Learn how therapy practices can leverage tax deductions, revenue-cycle improvements, and automation to defend their margins in 2025.
Staying profitable in 2025 requires proactive steps. It isn’t the year to sit back. Here are five strategies for outpatient clinics and therapy practices to adapt to the new tax environment and protect margins:
Make sure you take full advantage of the 2025 tax provisions. Plan major purchases of clinic equipment or software now that 100% bonus depreciation is in effect. Then, apply the higher Section 179 limits by expensing eligible assets (computers, therapy devices, office renovations, etc.) upfront. These deductions reduce your taxable income and free up cash.
Let's say a clinic purchases MRI scanner with a total cost of $1 million by December 31, 2025, which is a tangible medical equipment eligible for bonus depreciation, under the new tax rules, at a rate of 40%. You can write off $400,000 immediately in 2025.
The remaining $600,000 can qualify for Section 179 expensing, up to a limit of $1.25 million in 2025. You deduct the full $600,000 in year one. The result: total immediate write-off! $1 million deduction in 2025, which dramatically reduces taxable income and saves significant cash flow.
Review your practice’s legal and tax structure with an accountant. A small tweak tailoring your tax planning to the new rules can mean thousands saved.
For pass-through entities, monitor your Qualified Business Income (QBI) deduction eligibility. If your taxable income is near the Specified Service Trade or Business (SSTB) phase-out threshold, consider strategies such as increasing retirement plan contributions to stay under the limit.
With possible increases in uninsured patients on the horizon, bolster how you manage revenue collection.
Evaluate your billing processes to minimize denied claims and speed up payments, You might need to train staff on insurance changes or use software that flags issues.
Also, reach out to patients about coverage changes. You can consider offering membership plans, sliding scale fees, or assisting them with finding new insurance options to maintain treatment and revenue.
Embracing technology can be a double win for margins! It may help for tax benefits and reduce operating expenses.
Identify administrative tasks that can be streamlined through automation or AI-driven tools. An automated scheduling and billing system can replace manual work, reducing labor costs and minimizing human errors.
The tax code now fully supports these tech investments. If you buy new practice management software or AI-driven diagnostic tools, you can write off the cost immediately.
Staying informed isn’t optional anymore, it’s a matter of survival. Being aware of policy shifts will allow you to redefine your business strategy preemptively rather than reacting after the fact.
Follow finance news and consider adding your voice through professional associations. The American Psychological Association (APA) encourages practitioners to speak up about policy impacts, noting that sharing on-the-ground stories can influence policymakers.
To learn more about 2025 Tax reform and who gets more impacted, visit the ABC of 2025 Tax Bill for Healthcare Providers
With 2025 tax reforms, automation isn’t a luxury anymore. It’s a necessity. Solum Health offers more than advice, it provides resources and AI-powered automation that tackles patient intake, appointment booking, eligibility checks, and prior authorizations. Let's strengthen your financial position together.
For years, I managed a mental health practice with over 80 providers and more than 20,000 patients. Now, I’m building the tool I wish I had back then, AI automation that makes intake, insurance verification, and scheduling as seamless as running a healthcare practice should be.
