Why Practitioners Overpay Taxes Even With A CPA

“Your accountant or your CPA becomes a little bit of a historian for you.”

– Tommy Thornburgh, President of Prime Corporate Services

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This was me for years. I had a CPA, so I figured taxes were handled. I personally overpaid, drastically, because this stuff felt intimidating and it was easier to stick my head in the sand.

Tommy named the gap in one sentence. There is a big difference between tax filing and tax strategy.

Think about how most practitioners do it. You gather your documents in February (or in September, if you filed an extension). You upload everything. Your CPA enters what already happened and tells you the refund or the bill.

That is history. Nobody can change history.

Strategy happens while the year is still open. That is the whole difference, and it is where the overpaying lives.

Tommy tells everyone the same thing. Break your year into calendar quarters. January to March is quarter one. October to December is quarter four.

Walk into that fourth quarter knowing your profit and loss, and you have a decent idea of your tax liability. Now you hold the power. You know how much money to deploy and what it means to your bottom line.

His words: you can either invest in your business, or good old Uncle Sam is going to take his share because the strategy was not there.

What does deploying look like? It depends on your goals and your income. Tommy listed what his clients are doing right now:

• Upgrading equipment (the computer that keeps fritzing out, the camera gear for your videos)
• Funding marketing campaigns
• Putting money into a retirement account
• Buying a vehicle or real estate
• Making charitable donations

I used to buy equipment when it broke. I bit the bullet and paid for it, with zero strategy. Now we look quarter over quarter and decide on purpose.

Prime also has a tool called the Decoder. You upload last year’s return and AI pulls out every box. It returns five to 20 strategies you could be using and are not. Knowledge is power, and it puts the choice back in your hands.

Tommy went looking for a magic wand. Prime filed about 30,000 tax returns last year. He had his accountants pull the data on why some people save more on taxes than others.

There was no loophole. The people who tracked and organized their expenses throughout the year saved an average of $9,200 more than they did the year before.

That is the average. (Prime’s own number across their clients. Yours will differ.)

So TRACK YOUR EXPENSES. Pick one way and start:

1. Hire a bookkeeper
2. Use QuickBooks
3. Use an AI bookkeeping tool that connects to your cards and bank accounts

Tommy added something I love. Keep revenue in first position. Keep making money. A tax bill is a good problem to have. It only feels like the worst thing in the world because nobody planned for it.

Once you start tracking, it becomes a game. I found it bleeding into our personal finances too. Last year I learned how many of our family’s health expenses could be reimbursed from our health savings account. Things our chiropractor asked us to do at home counted!

This is the part I care about most, because it is exactly what my clients are doing. You are taking your protocol online. A book. A group program. Coaching. A private label supplement.

Here is the problem. Most practitioners run all of it under one entity.

Your patients live in your EHR and are handled one very particular way. The moment your expertise moves online, you are talking to prospects. Now you are under the purview of the FTC, the Federal Trade Commission. That is a completely different set of rules.

I interviewed a lot of attorneys while writing my first book, Get Cash-Pay Clients. They all landed in the same place. Those two worlds need to be different worlds.

If anything goes wrong in your clinic, you do not want it taking down your online business. If anything goes wrong online, you do not want it taking down your clinic.

Tommy put it this way. We have all heard not to put all your eggs in one basket. Nobody tells you which eggs go in which basket.

He gives every practitioner three checks before starting a new revenue stream or entity:

1. Privacy and protection. Are you okay with your name and address on the state website? How much protection does your revenue and business type need? According to Consumer Shield, 68 and a half million lawsuits were filed last year. That is about 125 to 130 a minute.
2. How it is taxed. Clinic hours are active income, and active income is taxed at the highest rates. Subscriptions, book sales and programs can be structured differently.
3. Credibility. With your clients, and with banks and lenders if you ever want business funding.

Then give each business its own lane with its own profit and loss. Your building, if you own it. Your practice. Your book and supplement sales.

His rule for setting it up: plan for when you get sued, not if. As depressing as that sounds, you will be grateful you did.

Tommy shared a line one of their CPAs gave him about seven years ago. It stuck with me too.

Pay yourself up and out. Money from your practice goes up to the LLC and out to you.

Lend money over and down. When the practice funds your new online business, the money goes over to that entity and down to the project.

Here is why this matters in year one. Time for money has a ceiling. You only have so many hours, and if you do not come home from the clinic early enough, your kids forget your name. So you start building leveraged income.

That new entity usually runs at a loss at the beginning. You are building the funnel, buying the CRM, paying for consulting. Those investments can help balance out what the clinic earned. At the end of the year, LLCs and S corps can flow through to one return that keeps more money in your corner.

Leveraged income is worth the setup. My book alone brings in $56,000 above what I pay in ad spend. It brings in $110,000 a month in new clients and acquisitions for my business. That is the kind of PROFITS that needs the right structure underneath it.

You do not have to do it all at once. I took it one step at a time. Here is your list:

1. Pull your profit and loss for the year so far. If you cannot, that is problem number one.
2. Pick your expense tracking tool and connect every card and account.
3. Write down where you want the money to go instead of the IRS. A cause, a hire, a launch, equipment, retirement, your HSA.
4. If your coaching, programs or book live inside your clinic entity, get a professional opinion before the year closes.
5. Book the FREE call with Prime.

Prime offers our community a FREE 45 minute to one hour consultation on your business structure and tax plan. No prep on your end. They ask the right questions. While you are on the call, ask which of your Heal At Scale investments belong on this year’s return.

I used to be afraid that a new initiative would hit it out of the park. I did not know how I would handle it from a tax strategy.

I do not think about that anymore at all.

When my book launched, it ramped our profits up fast. Before Prime, that would have scared me. Now we meet quarter over quarter. We celebrate wins. We decide whether to reinvest in the business or make a big donation to something that matters to my heart.

That is what this is for. It is about living in alignment with your values, with money you already earned.

Do not wait until April 15 to find out what this year cost you. BOOK YOUR FREE CONSULT WITH PRIME while the year is still open.

Here’s to you keeping more of what you worked so hard to earn.

 

Want to know exactly what to focus on next in your business?

Disclaimer: This article is education, not tax or legal advice. Prime’s $9,200 figure is their own average across about 30,000 returns. The lawsuit statistic is from Consumer Shield, as cited by Tommy Thornburgh. HSA limits are Tommy’s figures for this tax year. Talk to your own tax professional about your own numbers.