As we approach the end of 2025, veterinary practices should consider what needs to be accomplished before December 31 for planning purposes. December is a critical time to tie up any loose ends, double-check your financial reporting, and take steps to reduce your tax liability for the current year. Below are some important reminders for veterinary hospitals as we close in on year-end.

1. New Equipment Purchases: If you need new equipment for your hospital, consider purchasing that equipment and placing it in service before December 31 to receive the tax benefit for 2025. Keep in mind that the One Big Beautiful Bill Act, passed in July, restored 100% bonus depreciation and expanded the Section 179 deduction. 100% bonus depreciation applies retroactively to qualifying property acquired and placed in service after January 19, 2025, while the Section 179 expansion is effective for tax years beginning after December 31, 2024.
2. Inventory: Inventory counts have an impact on financial reporting, including year-end profit and loss statements. Conduct a physical inventory count before or at year-end, ensuring that your system accurately reflects what you have.
3. Health Insurance Premiums: Health insurance premiums for shareholders who own more than 2% of an S corporation need to be reported on W-2s. Provide this information to your payroll provider before year-end to avoid having to amend W-2s.
4. Personal Use of Company Vehicles: Any personal use of company vehicles must also be reported on employee W-2s and should be reported to your payroll provider before year-end. Employees should keep detailed records of all business and personal use of company vehicles, including miles traveled, locations, dates, times, and the purpose of the travel.
5. PTET: Discuss the possibility of opting into the Pass-Through Entity Tax (PTET) with your CPA, if the option is available in your state. The PTET can reduce your taxable income by providing a workaround for the federal cap on state and local tax (SALT) deductions. PTET elections must be made by March 15.
6. Retirement Plan Contributions: Maximizing your contributions to employee-sponsored retirement accounts before December 31 will lower your tax liability for 2025.
7. Staff Bonuses: Employee bonuses are considered “supplemental wages” by the IRS, and are required to be properly reported and taxed. Year-end staff bonuses issued before December 31 can be written off for the current year.

Prepare for Year-End with RBT CPAs

Meet with one of our veterinary accounting professionals at RBT CPAs to complete your year-end checklist. RBT CPAs has been providing accounting, tax, audit, and advisory services to businesses in the Hudson Valley and beyond for over 55 years. Reach out to us today—together, we can be remarkably better.

Many small businesses, including veterinary practices, utilize cash basis accounting for their financial records. Cash accounting provides the benefits of simplicity, a real-time view of the business’s cash flow, and greater control over recorded income for tax purposes. However, accrual basis accounting offers a more accurate representation of a practice’s financial health, enabling better financial decision-making and practice management. Let’s talk about the primary differences between cash and accrual accounting—and why you should maintain an accrual basis for your books, even if you use a cash basis method for tax returns.

Cash Accounting

Businesses using the cash method of accounting recognize financial transactions at the point when cash is received from customers or paid out to third parties, not when the transactions actually take place. Cash basis accounting makes it easier to track the flow of money in and out of a business’s accounts, as it provides a real-time picture of available capital. Because accounts receivable and payable do not need to be tracked when using cash accounting, this method often requires less administrative work and is simpler for businesses to manage. Additionally, this method allows businesses to defer tax payments on income that has been billed to customers but not yet collected. Typically, only small businesses are permitted to use the cash basis method of accounting. While this method of accounting is simpler, it offers a less accurate view of a business’s financial health than accrual accounting.

Accrual Accounting

Unlike cash accounting, accrual accounting recognizes revenue at the point when it is earned and expenses at the time they are incurred. Accrual basis accounting ensures that income is matched with the time period in which goods or services were actually provided, and that expenses are recognized for the time period in which goods or services are received. In this way, accrual accounting provides a more accurate picture of a business’s financial health. While this method requires that cash flow be tracked separately and may not always provide the most accurate short-term depiction of available funds, accrual accounting provides more comprehensive insights for long-term financial planning and practice management.

Benefits of Using Accrual Accounting for Your Books

1. Provides a more accurate and comprehensive picture of your practice’s financial health and profitability.
2. Leads to a more accurate EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by matching revenues and expenses to the period in which they were earned and incurred.
3. Helps you compare and benchmark your profitability against other practices.
4. Guides decisions related to practice management, informing processes such as budgeting, forecasting, and cash flow management.

Learn More

RBT CPAs’ veterinary accounting experts can help you understand and implement an accrual accounting system in your practice, so you can achieve a clearer image of your practice’s financial situation and make more informed management decisions. And as always, our professionals are here to support all of your practice’s accounting, tax, audit, and advisory needs. Give us a call today and find out how we can be Remarkably Better Together.

On July 4, the president signed into law the One Big Beautiful Bill Act (OBBBA), implementing many significant tax and spending policy changes. The law’s provisions are wide sweeping and will have impacts across a range of industries. This article highlights some of the key provisions of the new legislation impacting veterinarians.

Permanent Extension of TCJA Tax Rates

The OBBBA makes permanent the tax rates and brackets established by the Tax Cuts and Jobs Act (TCJA) of 2017.

Increased SALT Cap

The OBBBA temporarily increases the federal deduction limit for state and local taxes (SALT cap) from $10,000 to $40,000. The limit will be adjusted each year for inflation until 2029. In 2030, the SALT cap will revert to $10,000. The deduction phases out for taxpayers with modified gross income (MAGI) greater than $500,000 in 2025, with the MAGI threshold adjusted for inflation until 2029. For high-income earners before 2030, the SALT deduction is reduced by 30% of their MAGI over the threshold amount, but the deduction will not be reduced below $10,000. The OBBBA places no limitations on Pass-Through Entity Taxes (PTET), which are workarounds for SALT.

Increased Section 179 Deduction

The Section 179 deduction allows businesses to deduct the full purchase price of qualifying property immediately, rather than spreading the deduction out over several years. The OBBBA increases the Section 179 expensing limit to $2.5 million. The limit is reduced by the amount by which the cost of qualifying property exceeds $4 million (new phasedown threshold).

No Tax on Overtime

The OBBBA creates a temporary deduction of up to $12,500 ($25,000 for joint returns) for individuals who receive qualified overtime compensation (as defined by the Fair Labor Standards Act). The deduction applies only to overtime compensation. The deduction begins to phase out when the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for joint filers). This deduction is available for tax years 2025 through 2028.

Estate & Gift Tax Exemption Amounts

The OBBBA permanently increases the federal estate tax and lifetime gift exemption amount to $15 million for single filers ($30 million for married couples filing jointly), beginning in 2026. This amount will be indexed for inflation annually.

Alternative Minimum Tax Exemption (AMT)

The OBBBA permanently extends the increased individual AMT amounts established by the TCJA, which will be indexed annually for inflation. The income thresholds for which the exemption begins to phase out have reverted to their 2018 levels of $500,000 for single filers ($1 million for married couples filing jointly), also adjusted annually for inflation. The phaseout rate has been increased to 50% (from 25%) of the amount by which a taxpayer’s alternative minimum taxable income (AMTI) exceeds the threshold amount.

Trump Accounts

The OBBBA establishes a “Trump account,” a new tax-deferred investment account for children who are U.S. citizens under the age of 18. Contributions to these accounts are capped at $5,000 a year (adjusted for inflation after 2027) and can be made by parents, relatives, employers, and other taxable entities, as well as non-profit and government entities. Accounts opened for children born between January 1, 2025, and December 31, 2028 will include a one-time $1,000 government contribution.

Charitable Contributions

For taxpayers who do not itemize, the OBBBA creates a charitable contribution deduction of up to $1,000 for single filers for certain charitable contributions ($2,000 for married couples filing jointly). For taxpayers who choose to itemize, the OBBBA establishes a 0.5% floor on the charitable contribution deduction. For corporations, the bill establishes a 1% floor for charitable deduction contributions. Deductions for corporate charitable contributions cannot exceed 10% of the corporation’s taxable income.

Increased 1099 Reporting Threshold

The OBBBA increases the information-reporting threshold from $600 to $2,000, indexed annually for inflation.

Additional Guidance

The above provisions represent just some of the recent tax and policy changes that may impact you and your practice. To learn about additional relevant provisions—and for insights and guidance on how these changes could affect you—please don’t hesitate to reach out to our veterinary accounting professionals at RBT CPAs. Our team is here to support all of your tax, audit, accounting, and advisory needs. Give us a call today to find out how we can be Remarkably Better Together.

According to a recent article by the American Animal Hospital Association (AAHA), some of the primary challenges facing veterinary practices in 2025 are economic uncertainty due to inflation and other economic pressures, declining patient visits, and staffing shortages. Amid economic uncertainty, veterinary practices must concentrate on the factors within their control. Given the current state of the market, three areas on which veterinary practices should focus their attention and efforts in 2025 are profitability, financial health, and staffing. These issues are critical to the overall health of a veterinary business—and are especially important for those considering selling their practice in the near future.

1. Profitability

Though raising fees may have worked in the past as a way of increasing profits, it might not be a viable option for veterinary practices in 2025, with pet owners becoming more and more concerned about rising pet care costs in the current economic climate. With less control over the top line (total revenue), you should focus on the bottom line (net profit) as a way of maintaining strong profit margins. As costs continue to rise, especially for labor and supplies, you will need to attempt to manage costs where you can. Some areas to focus on include inventory, building and maintenance contracts, and staff turnover. You should take time to examine your sources of revenue: Are they profitable? Are there any opportunities to add additional services? You should also review your practice’s write-offs and discounts, making sure you’re not giving too much away. Lastly, fostering a positive workplace culture and employee retention can help to maximize your practice’s profitability. Employee turnover is costly, costing practices up to 50% of an employee’s salary each time a staff member leaves. Therefore, improvements in employee retention can contribute significantly to your practice’s success and profitability.

2. Financial Health

Practices should keep a close eye on their EBITDA (earnings before interest, taxes, depreciation, and amortization) to monitor financial performance. Other ways of maintaining financial health include budgeting, accurate financial reporting, regular internal audits, reviewing for billing errors or missed opportunities, reviewing trends in average transactions, and cash flow management. You may want to consider outsourcing financial duties to an accounting firm such as RBT CPAs to maximize efficiency and accuracy in your financial processes.

3. Staffing

As mentioned above, employee turnover can be very costly for veterinary practices—and unfortunately, turnover rates continue to be high for the industry. As the veterinary industry continues to face staffing shortages and retention issues, it’s now more important than ever for practices to focus their efforts on retaining and supporting employees. Student debt for veterinary graduates is on the rise again, according to dvm360. You can attract and retain high-quality veterinary staff by offering benefit plans and maintaining fair wages. Other factors that contribute to employee satisfaction and retention include a supportive workplace environment, high-quality training, workplace practices aligned with a strong mission or value statement, and employee wellness plans. Read more about maintaining a happy and healthy workplace here.

Have Questions?

Managing the business side of your practice in the face of economic uncertainty can be an overwhelming responsibility—but you don’t have to go at it alone. RBT CPAs is here to support your practice’s accounting, tax, audit, and advisory needs. Whether you’re looking to outsource your accounting or seeking guidance on building a financially healthy business, RBT CPAs’ veterinary accounting and advisory services team is here to help. At RBT CPAs, we believe we succeed when our clients succeed. Learn more about how we can be Remarkably Better Together by contacting us today.

Veterinary offices are busy workplaces made up of many moving parts. While veterinarians and medical staff work hard each day to treat patients, practice managers and administrative staff maintain the operational side of the business. Each day, team members carry out financial processes vital to the operation of the practice. But are these processes being thoroughly documented? By taking the time to document financial processes and team member duties, veterinary practices create consistency across business operations, maintain organized systems, reduce training and onboarding time, ensure business continuity when team members leave, and enable informed decision-making.

What financial processes should be documented?

Processes that should be documented include all bookkeeping tasks such as managing daily financial transactions, financial reports, balance sheets, cash flow statements, general ledgers, and income statements. Other processes that should be documented include payroll management, budget creation, and financial forecasting.

What does it mean to document your financial processes?

Documenting your processes requires breaking each task down into a series of clearly outlined steps. These steps should be presented in a way that they can be easily followed by someone else if necessary. One method of documenting processes is process mapping, a technique that utilizes visual representations of workflows and team member responsibilities. A flowchart is an example of a type of process map.

Why is it important to document processes and team member duties?

There are many reasons you should be documenting your practice’s processes and team member responsibilities. A well-documented system creates organization, efficiency, and consistency within your operations. An effective system of documentation should lay out each team member’s essential duties, indicating what tasks fall under each position. This ensures that all necessary tasks are carried out while reducing confusion over responsibilities and creating a more efficient workflow. Documenting processes also creates consistency in operations, allowing tasks to be completed the same way every time. Consistent procedures not only improve the quality of your operations but also gain the confidence of team members and clients. Standardized processes demonstrate professionalism and reliability, especially when it comes to the management of your practice’s financials.

Documenting your processes also ensures business continuity should a team member leave his/her position. What if your bookkeeper unexpectedly leaves tomorrow? Would your practice continue operating smoothly? What about the team member in charge of payroll? Would your staff continue to be paid on time? Documenting essential processes and roles reduces disruption to your business’s operations should a situation like this occur. Even when a team member’s departure is expected, the transference of duties to the incoming team member can consume significant time and energy. Detailed descriptions of each position and the corresponding responsibilities aid immensely in the training and onboarding of new staff. This is especially true for cases in which the outgoing team member has been in his/her role for several years and has functioned autonomously for much of that time. Proper documentation of duties allows the knowledge of experienced employees to be passed on to succeeding team members, rather than being lost during transition.

Lastly, detailed documentation of financial processes aids a practice’s ability to assess and improve its operations. Documentation helps veterinary practices monitor compliance with financial regulations and legal requirements, prepare for audits, and maintain internal controls. It also allows practices to review their financial processes and determine if there is a need for improvement, guiding informed decision-making for practice owners and managers.

Time to document!

The task of documenting your practice’s financial processes and team member duties can require significant time and effort initially. However, the benefits of documentation far outweigh the costs. Documenting your processes will ensure your business is run efficiently so that you can focus on your core mission of caring for your animal patients. For guidance on documenting your financial processes, reach out to our experts at RBT CPAs. You can count on RBT CPAs for exceptional accounting, audit, tax, and advisory services. Give us a call today to find out how we can be Remarkably Better Together.

Among the many factors that contribute to stress in the Veterinary field, student loan debt is a big one. With the average student loan debt for vets reportedly ranging from upwards of $150,000 – and sometimes as high as $400,000, veterinary practices looking for ways to attract and retain talent may want to explore education assistance programs and defined contribution savings plans. Here’s why…

Under Section 127 of the IRS code, employers can use an educational assistance program – commonly used to help employees pay tuition, fees, and other costs of going to school while working — to help employees pay student loan obligations through December 31, 2025 (unless it’s extended via legislative actions).

To set up a program, an employer must put it in writing and adopt related administrative processes. The IRS recently provided sample language for a program making it even easier for employers to get started.

Under a program, an employer can offer $5,250 per year in total benefits. An employer can pay principal and interest on an employee’s qualified educational loan, up to the annual maximum. Best of all, the benefit is tax-free to the employee and a tax deduction for the employer. The IRS recently issued FAQs with more details.

In addition, thanks to the SECURE 2.0 Act, employers that offer a 401(k), 403(b), SIMPLE IRA or 457(b) qualified retirement plan can opt to include a student loan matching contribution feature. Put simply, when an employee makes payments for a qualified higher education student loan, the employer can make matching contributions to the retirement plan in their name. This way, the employee can continue paying student debt and, at the same time, build income for retirement.

According to recent IRS guidance, a qualified student loan payment can be for the employee, a spouse, or a child, providing greater flexibility and opportunities to pay down student loan debt. Limitations may apply.

Making this an even sweeter deal, certain employers (with fewer than 100 employees) may be eligible for a tax credit of up to $5,000 for each of three years when they start a qualified plan like a 401(k) or SIMPLE IRA.

If you have questions or need assistance getting started, RBT CPAs and its affiliates are here to help.

Our Spectrum Pension and Compensation professionals specialize in designing and administering retirement plans like 401(k)s or SIMPLE IRAs.

Our Visions Human Resources Services professionals can help you set up an educational assistance program (and address any other HR needs you may have).

Your RBT CPAs contact can help you navigate accounting, tax, and audit implications and compliance.

To get started, email slhowell@rbtcpas.com to set up a meeting with representatives from all three of our organizations (Spectrum, Visions Human Resource Services, and RBT CPAs) and experience firsthand what we mean when we say you and RBT CPAs can be Remarkably Better Together.

Please note: The preceding information contains highlights only. It’s a good idea to speak with a benefits professional, HR advisor, or benefits legal council to understand all of the implications and requirements of adopting and administering benefit plans.

When was the last time you took a close look at your practice’s billing processes and results?

Given the current inflationary environment, where everything from food to gas costs more, you may want to take a close look at your billing practices to help maintain and protect cash flow.

Effective billing practices are essential to capturing all possible revenue and maintaining or boosting your bottom line. Services rendered may not be correctly billed due to oversight, the lack of standardized processes, or insufficient training, and the costs of these mistakes can add up over time.

To address this, it’s a good idea to regularly speak with your staff about the importance of accurate billing and the negative financial implications of missed charges. Use this as an opportunity to foster teamwork and commitment to achieve a common goal: 100% accuracy in billing.

Consider making this responsibility part of job descriptions and performance reviews. Linking pay and performance for billing accuracy reinforces its importance and can motivate greater attention to detail.

Also, inexpensive rewards – like a pizza party at the end of a month with no billing omissions or a gift card to the person with the best track record for accurate billing – can go a long way to engage your team in upholding best-in-class practices.

As people get caught up in the flurry of daily office activities, shortcuts or slight adjustments to protocols may emerge and, over time, become routine. Keep your billing protocols intact with periodic training where procedures and protocols are reviewed and goals for billing accuracy are reinforced. To keep it interesting, consider conducting a “mock appointment” to refresh your team’s knowledge and understanding of expectations.

Regular audits of billing records can help identify billing errors, omissions, or oversights. This can range from simply auditing a few bills each week to hiring an outside firm to evaluate billing performance and opportunities. Watching key financial indices – like revenue-to-expense ratios or gross margin – can help identify red flags signaling potential billing issues.

Finally, with the constant evolution of technology, staying in the know about billing systems and capabilities can help you identify additional opportunities to automate and reduce the likelihood of missed fees.

If you simply can’t see adding these responsibilities to your already overflowing to-do list, give RBT CPAs a call. Whether you want to outsource bookkeeping and accounting, audit your practice or books, or rent a CFO part-time, we would appreciate having the opportunity to show you how we can be Remarkably Better Together.

RBT CPAs has been providing accounting, audit, advisory, and tax services to businesses in the Hudson Valley and beyond for over 55 years. We are proud to say 100% of our work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

How did your veterinary practice fair this past tax season? Did you owe more than expected? Were you surprised? At RBT CPAs, we work with clients to develop tax planning strategies to help you avoid surprises and potentially keep more of your hard-earned money.

We start by learning about you, your business, and your short- and long-term business goals. Your strategy for taxes can differ and change depending on a variety of factors, like whether you have had a few profitable years in a row; whether you rent or own the building where your practice is based out of; whether you plan on expanding services requiring investments in equipment and more employees; and more.

Next, we walk you through opportunities to reduce tax liabilities. For example:

• Do you need new (or used) office furniture or equipment? You may qualify for Section 179 deductions for the cost of computers and software, furniture, equipment, and certain vehicles. If you put any eligible purchases into service before the end of this year, there’s an additional 60% bonus deduction. The bonus deduction drops to 40% in 2025 and 20% in 2026 before expiring come 2027. So, even if you were thinking of waiting another year to make certain purchases, the higher bonus deduction may be worth accelerating your timeline.
• Do you own the building that your practice operates from? Are you considering facility updates or an expansion? If you do you’ll want to know about the beneficial tax treatment of energy-efficient upgrades. Security, HVAC, and fire protection systems, as well as structural improvements, may qualify for deductions.
• Do you and/or your staff attend industry conferences or events? Travel, hotel, and the cost of the event may serve as deductions – just be sure to keep good records and receipts.
• Do you host off-site meetings and events for staff? If you use your home – primary or vacation – as the meeting location, you can charge your business “reasonable rent” without having to claim it as income. This only applies if the maximum number of rental days is 14 or less; although, they don’t have to occur concurrently.
• Are there benefit plans you should consider offering to enhance your ability to attract and retain employees and get a tax deduction for contributions?
• Are you taking advantage of an accountable plan for employee business expenses so you and your employee save on withholding and FICA taxes?
• What are the pros and cons of changing your business structure (for example, from a single-member LLC to an S Corp)? Is now the right time?

Finally, we equip you with a roadmap to help you make the most of the time left in 2024 to make smart tax moves. Interested in learning more? Schedule a tax review and planning session today by emailing slhowell@rbtcpas.com or going to our webpage to request a meeting. We would love to have the opportunity to show you how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.