Tax Planning for Private Practice Owners: 3 Lessons From the PPO Club Conference

This article was written by Pamela Johnson, Channel Partnerships Manager at Gelt. It is general education for practice owners, not tax advice, and reflects the 2026 tax year.

Tax planning for private practice owners came up in almost every conversation I had during three days in San Antonio at the Private Practice Owners Club Conference on High Performing Practices. I went in expecting sessions on patient volume and marketing. Most of what I heard from physical therapy, occupational therapy, and speech therapy owners was about the financials behind the practice: profit margin, payer mix, and knowing their numbers early enough in the year to do something about them.

Here are my key takeaways.

1. Increase reimbursement per visit and minimize costs

The owners in the room who were actually profitable talked less about growth and more about two things: what it costs to see a patient and what they collect for seeing them.

Collect what you can at the time of service, which means co-pays, coinsurance, and estimated deductibles. Most small practices are on a cash basis, so you are taxed on what you collect and when you collect it. That means the timing of what you collect also impacts your tax situation.

Code appropriately for the work you actually did, which means knowing each payer's billing rules. Undercoding was described as a major problem, and the reason it persists is that nothing about it looks broken. The visits happen, the claims go out, they get paid, and the margin just never improves. You did the work, and you are leaving the difference on the table every single visit.

On costs, the room talked mostly about AI and virtual assistants for intake. Less about cutting staff, more about removing work nobody needed to do. Software and equipment are deductible, and the year you buy decides the year you deduct, so timing those purchases is worth a conversation before December.

2. Analyze your payer mix before it sets your margin

A lot of the conversation was about payer contracts. The advice was to look at which payers reimburse the least per visit, and then at which of those also create the most administrative work to get paid. Those contracts cost a therapy practice twice, once on the low rate and again on the staff time it takes to collect.

From there, practice owners should renegotiate the contracts they can and leave the networks they cannot. Renegotiating means going back to the payer's provider relations representative and asking them to reopen the fee schedule. Most owners have more of a case than they think, especially if they are one of the few in-network physical therapy providers in their area or can show they are keeping that payer's members out of imaging and surgery. Traditional Medicare and Medicaid are not negotiable because those rates are set, but commercial plans, Medicare Advantage, and Medicaid managed care all are.

On the tax side, improving your payer mix raises your profit, and your tax bill goes up with it, usually in the same year. If your quarterly estimates are based on last year's numbers, you will underpay. A jump in profit is also a reasonable time to look at whether your entity structure and your owner compensation still make sense.

3. Know your profit margin and profit per visit

The framework people kept coming back to was two numbers: profit margin and profit per visit. Profit margin is what you keep as a percentage of what you bring in. Profit per visit is what you are reimbursed for a visit minus what it costs you to deliver it.

Most owners in the room knew their revenue. Fewer knew their profit margin, and very few could say what they make on a visit. A practice can be busy and still not be making money. Volume hides that, which is why profit per visit is the number worth watching.

The recommendation was to review both with your CPA and bookkeeper on a regular schedule instead of once a year. Looking at the numbers monthly or at least quarterly also lets you adjust your estimated tax payments during the year, so you are not covering a shortfall in April. If your CPA only surfaces at filing time, these five signs your CPA has checked out for the year are worth a read.

Timing is the reason this matters for taxes. If you find out in March what your profit was last year, that year is already closed, and most of your options are closed with it. Changing your entity structure, setting owner compensation, putting a retirement plan in place, or timing an equipment purchase all have to happen during the year they apply to. We walk through several of those moves in four high-impact tax strategies for practice owners, and most of them apply just as well to a therapy practice.

Common questions from practice owners

Why did I owe so much more in taxes after a good year?

Because your estimated payments were most likely based on the prior year. When profit jumps, the tax follows it in the same year, and quarterly payments calculated off older numbers leave a gap that shows up at filing. This is the most common surprise we see with practice owners who just had a strong year.

How do I calculate profit per visit?

Take your average reimbursement per visit and subtract your cost per visit. Most practice owners know their revenue but have never run this number.

When should I meet with my CPA?

Multiple times a year, and ideally before any decision that changes your income. Hiring, buying equipment, opening a second location, or dropping a payer all have tax consequences that are easier to plan for than to clean up. A once-a-year meeting at filing is a report on decisions you have already made.

When is the right time to transition to an S corp?

Usually when your profit is consistently high enough that paying yourself a reasonable salary still leaves a meaningful distribution. The election also brings payroll, a separate return, and more administrative work, so the math is worth running for your specific practice before you elect rather than after. Timing matters as well, since the election generally has to be in place for the tax year you want it to apply to. A CPA can run those numbers with you, so scheduling a complimentary consultation with us can help you gain better clarity.

Know your numbers

The advice I heard most at this conference was to meet with your bookkeeper and your CPA on a regular schedule so you can stay on top of your financials. Knowing your numbers is key to running a high performance practice.

If you want to go through what any of this means for your physical therapy, occupational therapy, or speech therapy practice, Gelt is offering Private Practice Owners Club members a free tax consultation, along with a special offer for members who decide to work with us. Schedule your PPO Club member consultation here.