Setting the sweep percentage from your own numbers

How much of each deposit belongs to tax?

Nobody publishes the number, and the IRS least of all. The share of a cash-pay deposit that belongs to tax depends on the practice's own margin, filing status, deductions and state, so any single percentage circulating as a rule of thumb is somebody else's arithmetic. What the federal government does publish is every rate that goes into building one.

Two federal taxes come out of the same profit. Self-employment tax takes 15.3 percent, being 12.4 percent for Social Security and 2.9 percent for Medicare, and it is generally computed on 92.35 percent of net earnings from self-employment rather than on all of them 1Ref 1Internal Revenue Service (2026).Topic no. 554, Self-employment tax.The 15.3 percent combined self-employment tax rate, its split into 12.4 percent Social Security and 2.9 percent Medicare, and the 92.35 percent of net self-employment earnings the rate is generally figured on.. Federal income tax then lands on taxable income at whatever bracket the household reaches. One sweep has to carry both.

A W-2 job hid this, because the employer withheld on every check and sent the money in. Self-employment income arrives with nothing withheld, which is what moves an owner into the estimated tax system, where the quarterly payments cover income tax and self-employment tax together 2Ref 2Internal Revenue Service (2026).Publication 505 (2026), Tax Withholding and Estimated Tax.That self-employment income arrives with no withholding attached, which places a solo cash-pay owner in the estimated tax system, and that those payments cover self-employment tax as well as income tax..

Then there is the state, which is where any national percentage stops being useful: state income tax is set state by state, the brackets and the estimated-payment rules differ, and some states impose no individual income tax at all.

The federal layers the sweep has to cover

Four layers, and they stack on different bases. Self-employment tax hits net earnings before the income-tax deductions are taken; income tax hits taxable income after them. The Social Security piece stops at a ceiling that moves every year, while the Medicare piece has no ceiling and picks up a surtax higher up. Reading the layers apart from each other is what keeps a sweep percentage from being a guess.

The floor is low. Schedule SE gets filed once net earnings from self-employment reach $400, and for 2025 only the first $176,100 of self-employment income, counted together with any wages, fell under the Social Security portion 3Ref 3Internal Revenue Service (2025).2025 Instructions for Schedule SE (Form 1040).The $400 net-earnings threshold that requires Schedule SE, and the 2025 Social Security wage base of $176,100 above which the Social Security portion stops applying.. That ceiling is reset annually: for 2026 the base is $184,500 4Ref 4Internal Revenue Service (2026).Form 1040-ES (2026), Estimated Tax for Individuals.The 2026 Social Security wage base of $184,500, the $1,000-or-more-owed test for making estimated payments, the smaller-of-90-percent-current-year-or-100-percent-prior-year safe harbor, and the 110 percent substitution where prior-year AGI exceeded $150,000 ($75,000 married filing separately)..

Above the base the 12.4 percent stops and the 2.9 percent keeps going, so the dollars a practice earns late in a strong year carry a lighter sweep than the ones it earned in March. Higher up, a further 0.9 percent begins. The Additional Medicare Tax reaches self-employment income above $200,000 for a single filer, $250,000 married filing jointly and $125,000 married filing separately, and the IRS notes those thresholds are not indexed for inflation 5Ref 5Internal Revenue Service (2025).Instructions for Form 8959 (2025), Additional Medicare Tax.The 0.9 percent Additional Medicare Tax and its filing-status thresholds of $200,000, $250,000 and $125,000, which the instructions note are not indexed for inflation..

Build the percentage from last year's return

Divide last year by last year. Take the total tax the practice paid, federal and state together, and divide it by what the practice collected in the same twelve months. The quotient is the share of every dollar that was spoken for before it arrived. A practice that collected $180,000 and finished the year owing $43,000 in combined tax was sweeping just under 24 percent, a number that came from its own return.

The ratio works because last year's return already settled everything inside it: the self-employment tax, the bracket, the deductions taken, the state. It holds only while the practice looks like the practice that filed that return.

A first year has no such return, so the number gets built forward. Estimate net profit for the year, apply the self-employment tax rate to the portion of net earnings it reaches, add federal income tax at the bracket the household expects, add a state figure from the state revenue department's own rate schedule, then divide the total by the collections the year is expected to produce. That result carries wide error bars and is worth revisiting after one full quarter of real deposits.

A sweep percentage and a tax rate are different animals. Tax is owed on profit, while the sweep comes off collections, and the gap between the two is every dollar the practice spends on rent, software, malpractice coverage and supplies. A practice keeping more than half of collections as profit and one keeping under a third can face identical tax rates and still need very different sweep percentages. That is why the number moves when your fee schedule moves, and why the price floor is the same arithmetic read from the other end: one asks what a visit has to collect, the other asks how much of the collection was never available to spend.

What the deduction side does to the number

Deductions pull the income-tax layer down before the sweep has to cover it. One of the largest available to a practice with no employees is the qualified business income deduction, which lets eligible taxpayers, sole proprietors and S-corporation shareholders among them, deduct up to 20 percent of qualified business income before figuring the tax owed on that income 6Ref 6Internal Revenue Service (2026).Qualified Business Income Deduction.That eligible taxpayers, including sole proprietors and S-corporation shareholders, may deduct up to 20 percent of qualified business income before figuring the tax owed on that income.. A sweep built as though it did not exist overshoots, and the money sits idle until the return.

Clinical work sits in the category where that deduction runs out. The Form 8995-A instructions name physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists and other similar healthcare professionals as a specified service trade or business, and for 2025 the deduction is fully available below $197,300 of taxable income, or $394,600 married filing jointly, phases out through $247,300 and $494,600, and is unavailable above those figures 7Ref 7Internal Revenue Service (2025).Instructions for Form 8995-A (2025), Deduction for Qualified Business Income.That a clinical practice is a specified service trade or business, and the 2025 taxable-income range over which an SSTB's qualified business income deduction phases out..

A practice on track for its best year can cross that range mid-year, and the sweep percentage rises as it does. Ask the CPA where the phase-out starts for the household's filing status before the fourth-quarter payment, not after the return is drafted.

The state layer, and how to find yours

No national figure covers it. State income tax is set by each state: the rate structure, the treatment of business income, the estimated-payment schedule and the due dates all differ, and some states impose no individual income tax on this income at all. A few cities and counties add their own. The lookup is the same everywhere, though: the state revenue or taxation department publishes an estimated income tax page carrying the year's forms and payment schedule.

Two questions belong to that page before the first payment goes out. Whether the state wants its own estimated payments on a schedule that differs from the federal one, and whether anything is owed to a city or county on top, which commonly sits with the local finance department instead.

A practice that sees patients in more than one state, or that moved during the year, has a third question about which state gets the income, and that is one to take to a CPA rather than to a search engine.

Paying it out: the $1,000 test and the safe harbor

The sweep is savings; the estimated payment is the transaction. A solo owner generally has to make estimated payments once they expect to owe at least $1,000 for the year after withholding and refundable credits, and the underpayment penalty is avoided by paying the smaller of 90 percent of the current year's tax or 100 percent of the tax on last year's full twelve-month return 4Ref 4Internal Revenue Service (2026).Form 1040-ES (2026), Estimated Tax for Individuals.The 2026 Social Security wage base of $184,500, the $1,000-or-more-owed test for making estimated payments, the smaller-of-90-percent-current-year-or-100-percent-prior-year safe harbor, and the 110 percent substitution where prior-year AGI exceeded $150,000 ($75,000 married filing separately).. Form 1040-ES carries the vouchers and the schedule.

That prior-year figure rises after a good year. Where prior-year AGI was more than $150,000, or $75,000 for a married taxpayer filing separately, the safe harbor substitutes 110 percent for 100 percent.

But the safe harbor protects against the penalty, not against the bill. A practice whose collections jump can be fully penalty-proof in December and still owe a large balance in April, which is the cash-flow event the sweep exists to prevent. Let the payments track whichever safe harbor is cheaper, and let the sweep percentage track the year the practice is having.

Where the money sits between deposit and payment

In a separate account, moved the day the deposit lands. A weekly or monthly sweep competes with rent and payroll for the same balance, and it loses often enough that many solo owners automate the transfer instead: a second business account at the same bank, and a standing rule that the sweep percentage leaves the operating account the moment a settlement posts.

Reconcile it monthly against what the year owes so far, and keep the sweep percentage on the solo dashboard with the other numbers that get read once a month. Two things make it drift, a change in collections and a change in expenses, and both appear in the practice's own books months before they appear on a return.

Recompute after any quarter that does not look like the one before it, and again in January, when the completed return produces a fresh ratio to sweep against.