Tax Tips for Veterinarians: Deductions, Depreciation, and Practice Growth

Whether you’re a solo veterinarian just opening your first clinic or managing a thriving multi-location animal hospital, taxes can eat into your margins if you’re not careful. Between equipment upgrades, fluctuating payroll, and high-volume inventory, veterinary practice taxes are complex financial operations.

The good news? With the right strategy, your tax return can do more than just check a box—it can help fund your future growth. Below are the tax strategies veterinary professionals should know to reduce liability and reinvest with confidence.

1. Know Which Expenses Are Deductible (And Track Them Year-Round)

Veterinarians qualify for a wide range of deductions—but only if you’re organized enough to claim them.

Common deductible expenses include:

Medical and surgical supplies
Prescription inventory
Office rent and utilities
Continuing education and license renewals
Marketing and website expenses
Employee wages, payroll taxes, and benefits

Don’t forget equipment leases, merchant fees from payment processors, and even your Columbus accounting services. If it supports the business, it likely qualifies.

2. Maximize Depreciation on Equipment and Build-Outs

Veterinary clinics are equipment-heavy. From digital X-ray machines and autoclaves to anesthesia monitors and lab testing systems, most of your tech is depreciable—and often deductible in the first year.

Here’s how to get the most value:

Use Section 179 to expense qualifying equipment in the year placed in service (up to $1 million in 2025)
Apply bonus depreciation to write off large purchases like vehicles, diagnostic equipment, and surgical lights
Consider a cost segregation study for clinic build-outs and renovations

A properly executed depreciation strategy can slash your taxable income and make it easier to reinvest in your facility. Learn more through our veterinary CPA services.

3. Separate Real Estate and Operating Entities (If You Own Your Building)

If you own the property where your clinic operates, consider holding it in a separate LLC and leasing it back to your practice entity. This can:

Create passive rental income
Unlock accelerated depreciation on the property itself
Protect your real estate from operating liabilities

This structure is especially useful if you’re planning to sell the practice but keep the building, or if you want to pass down property separately from the business.

Our business advisors can help set this up the right way—with clean documentation and tax-efficient lease agreements.

4. Review Entity Structure Annually

Many veterinary practices begin as sole proprietorships or single-member LLCs—but as revenue and headcount grow, that structure might not be doing you any favors.

If you’ve crossed into six- or seven-figure revenue, an S Corporation could help reduce your self-employment tax by allowing you to split income between salary and distributions. It also opens the door to additional fringe benefit deductions.

Not sure if an S Corp or partnership model fits your goals? Our small business tax team can assess your structure and recommend adjustments to reduce your overall liability.

5. Plan for Growth with Quarterly Tax Estimates and Cash Flow Tracking

Veterinary practices often experience revenue spikes from seasonal pet care, dental months, or vaccine clinics. To stay ahead of tax surprises:

Use year-to-date reports to project quarterly tax payments
Set aside 25–30% of net income for estimated taxes
Track cash flow weekly to avoid end-of-year shortfalls

This is especially important if you’ve added services like boarding, grooming, or online pharmacy sales—each of which can impact your tax obligations differently.

If you’re managing multiple services and get behind, we can help manage bookkeeping records and optimize accordingly.

Final Thoughts: Less Stress, More Growth

Veterinary medicine is about caring for animals—but running a practice is about managing a business. The right tax strategies can free up capital, reduce risk, and help you reinvest in your team, technology, and facility.

At Hogan CPA, we work with veterinarians across Columbus and surrounding communities to simplify taxes, improve visibility, and position their practices for sustainable growth.

Want to see where your clinic could be saving more?
Contact Hogan CPA to schedule a personalized tax review for your practice.