For independent optometry practices

$400K of practice income. $140K to the IRS. Not anymore.

You run exams and an optical. You don't run depreciation schedules. We expense the OCT and the lane in year one, defend the QBI deduction against the health-field phase-out, and value the frame and lens inventory so it stops distorting your profit.

What optometry owners get wrong (and what we fix)

Optometry is two businesses under one roof, a professional exam practice and a retail optical. Health is a Specified Service Trade or Business under §199A, so above the income threshold the 20% QBI deduction phases out. Add equipment that should be expensed and an inventory most owners never value correctly, and the misses add up fast.

§179 on exam and diagnostic equipment

OCT, visual field analyzers, autorefractors, phoropters, fundus cameras, the exam lane itself, edging and finishing equipment, and practice management and EHR software. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on the overflow. Off-the-shelf software qualifies. We time purchases to your highest-income year.

IRC §179(d); §168(k); §179(d)(1)(A)(ii) software

§199A QBI and the health SSTB phase-out

Optometry is a health field, which makes it a Specified Service Trade or Business. Above $383,900 MFJ for 2024 the 20% QBI deduction starts phasing out and is gone by $483,900. We use retirement contributions, an accountable plan, and entity structuring to keep taxable income inside the band so the deduction survives.

IRC §199A(d)(2)(A); Treas. Reg. §1.199A-5(b)(2)(ii)

Frame and lens inventory

The optical carries real inventory, and you generally cannot deduct frames and lenses until they are sold. Get the inventory method and year-end count right and your profit stops swinging for the wrong reasons. Small-business taxpayers may use simplified methods. We pick the method that fits and apply it consistently.

IRC §471; §263A small-business exception; §1.471-1

Practice entity choice

S-Corp, sole proprietor, or a professional entity each change self-employment tax, the QBI math, and how you bring on an associate. We model the after-tax result for your numbers and set reasonable owner compensation so the salary holds up while the rest flows out efficiently.

IRC §1361; §1402(a); Rev. Rul. 59-221

Retirement plan stacking

A high-income optometrist can shelter $50K to $200K per year in a cash balance plan stacked on a 401(k) with profit sharing. The contributions are deductible, the growth is tax-deferred, and the lower taxable income can pull you back under the QBI threshold. We coordinate the actuary and keep the plan compliant.

IRC §401(a), §404(o), §415(b); ERISA §302

Build-out and leasehold improvements

Built the exam lanes, the dispensary, the lab, and the frame displays? Qualified Improvement Property is 15-year property and 60% bonus eligible for 2024. We segregate the construction invoice so the bonus-eligible portion is expensed now instead of stretched over 39 years.

IRC §168(e)(6), §168(k); CARES Act §2307

Real client example

Single-location optometry practice, S-Corp, $415K net for 2024 with a busy optical. We expensed a new OCT and edger under §179, corrected the inventory valuation, and stacked a cash balance plan to pull taxable income back toward the QBI band.

$38,000 saved

Federal tax savings from first-year depreciation, recovered QBI, and the retirement shelter at marginal rate. State savings on top. Correcting the inventory also stopped the profit from swinging year to year.

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Disclaimer. This page is general tax information, not advice for your specific situation. Code section references are accurate as of the 2024 tax year and may change. The §199A SSTB phase-out for health fields, §179 and bonus timing, inventory method, entity choice, and cash balance design all require facts-and-circumstances analysis. Cash balance plan design requires an actuary; we coordinate but do not act as the actuary. Savings examples are illustrative and based on actual client outcomes but your results will depend on entity structure, income level, state of residence, and documentation quality. Zero Fuss Taxes is the operating brand. We are not your tax advisor until we sign an engagement letter.