Optometrists, CPA & Tax Services

Why Optometrists in Dallas Need a CPA Who Understands Optical Practice Finances

Optometry practices operate at the intersection of healthcare and retail, and that dual nature creates tax complexity most general CPAs miss. You bill insurance for exams, collect retail revenue on frames and lenses, carry physical inventory that shifts in value, and finance diagnostic equipment that can cost six figures. Each of these revenue streams and expenses follows different tax rules, and getting them wrong means overpaying the IRS or triggering an audit.

At AG Freideman, we work with optometrists across Dallas, Plano, Frisco, and the broader DFW metro who are tired of explaining their business model to accountants who treat them like a generic medical office. Al Freideman, a licensed CPA with over 30 years of experience, handles every optometry client personally. That means your CPA actually understands the difference between a VSP reimbursement and a cash-pay frame sale, and how each one should hit your books.

How Should Optometrists Handle Frame and Lens Inventory for Tax Purposes?

Your optical dispensary inventory is one of the largest deductions available to your practice, but only if it is tracked and reported correctly. The IRS requires practices with inventory to use an accounting method that clearly reflects income, and for most optometrists carrying $50,000 to $200,000 or more in frames and lenses, that means maintaining accurate cost-of-goods-sold (COGS) records that separate beginning inventory, purchases, and ending inventory each year.

Here is where practices lose money: if you are not conducting regular inventory counts (or your bookkeeper simply estimates ending inventory), your COGS calculation is wrong. That means you are either overstating income and paying too much in federal tax, or understating it and creating audit exposure. The IRS treats inventory discrepancies seriously, especially for businesses with a retail component.

• Section 471(c) simplified method: Practices meeting the IRS gross receipts test (averaging $30 million or less over three years, which covers nearly every optometry office) can use this simplified inventory method introduced under the Tax Cuts and Jobs Act. We evaluate whether this election saves you time and money compared to traditional inventory accounting.
• Obsolete and slow-moving stock: Frames that sit on your boards for 18 months lose value. We help you document write-downs for obsolete inventory so you capture that loss properly rather than carrying inflated asset values on your books.
• Vendor rebates and co-op credits: Luxottica, Marchon, and other major distributors offer volume rebates that technically reduce your inventory cost basis. If your bookkeeper is recording these as income instead of reducing COGS, your taxable income is overstated.

What Is the Right Way to Separate Retail Revenue from Exam Revenue?

The IRS and the Texas Comptroller treat your exam fees and your optical sales differently, and your books need to reflect that split clearly. Professional exam revenue (comprehensive eye exams, medical evaluations, contact lens fittings) is healthcare income. Frame and lens sales are retail transactions subject to Texas sales tax at rates up to 8.25% depending on your local jurisdiction in the DFW area.

Many optometrists bundle pricing or run everything through a single revenue account in QuickBooks. This creates two problems. First, you cannot accurately benchmark your practice’s profitability by service line. Second, you risk sales tax compliance errors with the Texas Comptroller. Texas requires that tangible personal property sold at retail (frames, lenses, contact lenses sold without a prescription fitting) be taxed appropriately. Prescription ophthalmic lenses and frames dispensed as part of a prescription are exempt, but the rules around what qualifies can be nuanced.

We set up your chart of accounts to separate these revenue streams from day one, so your monthly bookkeeping gives you real visibility into which side of your practice is driving profit and your sales tax filings are accurate.

How Can Optometrists Maximize Equipment Financing Deductions?

Diagnostic and refractive equipment represents a major capital investment for any optometry practice. An OCT machine, autorefractor, or digital retinal camera can cost $30,000 to $100,000 or more. The good news: the tax code offers powerful deductions if you structure the purchase or financing correctly.

• Section 179 expensing: For tax year 2026, Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it is placed in service, up to the annual limit (which has exceeded $1 million in recent years). This can eliminate a significant chunk of taxable income in the year you buy or finance new equipment.
• Bonus depreciation: Under the current phase-down schedule, bonus depreciation continues to decrease from 100% in prior years. We calculate whether Section 179, bonus depreciation, or a combination gives your practice the best tax outcome for 2026.
• Interest deduction on equipment loans: If you finance equipment rather than purchasing outright, the interest portion of your payments is deductible as a business expense. We ensure your loan amortization schedules are properly reflected on your books so you capture every dollar of deductible interest.
• Lease vs. buy analysis: Some optometrists lease equipment to preserve cash flow. We run the numbers on both scenarios, factoring in tax deductions, cash flow impact, and total cost of ownership, so you make the decision with real data.

Why Are Vision Plan Receivables a Tax Timing Problem?

If your practice accepts VSP, EyeMed, Davis Vision, or other managed vision plans, you deal with a constant gap between when you provide services and when you actually receive payment. This creates an accounts receivable balance that directly affects your taxable income depending on your accounting method.

Most optometry practices use the accrual method (required if your practice has inventory and does not qualify for the small business exception). Under accrual accounting, you recognize revenue when you provide the service or dispense the product, not when the vision plan finally pays you 30 to 90 days later. That means you could owe taxes on income you have not actually collected yet.

We manage this by tracking your vision plan receivables separately, reconciling them against EOBs (Explanation of Benefits), and identifying denied or underpaid claims before year-end. If a receivable becomes uncollectible, we ensure it is written off properly so you are not paying taxes on money you never received.

Common Optometry Tax Mistakes We Fix

After three decades of working with small business owners in Dallas, Al has seen the same costly mistakes show up in optometry practices over and over. Here are the ones we fix most often:

• Mixing personal and practice expenses on the same accounts. When your practice credit card also pays for personal purchases, your COGS and operating expense figures are unreliable. This is one of the top audit triggers for S-Corp and LLC owners.
• Failing to track cost basis on dispensary inventory accurately. Estimating ending inventory instead of performing physical counts leads to incorrect COGS, which directly over- or understates your taxable income.
• Missing the Texas Franchise Tax filing deadline. Every Texas LLC and corporation, including optometry practices structured as PLLCs or S-Corps, must file a franchise tax report and Public Information Report annually. The deadline is May 15, and penalties for late filing start at $50 per report. We handle this for $250 to $500 annually.
• Not separating taxable retail sales from exempt prescription sales for Texas sales tax. Filing errors with the Texas Comptroller can result in back-tax assessments plus penalties and interest. We review your sales tax classification quarterly.
• Ignoring S-Corp election benefits. Many optometrists operate as single-member LLCs and pay self-employment tax on their entire net income (15.3% on the first $168,600 for 2026). Electing S-Corp status and paying yourself a reasonable salary can save $10,000 or more per year in self-employment taxes. We evaluate whether this election makes sense for your revenue level and help you file IRS Form 2553.

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