72,000 per participant, and a defined benefit plan can pay an annual benefit of up to $290,000, which is why cash balance contributions for older owners can run far higher. Section 199A QBI deduction can deduct up to 20 percent of qualified business income for pass-through entities, subject to specified service trade or business (SSTB) limitations on income above thresholds. OBBBA made the deduction permanent.