If you’ve ever been hit with a big, unexpected tax bill, you know how stressful it can be. The good news? You can avoid it with the right strategies in place. As a chiropractic business owner, understanding how to plan for taxes is essential. Let’s dive into the steps you need to take to stay ahead of the game.

Understanding Your Taxable Income

Your taxable income is based on your net profit—the amount left over after you subtract business expenses from your total revenue. Chiropractors who are LLCs or S-Corporations are “pass-through entities,” meaning they are personally responsible for paying taxes on their business profits.

💡 Key Takeaway: You’re responsible for setting aside money for taxes throughout the year!

How Much Should You Save for Taxes?

To avoid a surprise tax bill, set aside:

• 30% of net profit if you’re an LLC
• 25% of net profit if you’re an S-Corp (since S-Corps have lower self-employment taxes)

If you’re unsure which business entity is best for tax purposes, consult a tax professional before making any changes.

Avoiding Penalties: Make Estimated Tax Payments

The IRS requires self-employed business owners to make quarterly estimated tax payments throughout the year. If you don’t, you could face penalties and interest.

💡 Tip: Put a reminder on your calendar a week prior to these estimated tax deadlines:
✅ April 15
✅ June 15
✅ September 15
✅ January 15 (of the following year)

Action Steps to Avoid Tax Surprises

1️⃣ Track your Profit & Loss (P&L) Statement monthly so you always know your net profit.
2️⃣ Save for taxes in a separate account so you’re not tempted to spend it.
3️⃣ Make estimated tax payments on time to avoid unnecessary penalties.
4️⃣ Schedule a mid-year tax planning session with your tax professional to ensure you’re on track.

No more tax-time stress! By planning ahead, you can eliminate the anxiety of tax season and focus on growing your practice.

Want more financial tips for your chiropractic business? Subscribe to my podcast, Financially Adjusted!