If you’re a physician in Miami, the way your practice is structured solo or group changes almost everything about your tax strategy. Entity choice, retirement plan options, compensation structuring, and even how you handle equipment purchases all play out differently depending on whether you’re the only provider signing the checks or one of several partners splitting profits.
At Zenith Tax & Accounting LLC, we work with physicians across Miami who are trying to figure out exactly this: is my current structure still working for me, and what am I leaving on the table?
Solo Medical Practices: Simplicity with Limits
Most solo physicians in Miami start as a single-member LLC or a straightforward S-corp. The appeal is obvious: fewer moving parts, full control over decisions, and a tax setup that’s easy to understand.
Where Solo Practices Tend to Win
- S-corp election timing. Once net income comfortably supports a reasonable salary plus distributions, electing S-corp status can meaningfully reduce self-employment tax exposure. The key word is timing—elect too early and payroll costs outweigh the savings; elect too late and you’ve overpaid self-employment tax for years.
- Solo 401(k) plans. Without partners to coordinate with, a solo physician can often contribute far more aggressively to a Solo 401(k) or a combined Solo 401(k) plus cash balance plan, sheltering significant income each year.
- Section 179 and bonus depreciation on equipment. Imaging equipment, exam room upgrades, and practice technology purchased for a solo practice are fully within one owner’s control to time for maximum deduction in a given tax year.
Where Solo Practices Tend to Struggle
- Retirement plan administration costs are spread across one person instead of several, making cash balance plans and defined benefit plans relatively more expensive per dollar sheltered.
- Overhead—malpractice insurance, EHR systems, staff isn’t shared, so margins are tighter and there’s less room for error in quarterly estimated tax planning.
- Succession and continuity planning (what happens to the practice’s tax position if the physician is out for an extended period) is harder to build around a single provider.
Group Practices: More Complexity, More Levers
Group practices—even a two-physician partnership—open up planning options that simply don’t exist for a solo provider, but they also introduce coordination requirements that can create real problems if ignored.
Where Group Practices Tend to Win
- Partner compensation structuring. Guaranteed payments versus profit distributions versus W-2 wages (in a group PC structure) each carry different tax treatment. Getting this mix right across multiple partners compensation structuring is one of the highest-value planning exercises a group practice can do.
- Cash balance and defined benefit plans become more efficient. Spreading actuarial and administration costs across several partners often makes these high-contribution retirement vehicles worthwhile in a way they aren’t for a solo provider.
- Cost segregation on owned real estate. If the group owns its building, a cost segregation study can accelerate depreciation across a shared asset, benefiting all partners simultaneously.
- Ancillary revenue and entity layering. Groups running imaging, labs, or physical therapy alongside core services often benefit from separate entities for those lines, each with its own tax treatment.
Where Group Practices Tend to Struggle
- Partner-level K-1 planning gets complicated fast—one partner’s tax situation (real estate losses, a spouse’s income, a Section 199A phase-out) can affect the group’s overall compensation strategy.
- Buy-in and buy-out structuring for new or departing partners has tax consequences that are easy to get wrong without a CPA involved from the start.
- The Section 199A Qualified Business Income (QBI) deduction phases out at higher income levels for specified service trades or businesses, which includes most medical practices, and this hits group practices with higher aggregate income differently than it hits solo providers.
The Miami-Specific Factor
Miami physicians benefit from Florida’s lack of a state income tax compared to peers in states like New York or California, but that doesn’t eliminate the need for planning—it just shifts the focus entirely to federal strategy: entity structure, retirement plan design, Section 199A optimization, and depreciation timing.
Miami’s higher cost of practice ownership (real estate, staffing, malpractice premiums) also means the stakes on getting entity structure and deduction timing right are higher than in lower-cost markets.
Which Structure Is Right for You?
There’s no universal answer—it depends on income level, number of providers, whether real estate is owned or leased, and long-term succession plans.
A solo practice generating consistent six-figure income may benefit enormously from an S-corp election and an aggressive Solo 401(k) strategy. A three-partner group approaching a real estate purchase may get far more value from a cost segregation study and a cash balance plan than either partner would get planning independently.
The right move is usually a year-round conversation, not a once-a-year tax return conversation.
Ready to Build a Tax Strategy That Fits Your Practice?
Whether you’re a solo physician deciding if an S-corp election makes sense or a group practice trying to structure partner compensation the right way, Zenith Tax & Accounting works with medical practices across Miami to build tax strategies around how your practice actually operates—not a one-size-fits-all template.
Schedule a consultation with Zenith Tax & Accounting today and let’s find out exactly where your practice’s tax strategy stands—and where it could be working harder for you.
Frequently Asked Questions
Is an S-corp always the right structure for a solo physician?
Not always. It depends on net income after reasonable compensation. Below a certain income threshold, the added payroll administration and reasonable salary requirements can offset the self-employment tax savings. A CPA can model this specific to your numbers.
Can a group practice still use a Solo 401(k)?
No — a Solo 401(k) is designed for owner-only businesses with no full-time employees other than a spouse. Group practices with employees typically use a standard 401(k), often paired with a cash balance plan for higher contribution limits.
Does the Section 199A deduction apply to physicians in Miami
It can, but medical practices are classified as specified service trades or businesses, meaning the deduction phases out above certain income thresholds regardless of state. Planning around this phase-out is one of the most valuable things a CPA can do for a profitable practice.
Should a group practice consider cost segregation if it owns its building?
Yes, in most cases. Cost segregation studies accelerate depreciation on components of the building (electrical, fixtures, certain finishes) that would otherwise depreciate over 39 years, creating significant upfront deductions.
How often should a medical practice revisit its tax structure?
At minimum, annually — but any major change (a new partner joining, a real estate purchase, a significant jump in income) should trigger a review rather than waiting for the next tax season.
