16 Best Tax Deductions for Optometrists

Optometry practices have access to a variety of tax deductions that reduce their overall tax burden. Understanding which expenses qualify allows practice owners to manage finances strategically and remain compliant with IRS rules. Knowing which deductions are available will help optometrists plan effectively and optimize their practice’s profits.

1. Office and Facility Expenses

Optometry practices can deduct rent, mortgage interest, property taxes, and necessary utilities. Utilities include electricity, water, gas, internet services, and business-related phone or mobile service. These are ordinary business expenses that are directly tied to running the practice.

2. Home Office Deduction

Optometrists are allowed to deduct expenses for a home office used exclusively for administrative work. This includes a portion of the home's rent or mortgage, utilities, and internet fees. The space must be used regularly for business tasks such as scheduling, billing, or bookkeeping. 

Accurate calculation of home office expenses is essential for IRS compliance. Consulting with a medical practice accounting professional helps you ensure that home office deductions are calculated and recorded correctly.

3. Qualified Business Income Deduction

Starting in 2026, the Qualified Business Income (QBI) deduction increases to 23% and becomes permanent. Pass-through optometry practices must have at least 75% of gross receipts from their services to qualify. A tax professional will help you ensure that all QBI eligibility requirements are met.

4. Business Insurance

Optometry practices should deduct premiums for business insurance, including liability and malpractice coverage. This applies to any insurance necessary to protect the practice and its operations. 

5. Business Loan Interest

Interest paid on business loans used for practice expansion, equipment purchases, or startup costs is deductible. Only the interest portion qualifies, not the principal. Proper documentation of loan terms and payments made is required.

6. Employee-Related Expenses

Optometry practices can deduct salaries, wages, and bonuses paid to employees. Payroll taxes and Medicare taxes are also deductible. Practices are allowed to deduct overtime pay for employees up to $12,500 per employee each year from 2025 through 2028. Employee benefits, including fringe benefits and cafeteria plans, are also tax-deductible. 

7. Health Insurance and Retirement Contributions

Optometrists can deduct health insurance premiums for themselves and their employees. Contributions to Health Savings Accounts (HSAs) are also deductible. Retirement plan contributions, such as 401(k) or SEP IRA, lower taxable income for the practice. These deductions support employee benefits while managing practice taxes. 

8. Large Equipment Purchases 

Large equipment purchased for an optometry practice is deducted using depreciation methods. This includes diagnostic devices, exam chairs, waiting room furniture, office equipment, and vision testing tools. 

Depreciation spreads the deduction across the asset’s useful life. Several IRS-approved methods exist. A professional who is experienced in tax planning strategies for optometrists will help you select the best depreciation method for each asset.

Section 179 Deduction

Section 179 lets optometry practices expense the full cost of qualifying equipment in the year of purchase. The 2026 limit is $2,560,000 and phases out when total equipment purchases exceed $4,090,000. Practices elect Section 179 and choose which assets to expense. This gives direct control over first-year deductions.

Bonus Depreciation 

Optometry practices are also able to claim 100% bonus depreciation on qualifying equipment in the year it's placed in service. The 2025 One Big Beautiful Bill restored full bonus depreciation permanently, applying to new and used property. Bonus depreciation automatically applies to eligible assets not claimed under Section 179. Using both methods maximizes tax savings.

9. Small Equipment

Small equipment in an optometry office is usually deducted in the year of purchase. This includes low-cost tools and devices used for daily operations that have a useful life of more than one year. These items remain depreciable assets under IRS rules. 

Many practices expense small equipment immediately, using the de minimis safe harbor election for amounts under $2,500 per invoice or item. Items not eligible for safe harbor are capitalized and deducted using Section 179 or bonus depreciation. Proper classification determines how and when the deduction is taken. 

10. Software and Practice Management Subscriptions

Optometrists can deduct software and digital tools used in practice operations. This includes practice management systems, scheduling platforms, billing software, and electronic record systems. Cloud subscriptions, security software, and bookkeeping tools also qualify.

Off-the-shelf software that is publicly available and not substantially modified is deductible immediately using Section 179 or bonus depreciation. Highly customized software is treated as an intangible asset and is amortized over 36 months under IRS Section 197 [§ 1.197-2 (c)(4)]. 

11. Supplies 

Optometry practices are allowed to deduct supplies used in daily operations. This includes clinical supplies like lenses, disinfectants, gloves, masks, and testing materials, as well as office supplies such as paper, printer ink, and administrative materials. These costs are expensed in the year the supplies are purchased.

12. Business Vehicle and Travel Expenses

Vehicle expenses for business use, including mileage, fuel, maintenance, repairs, and insurance, are deductible. Travel costs for business meetings, client visits, or practice-related errands are also deductible. There are two methods: the standard mileage rate or actual expenses.

Maintaining accurate records of dates, purpose, and costs is essential for claiming this deduction. Learning how to write off business car expenses correctly helps practices claim full benefits while staying compliant with IRS rules.

13. Marketing and Advertising Expenses

Optometry practices can deduct marketing and advertising costs that help attract new patients and grow the practice. This includes website development, online and print ads, local promotional campaigns, social media marketing, email campaigns, and directory listings. Branding costs, such as logo design and promotional materials, are also deductible. 

14. Professional Memberships and Licensing Fees

Expenses for professional memberships, licensing, and certifications required to operate are deductible expenses for optometry practices. This includes state licensing fees, board certifications, and subscriptions to professional associations. 

Membership dues for industry organizations and continuing education societies also qualify. These costs maintain compliance, support professional development, and ensure the practice meets regulatory requirements.

15. Continuing Education and Professional Development

Continuing education, including course fees, seminars, and related travel, is deductible under IRS rules. This includes conferences or workshops that maintain or improve professional skills. Deductible costs also cover materials, registration, and lodging for business-related learning. These deductions support ongoing staff development and practice growth.

16. Bad Debts

Bad debts in the form of unpaid patient balances can be deducted. This includes amounts billed for services that are unlikely to be collected. Only amounts previously included in income are eligible. Deducting bad debts ensures net revenue is reported accurately. Proper documentation of the patient’s account and collection efforts is required.

FAQs

Are there tax advantages to leasing equipment for an optometry practice?

Yes, there are tax advantages of leasing equipment for an optometry practice when the lease is classified correctly. Operating lease payments are deducted as current business expenses in the year they are paid. Capital leases are treated as asset purchases and follow depreciation, Section 179, or bonus depreciation rules.

How long should optometrists keep tax deduction records?

Optometrists should keep tax deduction records for at least three to seven years, depending on the record type. Proper documentation supports deductions and protects the practice in case of an IRS audit. 

Plan to Maximize Your Deductions Now

Effective tax planning for optometry practices turns deductions into a coordinated strategy rather than isolated write-offs. Timing equipment purchases, selecting the right depreciation methods, and tracking deductible expenses ensure the practice maximizes tax deductions while complying with IRS rules.

Coordinating Section 179, bonus depreciation, employee benefits, and other deductions with overall practice cash flow improves financial outcomes and reduces surprises at tax time. Consult with a tax professional to strengthen your tax strategy planning and ensure all eligible deductions are captured accurately.