Strategic Tax Deductions for Optometrists

You’ve built a thriving optometry practice, invested in cutting-edge diagnostic equipment, and spent years earning your patients’ trust. But every year, many optometrists still leave thousands of dollars on the table at tax time.

Why? Because most generic small business advice doesn’t speak to the realities of running an eye care practice. From equipment depreciation to healthcare-specific deductions and fringe benefits, optometrists have unique opportunities that often get overlooked.

The good news: with the right planning, established practices can often save between $15,000 and $50,000 per year — just by claiming deductions they're already entitled to.

Here’s how to make sure you’re not missing out.

How to Maximize Equipment Write-Offs in 2025

Let’s start with one of the biggest tax-saving opportunities for optometrists: equipment purchases.

If you bought a $75,000 OCT scanner, you don’t need to depreciate it over five years. Thanks to the One Big Beautiful Bill Act, passed in July 2025, both Section 179 and bonus depreciation have been permanently enhanced — and the changes apply to equipment placed in service after January 19, 2025.

That means optometry practices can now deduct up to $2.5 million in qualifying equipment immediately. And if your total purchases exceed that, you can still claim 100% bonus depreciation — now also permanent — on both new and used qualifying equipment.

Real Example: Dr. Sarah Chen runs a growing practice in Austin, generating $850,000 in revenue last year. In October 2025, she purchased a $35,000 digital retinal camera. Rather than depreciate it over five years, she deducted the entire $35,000 in 2025 using Section 179 or bonus depreciation, thanks to the newly enhanced limits.

That move could save her approximately $12,250 in federal taxes (assuming a 35% bracket) — money she can reinvest in a new staff hire and upgraded intake software.

What Qualifies: You can deduct most equipment used more than 50% for business, including:

• Diagnostic tools like OCTs, visual field analyzers, fundus cameras

• Exam chairs, phoropters, and lanes

• Office tech: computers, tablets, EHR and practice management software

• Furniture and fixtures in exam and waiting rooms

Timing Matters: To claim the deduction for 2025, the equipment must be purchased and placed in service by December 31, 2025. That means it must be delivered, installed, and ready to use — not just ordered. With ongoing supply chain delays, ordering early is a smart move.

Your Next Step: Dust off that equipment wish list. If you’ve been delaying a scanner upgrade or new exam lane, this deduction could make it far more affordable — and get your investment working for you faster.

Health Insurance: The Deduction That Pays for Itself

If you're self-employed or own more than 2% of an S corporation, you may be overlooking one of the most valuable personal deductions available.

The opportunity: You can deduct 100% of health insurance premiums you pay for yourself, your spouse, and your dependents — even if you don’t itemize.

Real Example: Dr. Mike Rodriguez pays $18,000 annually for family health coverage. As a self-employed optometrist, he deducts the full amount, saving $6,300 in federal taxes (at a 35% tax bracket). That’s more than enough to cover his malpractice premium for the year.

What’s Included:

• Medical, dental, and vision insurance premiums

• Qualified long-term care insurance (subject to age-based limits)

• Health Savings Account (HSA) contributions: up to $4,300 for self-only coverage and up to $8,550 for family coverage in 2025

Important Rules:

• You must have net business income to claim the deduction.

• You can’t be eligible for coverage through a spouse’s employer plan.

• For S corp owners, the business must report the premiums on your W-2 and you must own more than 2%.

Planning Tip: If you operate multiple practices or entities, you may be able to strategically allocate insurance costs across them — as long as the business pays or reimburses the premiums — to maximize your deduction, especially if one entity alone doesn’t generate enough income to cover the full cost.

The QBI Deduction: 20% Off Your Practice Income

The Qualified Business Income (QBI) deduction lets optometrists deduct up to 20% of their practice income — and thanks to the OBBBA, it’s now permanent.

Example: Dr. Jennifer Park’s practice earned $200,000 in net income. After QBI adjustments, she deducted $44,000 — saving $8,800 in taxes at a 20% rate.

Who Qualifies?

Optometry is a Specified Service Trade or Business (SSTB), so the deduction phases out at higher incomes:

• $364,200 to $464,200 for joint filers

• $182,100 to $232,100 for single filers

Most solo and small group practices fall below these limits.

New Rule for 2026: Beginning in 2026, you must materially participate (e.g. 500+ hours/year) to qualify.

How It Works (by Entity Type):

• Sole Proprietors / Single-Member LLCs: Use Schedule C net income, minus adjustments.

• S Corporations: Only your K-1 business income qualifies — not W-2 wages.

• Partnerships: Each partner’s share of qualified income is eligible.

This deduction can save thousands — but accurate income tracking and entity planning matter.

Home Office: More Valuable Than You Think

Even if you see patients in a clinic or retail space, you may still qualify for a home office deduction — especially if you handle business tasks at home.

When It Applies: The space must be:

• Used exclusively and regularly for your practice

• Your principal place of business, or

• A location where you manage admin tasks or conduct telehealth

Common Use Cases:

• Managing staff and schedules

• Reviewing patient records or treatment plans

• Insurance authorizations and billing

• Telehealth consultations

Real Example: Dr. Lisa Thompson spends 15 hours a week on admin tasks in her 200-square-foot home office. Her home is 2,000 square feet, so she deducts 10% of eligible home expenses — like a portion of her mortgage interest or rent, utilities, and repairs.

Note: Renters also qualify. You don’t need to own your home to take the deduction.

Two Ways to Calculate:

• Simplified method: $5 per square foot (up to 300 square feet).  No depreciation, no recapture.
  
  
  

• Actual expense method:  Deduct your business-use share of actual home expenses.
  Planning tip: If you claim depreciation using this method, you may owe depreciation recapture tax when you sell your home.

Income cap reminder: The deduction can’t create or increase a net loss from your practice. Any unused portion can typically be carried forward.

What to Track: Keep records showing how the space is used — time logs, task summaries, and receipts for eligible expenses.

Professional Development That Actually Saves Money

Your continuing education isn’t just mandatory — it’s also deductible.

What Qualifies: You can deduct education expenses that maintain or improve the skills required in your current practice. Common examples include:

• CE courses and state-required continuing education

• Online training or certification renewals

• Board certification or re-certification fees

• Subscriptions to professional journals

• Dues for optometric associations

Travel counts too: If you attend a CE conference, you can deduct airfare, hotel, and 50% of meals — as long as the event relates to your existing optometry work.

Real Example: Dr. Carlos Martinez attended a three-day retinal imaging conference in Chicago. He spent $1,800 on registration, $900 on hotel, $500 on airfare, $300 on meals. He deducted $2,200 in expenses, plus $150 for meals (50%), saving $822 in taxes at a 35% bracket.

Important Note: You can’t deduct education that qualifies you for a new profession, even if it’s in healthcare. The course must relate directly to the work you already do as an optometrist.

Business Auto Use: Every Mile Counts

If you're self-employed or a business owner, using your personal vehicle for work-related tasks can lead to valuable deductions — as long as you track it right.

What Qualifies:

You can deduct business mileage for:

• Travel between multiple office locations

• Bank runs and supply pickups

• Professional meetings, CE events, and conferences

• Equipment delivery or transport

What Doesn’t:

• Commuting from home to your main office

• Personal errands, even with a business stop along the way

2025 Standard Rate: The IRS allows $0.70 per mile for business use. Drive 3,000 miles? That’s a $2,100 deduction.

Documentation: keep a log that shows: the date, destination and purpose, total miles driven. Apps like MileIQ or TripLog make this easy.

While the standard mileage rate is often the simplest, some practices may benefit from deducting actual car expenses — like gas, insurance, repairs, and depreciation. Ask your tax pro which method is best for your situation.

Office Rent and Mortgage Interest: The Basics That Add Up

Whether you rent or own your office space, these core deductions can make a meaningful difference — especially for high-overhead practices.

If You Rent:

You can deduct 100% of rent paid for business space, including:

• Base rent

• Common area maintenance (CAM) fees

• Property taxes passed through by the landlord

If You Own:

You can deduct mortgage interest on the business portion of your building. This often adds up quickly for practice owners with financed real estate.

Note: Property taxes, insurance, and depreciation may also be deductible — but they’re tracked separately from mortgage interest.

Also: Mortgage interest on business property is not subject to the $750,000 personal mortgage interest limit. The full business-use portion is generally deductible.

Mixed-Use Spaces:

If your building is part personal residence, part office, you can only deduct the business-use percentage. Be sure to document square footage, usage, and any shared costs.

Retirement Planning: Save Taxes Now and Later

Self-employed optometrists have access to some of the most generous tax-advantaged retirement options available — and they can dramatically reduce your current tax bill while building long-term wealth.

SEP-IRA:

• Contribute up to 25% of your net self-employment income, capped at $70,000 for 2025

• Simple to set up and maintain

• Best for practices without W-2 employees, or for those who want to contribute at year-end

Note: If you have eligible employees, you must contribute the same percentage for them too.

Solo 401(k):

• Ideal if you’re self-employed with no full-time employees (except a spouse)

• Allows contributions as both employee and employer

• 2025 total contribution limit (employee + employer):

  • Up to $69,000

  • Up to $76,500 if age 50+ (includes $7,500 catch-up contribution)

Pro tip: Solo 401(k)s can also allow Roth contributions and loans — and may be a better fit than SEP-IRA if you're under $250K in income and want more flexibility.

Real Example: Dr. Amanda Foster’s practice netted $180,000 last year. She contributed $45,000 to her SEP-IRA (25%), reducing her taxable income — and saving $15,750 in federal taxes at a 35% rate.

High Earner Option: For optometrists consistently earning $400,000+, a Defined Benefit Plan may allow six-figure contributions — though it comes with more complexity and mandatory funding requirements.

Bonus Tip for High Earners: Already maxing out your SEP or Solo 401(k)? You may still be able to contribute to a Roth IRA using the backdoor method — by making a non-deductible traditional IRA contribution and converting it to a Roth. This strategy can add tax-free growth to your retirement mix, but it requires careful coordination to avoid triggering unexpected taxes. Talk to a Town advisor before moving forward.

Employee Benefits: Deductible and Valuable

Offering the right employee benefits isn’t just good for retention — it can also meaningfully reduce your tax bill. Most benefits are fully deductible to your practice, and when properly structured, many are tax-free to employees.

Health and Insurance Benefits: The following are generally deductible by the practice and not taxable to employees:

• Health insurance premiums

• Dental and vision coverage

• Life insurance premiums (tax-free to employees up to $50,000)

• Disability insurance premiums

If you’re an S corporation owner with more than 2% ownership, your health and insurance benefits are treated differently. Be sure to work with your tax advisor to ensure they’re reported correctly and deducted appropriately.

Professional Development and Employee Recognition: These expenses support your team and help you build a stronger culture — while remaining fully deductible:

• Continuing education (CE) courses and certifications

• Subscriptions to professional journals

• Dues for professional organizations

• Employee appreciation programs and modest awards

Tax Credits to Know for 2025 and Beyond: In addition to deductions, your practice may qualify for valuable federal tax credits:

• Paid Family and Medical Leave Credit: This credit is now permanent. It’s available for wages paid during qualifying employee leave — or even for premiums on qualifying paid leave insurance policies.

• Employer-Provided Childcare Credit (Enhanced in 2026): Small practices can claim up to 50% of qualified childcare expenses, with a maximum annual credit of $600,000 for eligible businesses. This includes on-site childcare or payments to outside providers.

Non-Taxable Fringe Benefits (Still Fully Deductible)

These benefits are not considered taxable income to employees but are still deductible by the practice:

• Uniforms or scrubs required for work

• Cell phone stipends (when business use is documented)

• Occasional staff meals and snacks (through 2025)

• Employee achievement awards (within IRS limits)

Meals and Snacks: The 50% deduction for meals and snacks provided at the office is currently allowed, but set to sunset after 2025. Starting in 2026, these expenses may no longer be deductible unless Congress extends the provision.

Parking and Transit Benefits: If you provide parking or transit passes and choose to exclude their value from employee wages (up to $325 per month in 2025), the cost is not deductible by the business. These benefits can still be great tax-free perks for employees, but plan accordingly — you’ll lose the deduction if the benefit is excluded from wages.

Bonus: Accessibility May Unlock a Tax Credit: If your practice invests in ADA-compliant equipment or makes facility upgrades to improve accessibility, you may qualify for the Disabled Access Credit — a direct credit in addition to any equipment deduction.

What You Need to Do Next

Before December 31, 2025:

• Review equipment plans: Can you accelerate purchases to maximize your Section 179 deduction before year-end?

• Get your records in shape: Gather receipts for continuing education, home office expenses, mileage, and employee benefits.

• Measure your home office: If you qualify, calculate the business-use percentage now so it’s ready at tax time.

• Start tracking mileage: Use a mileage tracking app and begin logging business-related driving now.

Ongoing Habits That Make Tax Season Easier:

• Use separate accounts: Keep business and personal finances clearly separated.

• Document as you go: Save receipts, maintain logs, and record the business purpose of expenses while they’re fresh.

• Fund retirement early: Don’t wait until the deadline to maximize your SEP or Solo 401(k) contributions for the year.

Work with advisors who know optometry: Partner with someone who understands the tax rules unique to healthcare practices — like the team at Town.

Key Takeaways

• Section 179 equipment deduction: Deduct up to $2,500,000 in qualifying purchases placed in service by December 31, 2025

• Self-employed health insurance: Deduct 100% of premiums if you meet the requirements

• QBI deduction: Deduct up to 20% of your practice income — now permanent under the One Big Beautiful Bill Act

• Professional development: CE courses, conferences, certifications, and subscriptions are fully deductible

• Retirement contributions: SEP-IRAs and Solo 401(k)s let you defer taxes on up to $70,000+ in 2025

• Home office deduction: If you qualify, you can deduct a portion of your home expenses — even if you have a separate office

• Employee benefits and credits: Health insurance, CE, paid leave, childcare, and ADA-compliant improvements may all be deductible — and some may qualify for federal tax credits

• Business vehicle use: Deduct mileage or actual vehicle expenses for eligible business driving

• Documentation is everything: Good records are the foundation of every deduction you claim

The tax code may be 75,000 pages long, but the principles that save optometrists money are straightforward. Every situation is unique, and while this guide covers the key deductions available in 2025, the best results come from applying them to your actual numbers.

Don’t let another tax year pass without claiming what you’ve already earned. Your practice generates the expenses — smart tax planning turns them into savings.

Disclaimer: This article provides general tax information for educational purposes and should not be considered professional tax advice. Tax laws are complex and change frequently. What applies to one optometry practice may not apply to another, depending on structure, location, and individual circumstances.

Always consult with a qualified tax professional or CPA who understands healthcare practice taxation before making any tax decisions or claiming deductions. The IRS rules and limitations referenced here are current as of 2025 but may be updated or modified.

Town does not provide individual tax preparation or advice through this article.