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How a doctor is taxed depends on whether they are employed or self-employed, and the two are taxed very differently. If you run your own practice or pick up 1099 work, you are your own employer: you pay both halves of every payroll tax, on top of an entity structure you probably never chose deliberately. If you are employed on a W-2, automatic withholding makes the tax look handled, but the bill is still high and a salary leaves little to deduct.
What you can do about it depends on which situation you are in.
What matters most depends on how you are paid:
PLLC, private practice): the key is entity structure and self-employment tax. See Sole proprietor vs S-corp: what you pay below.
medical group): the key is using every tax-advantaged dollar the salary allows. See How employed physicians lower their tax below.
Doctor tax planning covers two tracks, set by how you are paid.
If you are self-employed:
Entity structure: sole proprietor, LLC, or S-corp, and what changes once you elect.
Self-employment tax, reduced by splitting income into a reasonable salary and distributions.
Retirement plans for the self-employed: solo 401(k), SEP, and cash balance plans that shelter far more than an employee’s 401(k).
Business deductions a practice or contractor qualifies for, documented so they hold.
If you are employed on a W-2:
A sole proprietor pays self-employment tax on all net profit; an S-corp owner pays it only on the salary drawn and takes the rest as distributions that are not subject to the tax. Set the salary too low and the IRS challenges it. The election is due within two months and 15 days of the start of the tax year, a deadline most people miss.
A hospital-employed physician cannot lower taxable income with business deductions the way a practice owner can. The savings come from using every tax-advantaged dollar the law allows, and most salaried earners never use all of it.
A full employer plan, a 457(b) where offered, a backdoor Roth each year, and a plan for side income save more together than any single deduction a W-2 earner could find. Above $252,000 of joint income in 2026 you cannot contribute to a Roth IRA directly, and between $242,000 and $252,000 the direct limit phases down, which is why the backdoor Roth exists. We plan around your full picture: salary, any 1099 income, and a spouse’s return, so the numbers reflect the real total.
we separate practice revenue, 1099 work, and any W-2, and review your entity and retirement setup.
for practice owners we run the numbers as a sole proprietor, an LLC, and an S-corp; for employed physicians we map the full employer-plan and Roth room, then show what each keeps.
we file the election if it pays, set the salary and estimates, and open the retirement plan that fits.
Whether you are employed or run your own practice, we will review last year’s return and show you what is still open for this year. Confidential, handled by a CPA.
Software files the return you hand it. It will not tell you the entity is wrong, the salary is off, that a cash balance plan would shelter six figures, or that you skipped a 457(b) your employer offers. Those are planning calls that have to happen before year-end. We hold your practice books and personal return together, so the structure matches your whole situation.
Doctors who plan ahead stop overpaying the IRS every quarter.
We had over a hundred clients this last tax season that were in the wrong business structure. And on average, they overpaid anywhere between a few thousand to even tens of thousands of dollars in tax just because they did not have the right business structure for themselves.
They handled my personal and now LLC taxes. Super detailed, thorough, and also efficient and expedient.” Joan, Google review
They recommended changes to my tax strategy which had a significant positive impact on my return this year.” Julie N., Google review
Fees depend on the work. A one-time entity switch costs the least; a year-round plan with several income streams, payroll on an S-corp salary, or a household with moonlighting and a working spouse costs more. A short look at the numbers settles which, and you get the quote before any work starts.
If you are self-employed:
If you are employed on a W-2:
Most of these are set during the year. By filing season it is too late to change most of them. You do not need to know which one applies before you call. A look at your income and current setup is enough to put a dollar figure on the structure you have now.
Share rough practice numbers or your most recent return, plus a note on any moonlighting or locum income, and the reply shows where you are overpaying and what can still be corrected this year. Confidential, handled by a CPA, not a call center.
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