Questions
Answers to the tax and accounting questions that come up when you're running a business.
My practice management software shows one revenue number and my bank shows another. Which is right?
Both numbers are telling you something real, but neither gives the complete picture. Your software tracks what you charged and what's owed after adjustments. Your bank shows what actually collected. Proper bookkeeping reconciles both.
Read answerCash basis or accrual: which fits a medical business?
Cash basis is simpler and works for many small practices, but insurance reimbursement lag and prepaid packages mean medical businesses often need accrual-style visibility. Many owners start with cash-basis books while tracking receivables and package liabilities separately.
Read answerA client prepaid for a package of sessions. Is that income now?
No. Until the sessions are delivered, that money is a liability, not income. You recognize revenue as each session is completed, not when the payment arrives.
Read answerWhat does a properly built chart of accounts do for a medical business?
A properly built chart of accounts separates revenue by service line, splits direct delivery costs from overhead, and tracks prepaid package liabilities. Without this structure, your books show totals but cannot answer margin questions.
Read answerWhich monthly reports actually matter for my business?
The core set includes the profit and loss statement, balance sheet, and cash movement report. Depending on your business, you may also need receivables aging and margin by service line to see the full picture.
Read answerHow can I tell which of my services earn money and which just stay busy?
Track the direct costs that go into each service and compare them to what you charge. Many owners find that their busiest services aren't their most profitable, and without cost tracking there's no way to know which is which.
Read answerI did my own QuickBooks setup and I am afraid to look at it. What now?
DIY QuickBooks files with miscategorized transactions and unusable reports are extremely common. We assess whether to repair or rebuild, restructure the accounts for your type of medical business, reconcile everything, and hand back books you can actually trust.
Read answerWhy does my profit and loss look fine while my bank account feels empty?
Your profit and loss statement and your bank account measure different things at different times. The gap usually comes from insurance receivables not yet collected, inventory purchased but not used, loan principal payments, prepaid package cash already spent, owner draws, and taxes never set aside.
Read answerDo you take over my bills and invoicing if I want that too?
Yes. Hunter Green CPA offers accounts payable and accounts receivable as add-on services starting at $100 per month each. Bills get tracked and paid on time, invoices go out promptly, and everything is recorded in your books.
Read answerHow long do I need to keep receipts and financial records?
Keep most business financial records for seven years to cover the IRS's standard audit window and extended periods for income understatement. Payroll records need at least four years. Cloud bookkeeping with digital receipt storage makes retention automatic rather than a filing cabinet project.
Read answerMy side business made real money this year. Why is my refund gone?
Your business profit stacks on top of your W-2 clinical income and gets taxed at your highest marginal rate, plus self-employment tax. The W-2 withholding that used to produce refunds was never meant to cover this extra layer.
Read answerWhen does an S corporation election start making sense?
An S corporation election makes sense when the tax savings on distributions exceed the added costs of payroll, a separate tax return, and compliance with reasonable-compensation rules. There's no universal income threshold. It depends on your actual profit and what the overhead will cost you.
Read answerHow do quarterly estimated payments actually work?
The IRS requires self-employed individuals to pay taxes throughout the year via four quarterly payments. Missing these payments triggers penalties even if you pay the full balance in April. Safe harbor rules based on last year's tax make the amounts predictable, and clinicians with W-2 jobs can sometimes increase withholding instead.
Read answerWhat deductions do medical business owners commonly miss?
Medical business owners often miss vehicle and mileage expenses, continuing education costs, professional insurance premiums, and retirement contributions. The common thread is poor documentation throughout the year.
Read answerDoes the QBI deduction still exist, and do I qualify?
Yes, the 20 percent qualified business income deduction is now permanent. But healthcare businesses are classified as specified service trades, which means income thresholds determine whether you can claim it.
Read answerHow much can my business put into retirement for me in 2026?
For 2026, a solo 401(k) allows contributions up to $72,000 if you're under 50, $80,000 if you're 50 or older, and $83,250 for ages 60 to 63. A SEP IRA caps at $72,000 but requires much higher income to reach that level.
Read answerI bought an expensive laser or piece of equipment. How does the write-off work?
You can often deduct most or all of the equipment cost in the first year using Section 179 or bonus depreciation. This applies even if you financed the purchase with a loan.
Read answerWhat changed with 1099 rules, and what do I file this January?
The $2,000 reporting threshold applies to payments made in 2026, not 2025. This January, you still file 1099s for contractors who received $600 or more. The first filings under the new threshold happen in January 2027.
Read answerWhich of my services and products need sales tax collected?
Professional and medical services are usually exempt from sales tax, while retail products like skincare, supplements, and devices sold at the desk are typically taxable. The exact rules vary by state, especially for borderline items.
Read answerThe IRS sent me a letter. How bad is this?
Probably not as bad as you think. Most IRS letters are notices about a specific question or discrepancy, not audits. Even audit letters describe a defined process with steps and deadlines that can be managed.
Read answerCan one person handle both my business return and my personal return?
Yes, and for pass-through owners it's practically necessary. Your business return generates a K-1 that flows directly onto your personal return. Having one CPA see both sides means better coordination of salary, distributions, and deductions.
Read answerIs December too late to lower this year's taxes?
December is late but not useless. You can still make equipment purchases, establish certain retirement plans, time expenses, and correct estimated payments. January is when the door truly closes.
Read answerWhat does proactive tax strategy actually involve, beyond filing?
Proactive tax strategy shapes your tax outcome before the year ends rather than just reporting what happened. It includes entity and election analysis, salary and distribution design, retirement plan selection, purchase timing, estimate management, and multi-state exposure checks.
Read answerMy business now operates in two states. What did I just get myself into?
Operating in two states means you now have filing obligations in both. You'll likely need to register with the second state, file income tax returns there, and if you have employees or taxable sales in that state, handle payroll withholding and sales tax too.
Read answerI have a feeling my old returns left money on the table. Is it recoverable?
A prior-return review sometimes finds missed deductions, credits, or elections that can be recovered through amended returns filed within about three years of the original deadline. Beyond that window, any findings become forward-looking fixes rather than refunds.
Read answerEveryone in home care argues about 1099 versus W-2 caregivers. What is the truth right now?
Hourly caregivers whose schedules and work an agency controls generally look like employees under the classification tests that matter. The cost of misclassification is severe, including back wages, penalties, and potential personal liability for agency owners.
Read answerWhere do caregiver overtime rules stand right now?
The federal rules are in flux. The DOL has proposed reinstating the companionship exemption for agencies, but the change is not final and many states require overtime regardless. The safe approach is to budget and pay as if overtime applies.
Read answerWhat should an hour of care actually cost me to deliver?
An hour of care costs far more than the caregiver's wage. Add employer payroll taxes, workers comp, travel time, training, and unbilled gaps, and the fully loaded cost can run 30 to 50 percent above the wage itself.
Read answerThe caregiver shortage is driving my wages up. How do I protect my margins?
The caregiver shortage is structural, meaning wage pressure will persist. Financial defenses include knowing margin per client and per caregiver hour, repricing underwater cases, accounting for turnover as a real cost, and watching overtime concentration.
Read answerHow should my books handle Medicare and insurance money that arrives months late?
Your books need to track what has been earned, what has been paid, and what remains outstanding by payer. Without this structure, you end up navigating the business by bank balance between deposits.
Read answerPayroll is due Friday and the payers have not paid. How do agencies survive this gap?
The gap between payroll deadlines and payer reimbursement is manageable when you know your numbers. Track each payer's real lag time, hold a cash cushion sized to cover payroll through it, and keep the books current so the gap is a known number instead of a monthly scare.
Read answerWhat do the most financially healthy home care agencies do differently?
They classify workers correctly and run real payroll. They know margin per client and reprice or decline unprofitable ones. They price in travel and training, keep books current monthly, and set aside taxes as profit arrives.
Read answerOur revenue mixes private pay, long-term care insurance, and a Medicaid waiver program. Can your books keep that straight?
Yes. The books track each payer type separately so you can see where revenue comes from, how long it takes to collect, and what your actual margins look like by source.
Read answerWhat financial setup does a home care startup need before its first client?
Before taking your first client, a home care agency needs an entity with a deliberate tax election, separated business banking, payroll configured with defensible worker classification from hire one, and bookkeeping running from month one. Starting clean costs a fraction of cleaning up later.
Read answerDo the new overtime tax rules affect me as an employer of caregivers?
Yes, you have new reporting duties starting with 2026 W-2 forms. The law allows employees to deduct qualifying overtime pay, but employers must track and report that overtime precisely.
Read answerAging in place keeps growing. Does that actually show up in agency finances?
The demographic demand is real, but whether it shows up as profit depends on your unit economics. Agencies that track margin per client turn the tailwind into growth. Agencies that just track revenue get busier without getting ahead.
Read answerWhat does your payroll setup include for an agency with hourly caregivers?
The setup includes a fully configured payroll system, typically Gusto, with overtime handling, correct withholdings and tax filings for your state, employee records, and the reporting your books need. You also get hands-on training so you or your admin can run payroll confidently going forward.
Read answerHow big is the med spa opportunity really, and what does it mean for my finances?
Industry surveys put average med spa revenue around $1.4 million with over ten thousand locations nationwide. The opportunity is real, but so is the financial complexity that comes with injectable inventory, prepaid revenue, provider commissions, and often multi-entity structures.
Read answerWhy does my attorney say my med spa needs two entities, and what does that do to my books?
In many states, corporate practice of medicine rules require the clinical side to sit in a physician-owned entity while you own a management company. That means two real sets of books, not one.
Read answerWhat does a management fee between my entities look like in practice?
The management company invoices the clinical entity per the MSA, and actual money moves between bank accounts on schedule. Each entity records the transaction on their own books. When fees exist on paper but money never moves, tax and compliance problems grow quietly.
Read answerI inject on weekends and run the spa around my hospital shifts. What does my tax picture look like?
Your W-2 income sets your bracket, then spa profit stacks on top at that rate. You face self-employment tax, quarterly estimates, and potential QBI phaseout as a high earner in a health business. The wins come from structure and planning.
Read answerHow should injectables be handled in my books?
Injectables are inventory, not an expense at purchase. Record them as an asset when they arrive, then move cost to expense as units are used on clients. This approach shows you true cost per treatment and surfaces waste.
Read answerMy injectors want commission. How do I keep that from wrecking my margins?
Define your commission base precisely because paying on gross revenue versus net of product cost changes everything. Track provider-level margin so your most popular injectors are also your most profitable ones.
Read answerMemberships and packages bring cash in early. Where is the catch?
The catch is that prepaid cash is a liability, not income. Until you deliver the treatments, that money represents services you owe. The books must track the unredeemed balance and recognize revenue only as sessions happen.
Read answerGift cards, series discounts, GLP-1 program fees: how does all this get booked?
Gift cards, prepaid packages, and recurring program fees are all recorded as liabilities when cash is received, not as revenue. Revenue is recognized when services are actually delivered, keeping your books accurate and your margins visible.
Read answerAm I supposed to collect sales tax at my spa?
Probably yes, at least on retail products. Services like injectables are typically exempt, but skincare, supplements, and take-home products are usually taxable. The rules vary by state, and uncollected tax becomes your personal liability.
Read answerWhich treatments on my menu are actually profitable?
Profitability at the treatment level requires tracking product consumed, provider compensation, and device or room costs against each service's price. Many owners discover their marquee treatments barely break even while simpler services quietly carry the month.
Read answerI financed a $120,000 device. How does it hit my taxes and my cash?
You can likely deduct most or all of the device cost in year one even though you financed it, thanks to Section 179 and bonus depreciation. But your monthly payments continue for years regardless of that deduction, creating a mismatch between your tax bill and your cash flow.
Read answerWhat is a medical director fee and how should it be recorded?
A medical director fee is compensation paid to a supervising or sponsoring physician for clinical oversight. It should be recorded in the correct entity, match the documented agreement, and stay consistent month to month.
Read answerMy spa revenue doubled but my stress doubled too. What should the finances look like at this stage?
At doubled revenue, your books should show treatment-level margins, monthly inventory reconciliation, provider pay per provider, package liabilities, and tax reserves. If you have an MSA structure, both entities need clean books.
Read answerDo you work with weight loss and IV therapy clinics that are not traditional med spas?
Yes. Hunter Green CPA serves medical weight loss and IV therapy clinics nationwide. These businesses have specific financial challenges including deferred membership revenue and volatile medication costs that require careful bookkeeping and proactive tax planning.
Read answerWhat financial red flags should make a med spa owner stop and fix things now?
Six warning signs that are cheap to fix now and expensive to fix later: prepaid package cash spent with services untracked, inventory not counted against sales, uncollected retail sales tax, intercompany fees on paper only, no tax reserve set aside, and books falling behind during growth.
Read answerInsurance pays my therapy practice months after the session. How do books stay honest through that?
Track billed, expected (after contractual adjustments), and collected amounts as separate numbers. Age receivables by payer and reconcile your practice system to the bank monthly. This reveals which payers quietly hurt your practice through lag and denials.
Read answerWhat separates a profitable therapy practice from a busy one?
The difference is per-visit economics. A profitable practice tracks collected revenue, clinician cost, and overhead per visit by clinician and service type. A full schedule at weak rates is busyness, not profit.
Read answerWhy is ABA practice bookkeeping its own animal?
ABA practices have a financial structure unlike most other medical businesses. Hourly behavior technician payroll dominates expenses, authorization gating controls when revenue can even exist, and receivables run long while payroll goes out every week.
Read answerWe serve school districts on contract. What does that mean for our books?
School district contracts mean your books should track earned, invoiced, and paid revenue separately for each contract. The school-year rhythm creates summer cash gaps that require planning, and prompt invoicing is the biggest lever you control.
Read answerIf I add cash-pay services alongside insurance, how do I compare them fairly?
Compare the actual collected amount per visit for insurance work after adjustments, denials, and billing overhead against your cash-pay rate. The comparison requires your own practice data, not industry averages or gut feeling.
Read answerWhat is the right way to pay myself from my practice?
The right way depends on your entity structure. Default LLCs take draws against profit, while S corporations pay a reasonable salary through payroll plus distributions of remaining earnings. In both cases, what you pay yourself should be grounded in what the books show the practice actually earns.
Read answerHow do I know if my practice can support a second clinician?
You need three things to line up: proven demand beyond your current capacity, projected revenue from the new hire that comfortably exceeds their fully loaded cost, and enough cash to carry them through the ramp-up months before their schedule fills.
Read answerI am a mobile therapist working out of my car. Do I even need real bookkeeping?
Yes, but scaled to your operation. Simple books that capture per-visit revenue, mileage documented the way the IRS requires, and quarterly estimates handled. Small operations lose the most to missed vehicle deductions and April surprises.
Read answerWhat financial habits should I build in my first year of business?
The habits you build early cost almost nothing to maintain and make everything easier later. Separate banking, monthly bookkeeping, tax reserves, and clean digital records form the foundation.
Read answerHow do I financially evaluate opening a second location?
Start with clean books at your first location to know the real margins. Then map buildout costs, ramp-up cash needs, staffing, licensing, and any multi-state tax consequences. The first location's actual performance is the business case.
Read answerWhat will a buyer want to see if I sell my business someday?
Buyers want multiple years of clean books, documented and transferable revenue, margins that hold up under analysis, worker classification that survives review, and known liabilities. The uncomfortable truth is that sellable financials are built years before the sale, one clean month at a time.
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