Stop overpaying for taxes! Here’s how you can save your practice from paying thousands in 2025

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For many physicians, tax planning is a necessary chore that often takes a back seat to patient care. Though understandable, this delay frequently results in overlooked deductions, unexpected liabilities and a scramble to submit last-minute paperwork. But when you take a proactive approach to attend to this matter, you’ll turn these missed opportunities into significant savings. Starting your 2025 tax planning now — rather than waiting until the final week — ensures you have time to assess, adjust and optimize your financial standing without unnecessary stress or last-minute uncertainty.

Below are the core tactics for taking control of your tax profile early in the year to help you position yourself and your practice to avoid costly surprises and keep more of your hard-earned money working for you.

Income types, tax strategies and passive loss tracking

Tal Binder
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Not all income is taxed the same. For instance, your W-2 wages or profits from your medical practice are considered active income. On the other hand, rental real estate or other investments you’re not actively managing are treated as passive income, with different rules on how losses can offset profits. Understanding these distinctions can unlock opportunities to optimize your taxes.

If your practice is structured as a partnership, you’ll likely file a Schedule K-1, which reports your share of the partnership’s income, deductions and credits. Passive losses (such as those from real estate investments) can generally offset only passive income. You cannot use these losses to reduce active income like wages or K-1 earnings unless you qualify as a real estate professional.

Mind you, attaining real estate professional status is not a walk in the park. For many full-time practitioners, it’s unlikely you’ll meet the hours requirement. Consequently, you’ll need to explore other advanced structuring options — like forming the right type of holding entity or carefully timing your passive investments — to optimize your overall tax exposure.

Finally, remember that tax benefits should always be an enhancer, not your principal reason for investment. If you’re considering buying the building your practice occupies, ensure the property makes financial sense.

Additionally, overlooking passive loss carryforwards is another expensive error I often see. If you don’t track losses year over year, you risk forfeiting valuable offsets that could drastically reduce your taxable income in future years. These carryovers can become a strategic advantage once you sell a property or when you generate enough passive income to absorb them. Properly documenting your losses also ensures you remain compliant with state filings.

Start early and stay proactive

Many physicians realize they’ve missed out on key deductions or are racing to comply with complicated tax rules when it’s already too late. Continuous tax planning provides you with an unmistakable bird’s-eye view of impending deadlines and allows you to align each tax strategy with your broader financial objectives.

Procrastination not only causes stress but often leads to overlooked deductions and higher tax bills. Conversely, a thoughtful, well-coordinated plan ensures you retain more of your hard-earned income and redirects those savings into patient care improvements, practice expansions or even a well-deserved break.

Maximize real estate tax benefits through strategic planning

Real estate has long been a favored investment vehicle for its growth potential and tax advantages. But many physicians aren’t fully leveraging real estate’s unique benefits. As I often remind clients, passive real estate investments offer significant tax benefits, but understanding how and when those benefits apply is crucial.

One of the most powerful tools in your arsenal is depreciation, which effectively allows you to deduct the gradual wear and tear of your property — even if it’s appreciating in value. Where possible, consider using bonus depreciation and cost segregation studies to frontload these benefits.

Cost segregation breaks out components of a property (e.g., flooring, HVAC) into shorter depreciation schedules that free up additional deductions much earlier. However, these strategies must be structured carefully to match your long-term financial plan.

Even so, remember that these depreciation benefits generally offset only passive income. In many cases, you can’t simply use passive losses to reduce your W-2 or active business income unless you’re a real estate professional or exit the passive activity completely.

As you map out your tax plan for 2025, keep these strategies top of mind. Set reminders for key filing deadlines, consult a specialized tax adviser who understands the nuances of health care practices and, above all, start now. You’ll never want to miss out on these opportunities you can further leverage.

Tal Binder is the CEO of Gelt, a modern tax company specializing in providing tailored tax solutions for high-income earners, investment-savvy individuals, and business professionals.