STRATEGIES FOR DOCTORS & PHYSICIANS
Tax Strategies for Doctors & Physicians
High income, high student debt, and CPAs who don't specialize in physician finances. Time to fix that.
Physicians face a distinct tax profile: very high W-2 or practice income ($300K-$800K+), often with limited equity compensation, significant student loan debt, and practice expenses. The combination of high marginal rates, NIIT exposure, and the SSTB limitations on the QBI deduction creates challenges, but also significant opportunity. Many physicians are under-advised because their CPAs treat them like any other high earner rather than optimizing for physician-specific situations.
Common mistakes doctors & physicians make
- Not maximizing retirement contributions across all available vehicles
- Missing the backdoor Roth because income exceeds direct contribution limits
- Practice structured as sole proprietorship instead of S-corp (paying excess SE tax)
- Not using an HSA as a stealth retirement account
- Student loan repayment not coordinated with tax strategy
8 strategies for doctors & physicians
Retirement
Backdoor Roth IRA
$7,000-$14,000
estimated annual savings
Retirement
Mega Backdoor Roth
$23,500-$46,000
estimated annual savings
Retirement
Health Savings Account (HSA) Strategy
$2,000-$5,000
estimated annual savings
Business
S-Corp Election
$5,000-$30,000
estimated annual savings
Family
Dependent Care FSA
$1,500-$3,000
estimated annual savings
Planning
Estimated Tax Payment Optimization
$2,000-$10,000
estimated annual savings
Charitable
Donor-Advised Fund
$5,000-$40,000
estimated annual savings
Investment
Net Investment Income Tax (NIIT) Planning
$3,000-$20,000
estimated annual savings
See your physician-specific savings
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Frequently Asked Questions
Can doctors use the QBI deduction?
Medicine is classified as a Specified Service Trade or Business (SSTB). If your taxable income is below $191,950 (single) or $383,900 (married), the full 20% deduction applies. Above that, it phases out completely. Many physician-owned practices have income above the threshold, so the QBI deduction may not be available.
Should my medical practice be an S-corp?
If your practice net income exceeds $80K, likely yes. An S-corp election lets you split income into salary (subject to payroll tax) and distributions (not subject to payroll tax). For a physician earning $400K through a practice, this can save $15K-$25K annually in payroll taxes.
What retirement accounts should I prioritize?
In order: (1) Max employer 401(k), $23,500. (2) Backdoor Roth IRA, $7,000. (3) HSA if available, $8,550 family. (4) Mega backdoor Roth if employer allows. (5) Consider a defined benefit plan for very high practice income ($200K+ annual deduction).