You sell drugs, food, surgery, and house calls. The IRS treats every piece differently. We split the pharmacy out of services, expense the truck, and keep the retail Schedule C from blowing up the QBI deduction.
Vet practice is part professional services, part retail pharmacy, part mobile business. Most preparers lump it all together. That costs you on cost of goods sold, on QBI, and on vehicle deductions.
Heartworm, flea, vaccines, anesthesia, injectables, prescription diet food. These belong in cost of goods sold with an opening and closing inventory, not buried in supplies. Done right it cleans up gross margin and supports better tax planning and a higher valuation at sale.
IRC §263A; Treas. Reg. §1.471-1; §162(a)Mobile clinic build-out, F-350 or Sprinter, gooseneck trailer, equine ambulatory rig. §179 plus bonus depreciation on the vehicle (the GVWR over 6,000 lb dodges the luxury auto cap) plus fuel, insurance, and maintenance. We log it by mile and keep the contemporaneous record that survives audit.
IRC §179(b)(5); §280F(d)(5); Notice 2024-13Ultrasound, digital X-ray, in-house lab analyzers, surgical lasers, dental units. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on the overflow. EquineCT for an ambulatory equine practice qualifies too. We time the buy against year-end income.
IRC §179; §168(k); Rev. Proc. 2023-34Sell flea collars, leashes, food, supplements at the front counter? That retail piece is NOT an SSTB under §199A and can preserve the 20% QBI deduction on the product margin even when your high income would phase out the medical side. We separate it on the books so the math works.
IRC §199A(d); Treas. Reg. §1.199A-5(b)(2)(ii)Equine reproduction, orthopedic surgery, exotic referral. You cross state lines. Each state may want a return on the income earned there. We get the state licenses tracked against the days worked and file the part-year or non-resident return so the home state credit lines up.
State income tax nexus statutes; credit for taxes paid to other statesUSDA-accredited vets writing health certificates, doing brand inspections, or handling regulated species have specific expense categories (license fees, CE, accreditation training) that are fully deductible §162 ordinary business expenses. We capture them so they don't get missed as personal CE.
IRC §162(a); §274(d); 9 CFR Part 161Equine ambulatory vet, sole proprietor, $295K gross income 2024. New F-350 ambulatory rig with fiberglass vet box, plus a gooseneck trailer for hauling portable stocks and a digital X-ray.
$58,000 written offCombined §179 plus bonus depreciation on the truck, vet box build-out, and trailer in year one. Approximately $19,000 in federal tax saved at marginal rate, plus state and SE tax savings.