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When reviewing financials for an optometric clinic, one of the most common areas of confusion comes down to how insurance receipts differ from private pay.

On the surface, revenue is revenue. But from a bookkeeping and performance standpoint, how that revenue is collected—and when it hits the bank—can significantly impact how your financials look and how you interpret them.

Let’s break down the key differences and why they matter.

 

1. Timing Differences: Immediate vs. Delayed Cash Flow

Private Pay

Private pay transactions are straightforward:

  • Patient pays at the time of service (cash, card, HSA, etc.)
  • Funds are deposited quickly (often same day or within a few days)
  • Revenue and cash flow are closely aligned

From a bookkeeping standpoint, this creates clean, predictable reporting.

 

Insurance Receipts

Insurance is a different story:

  • Service is performed today
  • Claim is submitted
  • Payment may not arrive for 2–6 weeks (or longer)
  • Payment may be partial, with adjustments and patient responsibility remaining

This creates a timing gap between production and cash collection.

 

2. How This Flows Through the Financial Statements

Your accounting method plays a big role here, but most optometry clinics (including our bookkeeping clients) operate on a cash-based reporting approach for management purposes.

Under a Cash-Based (Operating Net) View

Private Pay:

  • Revenue is recorded when cash hits the bank
  • Financials reflect performance in near real-time

 

Insurance:

  • Revenue is recorded only when the insurance payment is received
  • This means:
    • A strong production month may look weak if collections lag
    • A later month may look inflated when prior claims are paid

Result: Monthly revenue can fluctuate based on insurance timing, not actual clinical performance.

 

3. The Disconnect Between Production and Collections

This is where many clinic owners get tripped up.

Your practice management system may show:

  • High production
  • Strong patient volume
  • Healthy billing activity

 

But your financials (based on bank activity) may show:

  • Lower revenue for the same period
  • Increased variability from month to month based on when insurance payments are received
  • Limited visibility into what has been earned but not yet collected

That’s not an error—it’s a timing difference.

 

4. Evaluating Performance the Right Way

Because of these differences, it’s important not to rely on a single data point.

What to Watch for Instead

1. Trends Over Time

Look at rolling 3-month or 12-month trends rather than a single month:

  • Smooths out insurance timing delays
  • Gives a clearer picture of true performance

 

2. Consistency in Collections

Ask:

  • Are collections generally keeping pace with production over time?
  • Are delays increasing or staying consistent?

 

3. Accounts Receivable Insights

Rather than trying to track A/R within your accounting system, rely on the A/R reports within your practice management software:

  • Monitor outstanding insurance balances
  • Identify aging trends or slow-paying carriers
  • Ensure collections align with production over time

 

5. Why This Matters for Decision-Making

If you don’t account for these differences, you may:

  • Underestimate a strong month
  • Overestimate a “catch-up” month
  • Make incorrect staffing or expense decisions

 

For example:

  • Cutting costs after a “slow” month that was actually a collection lag issue
  • Over-hiring after a “strong” month that included prior period insurance payments

 

6. Practical Takeaways for Optometry Clinics

  • Private pay provides real-time visibility
  • Insurance creates delayed visibility
  • Cash-based financials are accurate for cash flow, but not perfect for timing of production

To manage this effectively:

  • Focus on trends, not single months
  • Understand your payer mix
  • Use financials alongside production reports from your practice management system
  • Monitor collection timing patterns through A/R reports

 

7. How Williams Group Financial Approaches Reporting

At Williams Group Financial, our goal is to make your financials as useful and actionable as possible, even with the inherent timing differences that come from insurance reimbursements.

We structure our reporting to focus on cash flow visibility through an operating net approach, which allows you to see all cash activity flowing through your business in a single, easy-to-understand format. This includes not just income and expenses, but also items that typically sit on the balance sheet, such as loan payments and owner distributions.

 

Because we understand the disconnect between production and collections, we also emphasize:

  • Consistent monthly reporting timelines so you can evaluate trends reliably
  • Quarterly benchmarking to compare performance over time and against industry standards

This approach helps ensure that even when timing differences exist, you still have clarity around the overall health and performance of your clinic.

 

Final Thought

Neither insurance nor private pay is better from a bookkeeping standpoint—but they require different interpretation.

The key is understanding that your financials are telling you a cash story, not always a production story.

Once you make that distinction, your reporting becomes much more useful—and your decisions much more informed.

 

Get optometry-specific financial consulting by scheduling a call with Patrick McReynolds or learn more about our bookkeeping services, specific for ODs, on our website.

Patrick McReynolds

Operations Manager

Email Patrick

 

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For years, meals provided for the convenience of the employer such as food during long clinic days or snacks kept in the breakroom have generally been 50% deductible.

Starting January 1, 2026, an important tax change will affect optometry practices that occasionally provide meals or snacks for staff and those expenses will no longer be deductible at all. 

Practices can still provide food for their team, but the cost will no longer reduce taxable income. For optometry practice owners, this change likely won’t alter daily operations, but it will affect how these expenses show up on your tax return.

Why the Deduction Is Changing

Under current tax rules, many businesses have been able to deduct 50% of employer-provided meals when they were considered necessary for business operations. However, the Tax Cuts and Jobs Act (TCJA) included a provision that phases out this deduction beginning in 2026.

Once the rule takes effect:

  • Meals provided for the convenience of the employer will become fully nondeductible
  • The expense will still be allowed from a business standpoint
  • But it will no longer reduce taxable income

For practices that regularly provide meals or snacks for staff, this simply means those expenses will now be treated similarly to other nondeductible costs.

What This Means for Optometry Practices

Common examples many optometry practices provide food for their team include:

  • Lunch brought in during long clinic days
  • Food provided during staff meetings or training sessions
  • Meals during extended work hours
  • Breakroom snacks or refreshments available to employees

These expenses will remain acceptable from a practice management perspective, but they will no longer generate a tax deduction.

For most practices, the financial impact will be relatively small. Still, it’s helpful to understand how these expenses will be treated going forward.

Meal Expenses That Will Still Be Deductible

Not all meal deductions are disappearing. Certain business meals will still qualify for a 50% deduction, including:

  • Meals With Referral Sources or Business Partners
    • Meals where business is discussed with referral partners, vendors, or other professionals can still qualify as business meals.
  • Meals During Business Travel
    • Food purchased while attending conferences, continuing education events, or other business travel will continue to qualify for a 50% deduction.

To remain deductible, these meals must follow standard IRS rules:

  • Expense cannot be lavish or extravagant
  • Documentation should include date, location, attendees, and business purpose

Proper recordkeeping will continue to be important for these deductions.

Events That Remain 100% Deductible

Some employee-related events will still qualify for a full deduction. These include activities considered employee morale events, such as:

  • Holiday parties
  • Staff appreciation events
  • Occasional celebrations open to all employees

Because these events are considered employee benefit activities rather than routine meals, they continue to receive different tax treatment.

How Optometry Practices Can Prepare

For most optometry practices, this change won’t significantly alter day-to-day operations. Many offices will continue providing meals or snacks for staff when it makes sense operationally. However, practices may need to review how these expenses are tracked and categorized in their accounting records. Separating meal categories can make tax reporting easier once the rule takes effect.

For example, track:

  • Staff meals
  • Business development meals
  • Travel meals
  • Employee morale events

Clear categorization helps ensure that deductible expenses are handled correctly while nondeductible costs are properly recorded.

While the financial impact of routine staff meals and breakroom food will no longer be tax deductible will likely be modest for most optometry practices, understanding the rule ahead of time can help ensure expenses are properly categorized and tax reporting remains accurate. 

As always, small planning decisions throughout the year can make tax preparation smoother and help prevent surprises.

If you’re unsure how this change may affect your practice or if you’d like help reviewing your bookkeeping categories, working with an optometry-specific CPA can help ensure everything is handled correctly.

Not a Williams Group client and feeling unsure about your categories? Schedule time with Archie Keebler, CPA, one of Williams Group’s premier optometry-specifc CPAs.

Archie Keebler

Tax Manager
Email Archie

 

 

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A Practical Guide to Reducing Payroll Stress, Improving Clarity, and Protecting Profitability

Payroll shouldn’t be the most stressful part of running your practice. But for many optometrists, it is. Not because the math is complex, but because the systems behind payroll often lack clarity and consistency. This guide outlines four actionable steps to reduce payroll stress, improve team clarity, and protect profitability based on Williams Group’s experience processing payroll for hundreds of optometric clients.

Payroll quickly becomes a headache and your labor costs quietly rise when:

  • Job roles are unclear 
  • Time tracking varies by person or shift 
  • Staffing levels aren’t aligned to patient flow 
  • And payroll information has to be manually re-entered into accounting 

The good news? These challenges are solvable with structure. 

The Root of Payroll Problems in Optometry Practices

Most payroll issues start with role confusion. This confusion leads to inconsistent productivity, which shows up as payroll inefficiency. When employees aren’t sure which tasks are theirs, practice owners often see: 

  • Inefficient labor: work being duplicated 
  • Unhappy patients: tasks being skipped 
  • Managerial burnout: staff asking for direction rather than acting
Step 1: Clarify Job Roles with Measurable Responsibilities

Clear job descriptions are more than lists of tasks and should spell out: 

Role  Responsibilities  Measurable Indicators 
Optician  Frame styling, lens consulting, adjustments, retail optical sales  Capture rate %, average optical sale, remakes 
Technician  Pre-testing, case history, special testing  Patients pre-tested per hour, accuracy of charting 
Patient Care Coordinator Scheduling, check-in/out, insurance verification  Scheduling conversion rate, wait time management 


When responsibilities connect to metrics, expectations become easier to manage and coach. 

Step 2: Align Staffing to Patient Flow

Overstaffing during slow periods and understaffing during busy periods is one of the biggest and most expensive payroll inefficiencies in eye care. Use historical patient volume reports, optical sales trends, daily/seasonal appointment patterns. 

To build staffing systems like: 

  • Split shift coverage during peak hours 
  • Cross-training to flex coverage where needed 
  • Scheduled “admin blocks” during slow periods so paid time is still productive 

By having better alignment there will be less waste and improved patient experiences.

Step 3: Use Time Tracking That Is Consistent, Transparent, and Enforced

If time is recorded differently depending on the day, person, or mood, payroll will always feel chaotic. 

Look for time tracking tools that: 

  • Require clock-in/out at the same station (not from phones) 
  • Track breaks and OT automatically 
  • Sync with scheduling software 
  • Export directly into payroll systems 

Consistency protects both the practice and the employee.

Step 4: Use Payroll Software That Integrates Directly with Accounting 

If someone has to manually re-enter payroll into QuickBooks, Xero, or your accounting platform: 

  • Errors creep in 
  • Reporting takes longer 
  • Month-end feels painful 
  • Labor costs are harder to analyze 

Payroll systems that sync with accounting provide: 

  • Instant labor cost visibility 
  • Cleaner bookkeeping 
  • Less time spent fixing errors 

Look for software that integrates payroll, scheduling, and time tracking so information flows automatically. 

The Result: Predictable Payroll and Less Stress

When job roles are clear, staffing aligns with demand, and payroll software does the heavy lifting: 

– Payroll becomes more predictable
– Labor costs stay under control
– Team accountability improves
– Managers spend less time correcting errors
– You get a clearer picture of practice profitability 

This is how practices reduce stress and cost creep  without burnout or micromanaging. 

Payroll problems rarely mean someone is doing something wrong. They usually mean the system needs more structure. And structure is something you can build — sustainably. 

If payroll has become a recurring pain point in your practice, you don’t have to figure it out alone. 

Williams Group helps optometrists: 

  • Clarify job roles 
  • Optimize staffing levels 
  • Implement integrated payroll + accounting systems 
  • Build predictable, efficient financial operations 
  • Process payroll wages and tax payments for direct deposit

Schedule a consultation to evaluate your current payroll workflow. 

Get optometry-specific payroll support by scheduling a call with Archie Keebler, CPA or learn more about our accounting services, specific for ODs, on our website.  

Archie Keebler

Tax Manager
Email Archie

 

 

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The Optometry Trap: When a “Write-Off” Isn’t the Win You Think

You know the moment. You’re at an optometry conference, you demo the new toy (I mean equipment), and suddenly your brain starts doing that thing where it turns a capital purchase into a personality trait. Or maybe it’s the end of the year and you don’t like the tax number Archie or Ryan (Williams Group Accountants) said you might owe next year.
Then someone says the magic words: “It’s a write-off.”

If you’ve ever caught yourself thinking, “well if it’s a write-off, it’s basically free,” we need to talk.

Meet Sue (an optometrist and her very persuasive equipment rep)

Sue owns a growing optometry practice. Her schedule is full, optical sales are strong, and her staff is doing that heroic thing where they keep the day moving even when everything’s on fire behind the scenes.

Sue gets pitched a shiny piece of equipment when the rep uses all the right phrases like: “It’ll change patient care,” “it increase referrals,” and “it will pay for itself.”
Sue questions: “Will I be able to write it off?”
The rep smiles. Sue smiles. The IRS does not smile. The IRS has never smiled. Not once.

First, What a “Write-Off” Actually Does
Here’s the thing: a deduction reduces your taxable income. It does not reduce your tax bill dollar for dollar.
Example – If you spend $50,000 on equipment and you get a $50,000 deduction, you did not “save $50,000.” You reduced the income you pay tax on by $50,000.
The actual tax benefit depends on your situation, your marginal rate, and whether you can even use the deduction this year.
I like to describe it as a 25% off sale. It saves you some money, but it’s not a slam dunk!
Also —and this is important— a deduction never fixes a bad business purchase. It just makes the bad purchase slightly less painful.

The Five Costs That Usually Get Ignored (Until They Show Up on Your Doorstep)
Most practices focus on the purchase price. The real cost is usually “purchase price plus the entourage.”
 
What usually gets forgotten:
  • Maintenance contracts and software fees. Monthly subscriptions have a way of multiplying like rabbits.
  • Training time. If your lead tech is in training, they’re not in clinic doing lead tech things.
  • Downtime and bottlenecks. New workflows are messy before they’re magical.
  • Consumables and add-ons. The base unit is never the whole story.
  • Staffing and scheduling impacts. If it adds 6 minutes per patient and you don’t have a plan, it may quietly shrink capacity.
None of these are reasons not to buy equipment. They’re reasons to buy with your eyes wide open. Ask the salesman about these issues before you commit to purchase.

The IRS “Rules of the Road” for Equipment Purchases
When you buy equipment for the practice, the IRS generally wants you to treat it differently than everyday supplies. Pens, contact lens solution, and printer paper get used up quickly, so they’re usually expensed right away. Equipment is different because it has a useful life that stretches beyond the current year, so the default rule is you capitalize it and recover the cost over time through depreciation.
There’s a common shortcut many practices use called the $2,500 de minimis safe harbor. In plain English: if you have a consistent accounting policy and you attach the election to your return, you can usually expense items that cost $2,500 or less per invoice (or per item, if itemized) instead of capitalizing them. Anything above that amount is typically capitalized unless you use a specific tax provision that allows faster write-offs.
The result? “I bought it” is only step one. The next step is deciding whether it’s a supply expense, a capital asset, or a capital asset you’re choosing to expense faster.

The Tax Reality Checks That Keep You Out of Trouble
Reality Check #1: The Timing Is About “Placed in Service,” Not When You Swipe the Card
For depreciation purposes, property is generally considered placed in service when it is ready and available for its specific use, even if you have not actually used it yet.
Translation: ordering it in December is not the same as having it installed, calibrated, and ready to use.
This is the trap that gets optometrists every year. The equipment is in a box. The contractor reschedules. Training is “next week.” And suddenly your “year-end write-off” is actually next year.
 
A Quick Example (because this is exactly how it happens)
Sue buys an OCT in December. It arrives. Everyone cheers. The install gets pushed to January. Training happens mid-January. It’s ready and available for use in January.
Sue still bought it in December, but the placed-in-service timing points to January. The tax deduction is shelved for next year. That’s not the IRS being mean. That’s just the IRS being the IRS.
If Sue had planned the timeline ahead of time, she would’ve known the likely tax year and could’ve decided whether the purchase still made sense.
 
Reality Check #2: “Immediate Write-Off” Is Not Guaranteed
Sometimes you can expense more up front, sometimes you depreciate over time, and sometimes you have choices. Section 179 is an election that lets you expense qualifying property up to certain limits, and it’s tied to when the property is placed in service. There’s also Bonus Depreciation we can use.
The rules and limits change over time, and the best choice depends on your tax picture. The point isn’t “always expense everything.” The point is “choose on purpose.”
 
Reality Check #3: Losses Aren’t Always as Useful as People Think
A big deduction is only a win if it offsets income you would otherwise be taxed on. If the purchase creates a loss, that loss might be limited or pushed into a future year depending on your setup and your broader return.
So if the clinic is already in a low-profit year, buying equipment purely for tax reasons can be like bringing a snowblower to Arizona. Technically, a tool. Practically, an odd choice.
 
Reality Check #4: Documentation Matters, and Vibes Don’t Count
If you ever get questioned, you want a clean story: what it is, what it cost, when it became ready and available for use, and that it’s used for business.
Helpful paperwork usually includes the invoice, delivery confirmation, install documents, training confirmation, and any “go-live” notes. The IRS is very into boring proof.

The “Buy It Like a Grown-Up” Playbook for 2026
Here’s a simple framework Sue can use that keeps both the business and tax sides aligned.
1) Start with the Business Case
Before tax savings are considered, answer two questions: Will this increase capacity, improve medical revenue, reduce headaches, or improve patient experience in a measurable way? And do we have the people and workflow to actually use it?
If the honest answer is “it would be cool,” that’s fine. Just don’t call it tax strategy.
 
2) Match the Purchase to Your Profit Year
Equipment strategy works best when it’s paired with a year where the practice has real taxable income. Depreciation is cost recovery, not a magic trick.
If you’re unsure what your year looks like, grab our most recent Cash Flow or Tax Planning document and see how we’ve predicted your year to turn out. Double check sales—if Doctor Days made sales take a plummet, we might need to reconsider the profit for that year.
 
3) Plan the Calendar, Not Just the Purchase
If you care which tax year the deduction lands in, you need a timeline that includes delivery, install, calibration, training, and being ready for clinical use. That’s what “placed in service” is getting at.
This is especially important late in the year, when vendors and contractors are booked and delays are normal.
 
4) Decide How You Want to Take the Deduction
At a high level, your options often include depreciating over time or electing faster methods like Section 179 when available and appropriate.
This is where planning matters. Sometimes you want the bigger deduction now. Sometimes you want to spread it out to stabilize taxes across years. Sometimes you want to preserve deductions for a higher-income year. Book some time with Archie or Ryan to discuss which would be better for your specific case.
 
5) Build the Total Cost Into Your Budget
If you buy equipment and then get surprised by maintenance fees, software, and staffing needs, that’s not a tax problem. That’s a planning problem.
A clean rule: if the ongoing costs make you flinch, you’re not ready to buy it yet.
The Bottom Line
If you want to buy equipment because it improves care and strengthens your optometry practice, great. That’s the best reason.
If you want to buy equipment because “it’s a write-off,” pause. A deduction is a nice side effect, not the main event. The main event is whether the purchase makes your practice better and whether it fits your profit, cash flow, and execution plan.

Thinking About a Purchase (or Already Committed to One?)
If you want support on planning your next purchase, reach out to your Williams Group accountant with your 2026 wish list and your expected go-live dates. We’ll help you sort the purchases into three buckets:
  1.  smart now
  2.  smart later
  3.  cool but let’s not pretend it’s strategy
Not a Williams Group client and feeling unsure about a purchase or want a real equipment strategy for 2026, not “buy stuff in December and hope,” schedule time with Archie Keebler, CPA, one of Williams Group’s premier optometry-specifc CPAs. We’ll review your profit trends, cash flow, and timelines, then map out what to buy, when to buy it, and how to document it so the tax outcome actually matches the plan.

Archie Keebler

Tax Manager
Email Archie

 

 

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Is An Associate OD an Employee or a 1099 Contractor?

Bringing on an associate OD is a major decision for your optometry practice. But classifying that associate incorrectly could expose you to a pile of IRS penalties, payroll tax issues, and even legal troubles at the state level.

The employee vs. independent contractor question isn’t just about taxes, it’s about how your practice functions day to day, and whether the associate is truly independent or a core part of your team.

This practical guide, built specifically for optometry practice owners, will walk you through how to structure the relationship correctly, what the IRS really looks for, and how to protect your practice from costly missteps.

How the IRS Defines the Relationship: 3 Key Factors

Contrary to popular belief, you don’t get to choose whether an associate OD is a contractor or employee. The IRS looks at the facts and circumstances, not what you write on the contract or how you pay them. Here are the three main categories the IRS uses to assess worker classification:

1. Behavioral Control

If the practice controls how the associate OD performs their work, they’re typically an employee.

Examples in an optometry practice:

  • Practice sets their clinic hours
  • Practice assigns patients to their schedule
  • Associate uses practice’s staff (techs, front desk, billing)
  • Associate follows office protocols for exams, documentation, and billing
  • Owner reviews the associate’s clinical performance

Bottom line? If the associate OD is following the practice’s directive, they’re most certainly an employee.

2. Financial Control

This part gets overlooked, but it matters. Indicators of an independent contractor include the ability to operate their own business. In an optometry setting, this rarely applies. 1099 contractor characteristics would typically include:

  • Investing in their own tools or equipment
  • Covering their own CE, licensing, and malpractice
  • Setting their own fees
  • Invoices you for services
  • Realizes a potential to earn a profit or take a loss

Most optometry practices fail these tests because the clinic controls financial aspects of care delivery.

3. Type of Relationship

This one zooms out and looks at the overall working relationship.

Here’s what the IRS checks:

  • Is there a formal written employment agreement?
  • Is the practice providing benefits like PTO, health insurance, or a 401(k)?
  • Is this a long-term relationship that’s integral to the business?
  • Do you represent the associate publicly (e.g., on your website)?

In almost every full-time associate scenarios where associates provide core services that are essential to the practice, these questions point straight to employee status.

Can an Associate OD Ever Be a True Contractor?

Yes, but it’s rare and requires some very specific structuring. Here are the cases where a 1099 contractor may be possible:

  • The OD operates through their own entity (LLC or S-corp)
  • The OD sets their own schedule with no control from the practice
  • The OD uses their own equipment, staff, and provides services independently
  • The OD invoices you instead of receiving a paycheck
  • The OD is brought in for specialty or limited work, such as:
    • Fill-in or vacation coverage
    • Low-vision specialist seeing patients periodically
    • Mobile OD services contracting with the practice

But here’s the catch: If the associate OD works only for you, follow your protocols, and see your patients; they’re your employee.

Optometry-Specific Classification Traps to Watch Out For

Optometry isn’t like other industries. Patient care is heavily regulated, and that adds extra complexity. Some high-risk areas to be mindful of:

Patient Scheduling

If your front desk is booking patients for the associate, that is employee behavior.

Billing & Medical Records

Using your EHR and billing systems shows you’re in control of the clinical and financial side. That’s another employee signal.

Malpractice Insurance

If you’re footing the bill for malpractice coverage, the IRS sees that as an employer responsibility.

Non-Competes & Non-Soliciation 

You generally can’t restrict the future practice of a true contractor this way. These kinds of enforceable clauses only hold water with employees.

How Compensation Structures Tip the Scale

W-2 Employee:

  • Paid hourly, daily, or salaried
  • Bonuses based on production (optional)
  • Eligible for benefits
  • Payroll taxes withheld
  • Licensing/CE covered by practice

Independent 1099 Contractor:

  • Paid per diem or per exam
  • No benefits
  • Handles their own taxes
  • Provides their own malpractice coverage
  • Invoices the practice directly

If the compensation structure looks like a traditional employee arrangement, the IRS will treat them as an employee, regardless of what the contract says.

Practical Examples

Example 1: Full-Time Associate OD in a Busy Practice
  • 40 hours a week
  • Practice sets hours
  • Uses practice staff
  • Standardized exam protocol

Employee

Example 2: Part-Time Saturday OD
  • Schedules vary based on OD availability
  • Paid per diem
  • Not integrated into staff meetings or internal procedures

Could be a contractor if structured properly

Example 3: Fill-In Associate OD for Vacations
  • Works occasionally
  • Provides invoice
  • No ongoing commitments

Contractor

Example 4: Mobile OD Providing Specialty Exams
  • Brings own equipment
  • Bils per patient

Contractor

Consequences of Misclassification

Misclassifying an associate OD isn’t just a paperwork issue, it can create a financial mess for your practice. Here’s what a misclassification can trigger:

  • Back payroll taxes (plus interest)
  • Employer’s share of Social Security & Medicare
  • Penalties for not withholding federal and state taxes
  • Wage claims at the state level
  • Workers’ comp exposure
  • Liability for benefits that should’ve been offered

And yes, the IRS can look back three years or more during an audit.

Best Practices for Staying Compliant

If Hiring as an Employee (W-2):

  • Use a formal employment agreement
  • Provide a clear compensation structure
  • Set and enforce consistent clinic protocols
  • Run payroll properly
  • Offer benefits as desired

If Hiring as a Contractor (1099):

  • Require that they operate as an LLC or PC
  • Ensure they set their own hours and patient load
  • Have them invoice you
  • Avoid offering benefits or training
  • Skip the non-compete (but a non-solicit might still work)

For most optometry practices, hiring an associate OD means hiring an employee, not a contractor. A contractor arrangement is only appropriate when the OD is genuienly independent, works for multiple practices, or provides speialty/occasional services. 

Correct classification protexts your practice, minimizes risk, and ensures compliance with IRS and state rules. If you’re unsure, don’t guess. Talk to a CPA who understands optometry and can guide you through the compliance maze.

At Williams Group, we specialize in accounting, payroll, and advisory services for optometrists. Whether you’re bringing on your first associate OD or restructuring your current team, we’ll help you do it right and keep the IRS off your back. 

Get optometry-specific classification support by scheduling a call with Brad Rourke, CPA, ABV or learn more about our accounting and tax services specific for ODs on our website.  

Archie Keebler

Tax Manager
Email Archie

 

 

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A $30K Check Oops: Why Hand‑Written Tax Payments Are Bad for Your Vision (and Your Wallet)

Spoiler: the couple is fine, but their ulcer risk shot up—skip the antacids and read this instead.

What Happened

The digits in the number box were perfect: $3,360. But the spelled‑out line said “thirty‑three thousand + 60.” The bank followed the words, not the numbers. The IRS tried, twice, to pull $33,060. Both drafts bounced. The Hays couple then got slapped with a $661 “failure to pay on time” penalty and a month of IRS hold music.

Why This Matters to Practice Owners

Optometry clinics still cut paper checks for frame vendors, labs, maybe even quarterly taxes. One stray pen stroke can turn an easy task into a migraine. IRS automation isn’t always your friend. If the spelled-out amount is wrong, the payment system might no cross-check it with your return and no one’s proofreading in the mail room. So if the payment processing team never sees the tax return backup, errors slip straight through the system.

Key takeaways for doctors who would rather be seeing patients than seeing penalties
  • Ditch paper, go digital. Use IRS Direct Pay or EFTPS for estimates. The systems give you an immediate confirmation number and a clear audit trail.
  • Reconcile before you transmit. Whether you e‑pay or still insist on parchment, match the amount against your year‑to‑date QuickBooks file and make a PDF copy of anything you send.
  • Build a margin of safety. Keep at least one payroll cycle of cash in the tax account so a surprise draft, right or wrong, doesn’t choke your operating funds.
  • Know your escalation path. When the IRS phones ring forever, a practitioner’s best friend is a CPA with a Priority Practitioner line and a willingness to fax. Yes, still fax.
Practical steps you can adopt this quarter
  1. Flip the switch to electronic payments for federal and state estimates. We’ll walk your team through the EFTPS setup and store the credentials in a secure vault.
  2. Add a “two‑person review” rule for any manual checks over $5,000 including owner draws, so no one signs off half‑awake after a 12‑hour clinic day.
  3. Schedule an IRS account transcript pull every January. It confirms what the Service thinks you’ve paid and flags misapplied checks before interest starts compounding.
  4. Automate the cash sweep from operating to “Tax Alley” on each payroll run. You’ll never stare at a balance sheet on April 14 wondering where the money went.

The Williams Group Angle

We help optometrists stay profitable, generous, and out of the penalty box. Our bookkeeping platform matches deposits, estimates cash tax exposure in real-time, and pushes alert emails when something looks off. No six‑hour hold music required.

If you want that kind of calm in your practice finances, schedule a 30‑minute call. Let’s tighten the blind spots in your payment workflow. Because blurry numbers are just as dangerous as blurry vision.

This information was inspired by a report originally published by Yahoo Finance, highlighting a real-life tax payment error and its costly consequences. While this article is written in our words for clarity and relevance to optometry practices, all technical details and reporting were sourced.

Get optometry-specific tax support by scheduling a call with Brad Rourke, CPA, ABV or learn more about our accounting and tax services specific for ODs on our website.  

Ryan Poirier

Certified Public Accountant
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IRS Payment Processing Glitch: What It Means for Your Practice and Your Blood Pressure

The short version: The IRS admits it is running late logging some electronic tax payments. As a result, perfectly compliant taxpayers are getting CP14 “balance-due” letters that claim they never paid. The agency says penalties and interest will be wiped away once the payments post, but you need to keep your cool and your proof of payment, until the electronic dust settles.

What exactly broke?

On June 12, the IRS issued a public statement acknowledging “a delay in processing some electronic payments.” Payments left your bank, but they are sitting in limbo inside the IRS mainframe. A notice may have been generated before the payment hit your account or the payment landed with data errors that need manual fixing.

Real-world fallout

Taxpayers from South Dakota to Chicago have opened their mailboxes to find fresh bills for taxes they already paid. One couple told CBS News the experience triggered a near panic attack—and a two-hour phone hold that ended with a dial-tone goodbye. cbsnews.com

Who is most likely to see a bogus notice?

  • Anyone who used Direct Pay or EFTPS on or near the April 15 deadline.
  • Married-filing-joint taxpayers when the second spouse made the payment through an IRS Online Account (the system has a history of dropping these payments).
  • Trusts that recently received CP161 notices for missing estimated taxes. The IRS called this last one a “programmer error.”

What the IRS wants you to do

  1. Do not pay again. Check your online account first.
  2. Monitor your account until July 15. If the payment still has not posted ten days before your CP14 response deadline, call the number on the notice.
  3. Skip the phone queue until then; the IRS says no call is needed unless the payment remains missing after mid-July.

Smart moves for practice owners

  • Screenshot everything. Save the confirmation number from Direct Pay, your bank statement showing the debit, and the CP14 itself.
  • Set a calendar reminder for July 5 to check your IRS account again.
  • Keep cash handy. If the payment never posts, you may need to re-pay to stop interest from compounding.
  • Delegate the headache. Give your CPA (hi, that’s us) a power of attorney so we can chase the IRS for you while you stay focused on patients instead of phone menus.

The bigger picture

The Taxpayer Advocate Service notes that IRS backlogs and staffing gaps are fueling these glitches. In plain English: the system is straining, and you are the spare part. Knowing your rights and keeping impeccable payment records is the best defense until the agency catches up

While this IRS glitch is frustrating, it doesn’t have to derail your peace of mind or your practice. Stay calm, stay documented, and don’t go it alone. Whether it’s resolving notices, monitoring payment status, or preventing future tax headaches, having an optometry-specific CPA in your corner can make all the difference.

We’re here to advocate, investigate, and help you stay financially focused, even when the IRS can’t.

This information is based on official updates and public notices from IRS.gov and related media coverage as of June 2025. While this article is written in our own words for clarity and relevance to optometry practices, all technical details and reporting were sourced from trusted government communications.

Get optometry-specific tax support by scheduling a call with Brad Rourke, CPA, ABV or learn more about our accounting and tax services specific for ODs on our website.  

Ryan Poirier

Certified Public Accountant
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Running a thriving optometry practice requires more than just providing excellent patient care. Managing overhead, investing in new equipment, and navigating ever-changing tax laws can significantly impact your bottom line. While many optometrists focus on growing revenue, few pay close attention to tax strategy—an oversight that can cost thousands in unnecessary taxes every single year.

Yes, you read that right. By unknowingly overpaying the IRS, successful practice owners miss out on tens of thousands of dollars in legal tax savings—money that could be reinvested into their business, retirement, or personal wealth.

The good news? With the right planning, you can legally reduce your tax burden and keep more of your hard-earned money.

In this article, we’ll cover the three most common and costly tax mistakes optometrists make—and how avoiding them could put six figures back in your pocket over the next few years. Whether you’re an established practice owner or just starting out, these insights can make a significant difference in your financial future. Let’s dive in.

Mistake #1: Paying Yourself the Wrong Salary in an S-Corp

One of the biggest financial missteps successful optometrists make is how they pay themselves. Many practice owners structure their business as an S-Corporation (S-Corp) to take advantage of tax savings, but without a strategic compensation plan, they end up overpaying in payroll taxes—or worse, attracting IRS scrutiny.

Why Your Salary Matters in an S-Corp

As an S-Corp owner, you don’t receive a traditional paycheck like an associate optometrist would. Instead, you’re both the business owner and an employee of your own corporation. This means your income is split into two parts:

^

Salary - This is your W-2 income, subject to payroll taxes (Social Security and Medicare).

^

Distributions - The remainder of your profits, which are not subject to payroll taxes.

The key to tax efficiency is striking the right balance. Paying yourself too much in salary means you’re overpaying in payroll taxes, while paying yourself too little increases your risk of an IRS audit.

The Cost of Overpaying Your Salary

Many optometrists set their salary arbitrarily high—often out of caution or habit—without realizing the tax implications. Let’s look at an example:

^

Dr. Smith, an optometrist, earns $300,000 from her S-Corp.

^

She decides to take a $200,000 salary, leaving $100,000 in distributions.

^

Payroll taxes (Social Security + Medicare) on her salary total $18,840.

Now, what if she adjusted her salary to a more reasonable $90,000, supported by industry benchmarks?

  • Her new payroll tax liability would drop to $6,885, saving her $11,955 in Social Security taxes.
  • She also avoids $5,800 in excess Medicare tax, bringing her total tax savings to $17,755 per year.

This Doesn’t Reduce Your Take-Home Pay

A common misconception is that lowering your salary means taking home less money. That’s not the case. Dr. Smith still earns $300,000 per year, but instead of taking it mostly as taxable wages, she shifts more of it into S-Corp distributions, which aren’t subject to payroll taxes.

She can still pay herself weekly or biweekly distributions, just like a paycheck. The only difference? She’s keeping more of her money rather than giving it to the IRS.

How Low is Too Low? The IRS Rule on “Reasonable Compensation”

Of course, you can’t just pay yourself a tiny salary to maximize tax-free distributions. The IRS requires S-Corp owners to take a “reasonable salary” based on industry standards, qualifications, and the services you perform. The challenge? The IRS doesn’t define a precise formula for what’s “reasonable,” but they do look at factors such as:

  • Your experience and role in the business
  • How much similar optometrists are paid in the marketplace
  • Your practice’s revenue and profits
  • Time spent on patient care vs. administrative work

Failing to meet this standard could result in an IRS audit, where they could reclassify your distributions as wages, forcing you to pay back payroll taxes (plus penalties and interest).

Most optometrists don’t have the time or the tools to determine their optimal salary strategy—and that’s where a tax expert comes in.

Mistake #2: Missing Out on Key Business Deductions

Many optometrists unknowingly overpay the IRS every year simply because they don’t take full advantage of available business deductions. Between patient care, managing staff, and growing their practice, tax strategy often takes a backseat—leading to missed opportunities to legally lower their tax bill.

The tax code is designed to benefit business owners, but only if they know what to deduct and how to do it correctly. The reality is, most optometrists are leaving thousands of dollars on the table.

The Most Overlooked Deductions for Optometrists

While standard expenses like office rent and utilities are obvious deductions, many optometrists fail to maximize tax-saving opportunities in these key areas:

1. The Home Office Deduction & The Augusta Rule

If you handle administrative work from home—whether it’s reviewing financials, scheduling, or managing payroll—you may be eligible for the home office deduction. Even if you have a separate office space, you can still deduct a portion of your rent or mortgage, utilities, and internet costs if you use a dedicated space for business.

Potential Savings: Optometrists with a qualifying home office typically deduct between $2,500 and $5,000 per year.

But what if you could legally pay yourself for using your home to host business meetings? There’s a little-known strategy that allows business owners to rent their home to their business tax-free for up to 14 days per year. This means you could write off the expense at the business level without picking it up as income personally—a clean way to pull additional money out of the practice 100% tax-free.

2. Business Vehicle & Mileage Deductions

Many optometrists use their personal vehicle for business-related activities, such as attending industry conferences, visiting suppliers, or networking with other professionals. However, most fail to track mileage or deduct auto expenses, missing out on significant tax savings.

  • IRS Mileage Deduction (2025 Rate): $0.70 per mile
  • If you drive 10,000 business miles per year, that’s a $7,000 tax deduction—a real savings of around $2,100 or more, depending on your tax bracket.
  • Alternatively, if you lease or own a car used for business, you may be able to deduct a portion of your payment, insurance, gas, and maintenance instead.

3. Business Meals & Entertainment

If you take referral partners, vendors, or key staff members out for business-related meals, 50% of those expenses can be deducted. This includes:

  • Taking a local optometric group leader out for lunch
  • Business meals while traveling to conferences
  • Meals during practice planning sessions

Many optometrists either fail to track these expenses or hesitate to deduct them out of fear of IRS scrutiny. The key is proper documentation—saving receipts and noting who attended and the business purpose.

Potential Savings: A practice owner who spends $500 per month on business meals could deduct $3,000 per year, reducing their tax bill by roughly $900 (assuming a 30% tax rate).

4. Paying Your Children Through the Business

Another underutilized strategy? Hiring your children to work in your practice. If your children help with tasks such as:

  • Filing paperwork
  • Cleaning office spaces
  • Managing social media or marketing efforts

You can legally pay them for their work—and as long as their wages remain under the standard deduction threshold ($15,000 for 2025), they won’t owe federal income taxes. Plus, if your business is structured correctly, you may be able to avoid payroll taxes on their earnings as well.

This creates a win-win: You shift income out of your higher tax bracket, fund their college savings or investment accounts, and convert what might have been an allowance into a fully deductible business expense.

5. Retirement Contributions (SEP IRA, Solo 401(k), or Cash Balance Plans)

Optometrists often underfund their retirement accounts, missing out on one of the most powerful tax deductions available. Unlike regular employees, business owners can set up tax-advantaged retirement plans that allow for much larger contributions—and major tax savings.

  • A Solo 401(k) or SEP IRA allows up to $69,000 in contributions for 2025 (depending on income).
  • A Cash Balance Plan could allow $100,000+ in contributions, providing massive tax deferral opportunities.
  • Every dollar contributed lowers taxable income, potentially reducing an optometrist’s tax bill by $20,000 or more per year.
How Much Are You Leaving on the Table?

By not taking full advantage of these deductions, an optometrist could be overpaying the IRS by $30,000 or more annually—money that could be reinvested in the practice, retirement, or personal wealth.

The problem isn’t that these deductions aren’t available. It’s that most optometrists either don’t know about them or don’t track them properly. That’s where working with a tax expert can make all the difference.

Mistake #3: Failing to Maximize Depreciation on Equipment & Office Buildout

Running an optometry practice isn’t cheap. Between diagnostic equipment, office furniture, and leasehold improvements, practice owners often spend hundreds of thousands of dollars just to keep their office up to date. The good news? The IRS allows you to deduct these costs over time. The bad news? Most optometrists don’t realize they could be deducting much more, much faster.

The Depreciation Trap: Why Most Optometrists Pay More Than They Should

When you buy new equipment—whether it’s an OCT, an autorefractor, or a retinal imaging system—the IRS typically expects you to spread out the deduction over 5 to 7 years. If you renovate your office, those costs might be spread over 15 or even 39 years.

That’s a long time to wait for your tax savings. But here’s the thing: You don’t have to wait.

How Smart Practice Owners Cut Their Tax Bill

There are tax strategies available right now that allow you to deduct more of these expenses upfront, reducing your tax bill significantly in the year you make the investment.

For example, instead of slowly writing off a $150,000 equipment purchase over several years, an optometrist could potentially deduct $90,000 or more immediately—saving $27,000 or more in taxes this year alone.

The same goes for office renovations and leasehold improvements. Many optometrists think they have to depreciate these expenses over decades when, in reality, there are legal ways to unlock tens of thousands of dollars in deductions much sooner.

How Much Are You Leaving on the Table?

If you’ve recently bought equipment, upgraded your office, or are planning a build out soon, there’s a good chance you could be saving $30,000–$50,000 (or more) in taxes this year—if you structure things correctly.

The problem? The IRS doesn’t make it easy. Depreciation rules are complicated, and most optometrists either don’t know their options or aren’t using them to their full advantage. That’s where expert guidance makes all the difference.

Stop Overpaying the IRS—It’s Time to Take Control of Your Taxes

If you’ve been making one (or more) of these tax mistakes, you’re not alone. Even the most successful optometrists unknowingly leave tens of thousands of dollars on the table every year—simply because they don’t have the right strategy in place.

A smart tax plan isn’t just about compliance—it’s about keeping more of what you earn so you can reinvest in your practice, your future, and your financial security. With the right approach, you could:

^

Lower your payroll taxes without changing your take-home pay

^

Maximize deductions you're already eligible for

^

Accelerate depreciation and free up cash for your business

^

Legally reduce your tax burden - year after year

The key is knowing exactly which strategies apply to your situation – and that’s where expert guidance makes all the difference.

The best tax strategies don’t happen by accident. If you want to stop overpaying in taxes and keep more of your hard-earned money, let’s talk.

Schedule a call today and let’s create a tax plan that works for you.

Schedule Call

Ryan Poirier

Certified Public Accountant
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Best Practices for Having Your Children on Your Payroll

As optometry practice owners, finding innovative ways to optimize operations and finances is always on the agenda. One effective strategy is incorporating your children into your business workforce. This approach not only provides potential tax benefits but also imparts valuable life skills to your children. In this guide, we will delve into the best practices for having your children on payroll, focusing on legal compliance, appropriate tasks, fair compensation, and essential record-keeping.

Understanding Age-Appropriate Work

Before assigning tasks to your children, ensure that these tasks are suitable for their age:

  • For Young Children (Ages 5-12): Simple office tasks like filing, shredding, or basic cleaning.
  • For Teenagers (Ages 13-17): More complex roles such as assisting with administrative duties, managing social media accounts, or participating in community outreach initiatives.

Always tailor tasks to align with both their capabilities and the needs of your practice.

Ensuring Fair Compensation

Paying your children a fair wage is crucial. Here’s how you can ensure compliance and fairness:

  • Market Rate Compensation: Pay rates should align with what you would pay an unrelated employee for the same job.
  • Consistent Paychecks: Regularly scheduled payments via check or direct deposit help formalize the employment relationship.

Maintaining Accurate Records

Record-keeping is not just a best practice; it’s a necessity:

  • Detailed Logs: Keep a detailed record of hours worked and tasks performed.
  • Formal Documentation: Ensure all work is documented through timesheets or a digital tracking system.

This documentation is essential for tax purposes and validates the employment as a legitimate business arrangement.

Aligning Work with Business Operations

The work your children do should directly relate to your practice’s operations. Avoid assigning household chores as part of their job duties, and instead focus on tasks that contribute to your business goals.

Handling Employment Paperwork

Compliance with federal employment laws is non-negotiable:

  • W-4 and I-9 Forms: Complete these forms to document your child’s eligibility to work and handle tax withholdings correctly.
  • Setting Up a Bank Account: A bank account in your child’s name not only teaches financial responsibility but also aids in transparent financial practices.

Exploring the Benefits of Child Employment

Employing your child can lead to significant financial and educational benefits:

Tax Advantages:
  • Income Shifting: Transfer income from your higher tax bracket to your child’s lower one.
  • Tax Savings: Potentially reduce the amount of taxes owed by taking advantage of lower tax brackets.
Financial Education:
  • Early Financial Literacy: Introduce concepts of earning, saving, and responsible spending.
  • Roth IRA Contributions: Enable them to start a Roth IRA, fostering early habits of savings and investment.

Understanding Tax Implications

  • No Withholdings Necessary: If your child earns less than the standard deduction, you may not need to withhold taxes.
  • Exemption from Certain Taxes: If your practice is a family-owned partnership, your child’s earnings might be exempt from Social Security, Medicare, and FUTA taxes.

Integrating your children into your optometry practice is not just a financial decision but a strategic move that can benefit your family in multiple ways. From teaching valuable work ethics to securing tax benefits, the advantages are manifold. However, it’s essential to maintain a professional approach, ensuring all legal requirements are met. For tailored advice, always consult with a tax professional or accountant knowledgeable about optometry practices.

By following these guidelines, you can optimize your family’s financial situation while providing a practical learning experience for your children within your business.

Stay ahead of your tax planning by scheduling a call with Brad Rourke, CPA, ABV or learn more about optometry-specific accounting and tax on our website.  

Archie Keebler

Tax Manager
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Keeping You Updated on Tax Changes for 2025

At Williams Group, we’re committed to keeping you informed about key tax changes that can impact your financial planning and your optometry practice. As we look ahead to 2025, here are two important updates we’d like to highlight from the SECURE 2.0 Act of 2022 and the IRS mileage rate adjustment.

Enhanced Catch-Up Contributions: More Savings for Older Employees

Starting in 2025, employees aged 60 to 63 can take advantage of increased catch-up contributions for their 401(k) or 403(b) retirement plans. The maximum catch-up contribution for this group will rise to $11,250, compared to the current $7,500 limit. This adjustment acknowledges the critical need for individuals nearing retirement to bolster their savings during their highest earning years.

Additionally, here are the contribution limits for 2025 across various retirement accounts:

  • 401(k): $23,000, with an additional $11,250 catch-up contribution for those aged 60-63.
  • SIMPLE IRA: $17,000, with a catch-up contribution of $5,500 for participants aged 50 and older.
  • Traditional and Roth IRAs: $7,000, with a $1,000 catch-up contribution for participants aged 50 and older.
  • Health Savings Accounts (HSAs): $4,150 for individuals and $8,300 for families, with a $1,000 catch-up contribution for account holders aged 55 and older.

For employers, this presents an opportunity to reinforce employee loyalty and financial well-being. Highlighting these increased contribution limits during employee discussions or benefits meetings can foster a culture of financial security within your practice. Additionally, contributions made by employees not only enhance their retirement readiness but also allow for potential tax deferrals, benefiting both employees and the practice.

Automatic Enrollment: Setting Employees Up for Success

Another notable provision of SECURE 2.0 is the mandatory automatic enrollment requirement for new 401(k) and 403(b) plans established after December 29, 2022. Starting in the 2025 plan year, employers must automatically enroll eligible employees into their retirement plans unless the employee opts out. The initial deferral rate must be at least 3%, increasing annually by 1% until it reaches a minimum of 10%, but no more than 15%.

This automatic enrollment provision is a game-changer for employee participation rates, ensuring that more individuals take proactive steps toward building their retirement savings. For practice owners, it simplifies plan administration and promotes a forward-thinking benefits package that can attract and retain top talent. While automatic enrollment may require some initial setup and communication, it ultimately helps employees achieve financial security with minimal effort on their part.

IRS Mileage Rate for 2025: Plan for Reimbursements

The IRS has announced that the standard mileage rate for 2025 will be 70 cents per mile. This represents an important update for businesses that reimburse employees for work-related travel. Properly tracking and reimbursing mileage at the correct rate not only keeps your practice compliant but also ensures fair compensation for your employees.

Key Takeaways for Practice Owners

These tax updates are more than just regulatory changes; they’re opportunities for your practice to:

  • Support Employee Financial Wellness: The enhanced catch-up contributions and automatic enrollment features ensure employees are set up for long-term success.
  • Boost Recruitment and Retention: Offering robust retirement plans makes your practice more competitive in the job market.
  • Maintain Compliance: Adhering to new rules, like the automatic enrollment mandate, safeguards your practice from potential penalties.
  • Optimize Tax Benefits: Retirement plan contributions, both from employees and employers, come with potential tax advantages that can reduce the overall tax burden.

Stay Ahead with Williams Group

Staying informed and proactive about tax and retirement plan changes is essential for navigating the evolving financial landscape. Whether you’re updating your mileage reimbursement policies or implementing new retirement plan features, working closely with our team can ensure you’re maximizing opportunities for your practice and employees. 

If you’re ready to discuss how these 2025 updates can impact your optometry practice, or if you need guidance on integrating these provisions into your financial strategy, contact Williams Group today. Together, we can build a stronger financial future for your practice and your team.

Stay ahead of your tax planning by scheduling a call with Brad Rourke, CPA, ABV or learn more about optometry-specific accounting and tax on our website.  

Archie Keebler

Tax Manager
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Ryan Poirier

Certified Public Accountant
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