What are the best tax strategies for North Carolina law firms in 2025?

North Carolina law firms can reduce taxes by optimizing their entity structure (S corp or partnership), tracking partner draws properly, contributing to Solo 401(k)s or defined benefit plans, treating client costs correctly, leveraging NC-specific deductions, and maintaining audit-ready books. Polaris Tax & Accounting provides tailored strategies for law firms across Charlotte, Lake Norman, and Asheville.

Medical professionals in North Carolina face a unique set of tax challenges: high income, complex overhead, liability exposure, and strict compliance requirements. Whether you’re a solo practitioner in Asheville, running a multi-specialty clinic in Charlotte, or managing a group practice near Lake Norman, your tax plan needs to do more than just file on time.

At Polaris Tax & Accounting, we help physicians, dentists, and private healthcare owners across NC implement tax strategies that protect profits, reduce audit risk, and provide long-term financial clarity. Here’s what you need to know for 2025.

1. Choose the Right Entity Structure

Most medical practices operate as either:

  • S Corporations (for salary + distribution strategy)
  • Partnerships/LLCs (especially for multi-owner practices)

Choosing the right structure affects your:

  • Self-employment tax exposure
  • Retirement contributions
  • Audit risk

Pro Tip: The IRS is targeting unreasonable salaries for S Corp owners. If you’re taking too little W-2 pay, you could trigger a payroll audit.

2. Maximize Retirement Contributions

Medical professionals often exceed standard contribution limits. Use:

  • Solo 401(k) (if you’re the sole owner)
  • Safe harbor 401(k) with profit sharing (for groups)
  • Defined benefit plans (ideal for high-income specialists 50+)

Done right, these can defer $69,000+ per year in taxable income.

3. Leverage Accelerated Depreciation for Equipment

If you’ve invested in:

  • Imaging machines
  • Exam room upgrades
  • Lab equipment

You may qualify for full Section 179 expensing or bonus depreciation.

Work with a tax team that tracks these assets and plans purchases before year-end.

4. Implement an Accountable Plan for Reimbursements

If you’re paying out-of-pocket for:

  • CME travel
  • Licensing fees
  • Malpractice insurance

Reimburse these through a formal accountable plan and deduct them through the practice.

This strategy lowers practice income and avoids phantom income.

5. Separate Real Estate Ownership (If Applicable)

Many practices own their office building. Smart move. But keep the real estate in a separate LLC and charge your practice rent.

Benefits:

  • Deductible lease payments
  • Asset protection
  • Long-term real estate appreciation

We structure these setups to avoid audit red flags.

6. Stay Ahead of North Carolina-Specific Tax Changes

  • NC Income Tax Reduction: Top personal rate is now 4.25% (headed to 3.99%).
  • Corporate Tax Phase-Out: Dropping from 2.25% to 0% by 2030.
  • Disaster Relief Extensions: If impacted by Hurricane Helene, you may qualify for postponed deadlines.

See the full guide to NC tax law changes

7. What We See Go Wrong (That You Can Avoid)

  • Missing estimated tax payments
  • Using personal cards for business expenses
  • Overpaying payroll tax due to poor S Corp structuring
  • Failing to track equipment basis for depreciation

If any of that sounds familiar, it’s time to review your plan.

📅 Schedule a confidential consultation

Final Word: A Practice Without a Tax Strategy Is Leaving Money Behind

You focus on patient care. We focus on protecting what you earn.

With the right structure, reimbursements, and retirement plan, medical professionals in North Carolina can reduce their tax burden without increasing audit risk.

📄 Explore our proactive tax planning services (applicable even if you’re not in Florida).

Let’s build your 2025 strategy with precision—so you can keep your practice profitable and predictable.