For licensed acupuncturists and small TCM clinics

$115K in clinic revenue. $34K to the IRS. Not anymore.

Treatment tables, moxa, e-stim units, herb pharmacy inventory, multi-state license fees. We classify every line so your QBI deduction, §179, and S-Corp comp all land in the same year.

What acupuncturists get wrong (and what we fix)

Acupuncture is health under §199A: a Specified Service Trade or Business. You miss equipment timing, herb inventory accounting, and the right entity. We don't.

§179 on tables, e-stim, lasers, moxa

Pivotal treatment tables, TDP lamps, electroacupuncture units (ITO, Pantheon), cold laser, cupping sets, NCCAOM CE software. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on overflow. We time the purchase so the deduction hits your highest-income year.

IRC §179(d); §168(k)

Herb pharmacy inventory + COGS

Granules, raw herbs, patent formulas, capsules sold or dispensed to patients are inventory. COGS deduction reduces gross income, not Schedule A. We use a simplified perpetual or periodic method depending on volume, with year-end count. Expired herbs become a §165 loss.

IRC §471; Treas. Reg. §1.471-1; §165(a)

Multi-state license + NCCAOM

NCCAOM PDA renewal, state board fees in CA / FL / NY / TX, continuing education (Healthy Seminars, Pro D Seminars). Fully deductible. If you treat patients across state lines, we coordinate which states need a non-resident filing.

IRC §162(a); Treas. Reg. §1.162-5

S-Corp election above $80K net

Once your clinic nets $80K+, S-Corp election typically beats Schedule C. We benchmark reasonable comp from BLS acupuncturist + naturopathic data plus your state, then route the rest as distribution free of self-employment tax. Saves $3K-$8K/yr.

IRC §1402(a); Rev. Rul. 59-221

Sharps, sterilization, PPE

Seirin / DBC needles, sharps disposal contracts (Stericycle), autoclave, alcohol prep, gloves, table paper, masks. Ordinary & necessary supplies deductible per §162. We catch the wholesale needle orders (Lhasa OMS, Galaxy) that often get miscategorized.

IRC §162(a); §263A small-taxpayer exemption

Malpractice + business insurance

AAC malpractice, NCCAOM Foundation, general liability, cyber for EHR/Jane App, business interruption. Fully deductible. Owner disability is NOT deductible (benefits stay tax-free). We structure so a claim doesn't become taxable.

IRC §162(a); §104(a)(3)

Real client example

Solo licensed acupuncturist, 5 years in practice, $115K net 2024 with growing herb pharmacy. We S-Corp elected, §179'd a new TDP lamp + Pantheon e-stim, cleaned up herb COGS, and tightened the home office.

$8,000 saved

Federal + FICA savings on the S-Corp comp split, §179 acceleration, and proper herb COGS treatment. State savings on top.

Free entity review → Talk to our office
Call 689-331-5723 · info@zerofusstaxes.com · Real humans pick up.
Disclaimer. General tax information, not advice for your specific situation. Code section references accurate as of the 2024 tax year and may change. §199A SSTB phase-outs, S-Corp comp, inventory method elections, and multi-state filings all require facts-and-circumstances analysis. Savings examples are illustrative and based on actual client outcomes; your results depend on entity, state, income, and documentation. We are not your tax advisor until we sign an engagement letter.