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How a doctor is taxed depends on whether you're employed or self-employed — and the two are taxed very differently. Own the practice or work 1099? Structure and self-employment tax are the levers. On a W-2? The savings sit outside the paycheck: the full employer plan, a backdoor Roth, and a plan for any moonlighting income.
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. A hospital 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. Most salaried earners never use all of it. See IRS retirement plan limits for the current contribution ceilings.
Two tracks, set by how you're paid. The wrong one wastes money every year.
Sole proprietor, LLC, or S-corp — and what changes once you elect. An S-corp splits income into a reasonable salary (subject to SE tax) and distributions (not subject). See convert LLC to S corp for the election mechanics.
Solo 401(k), SEP, and cash balance plans that shelter far more than an employee's 401(k). A cash balance plan can move six figures out of taxable income for a high-earning physician-owner.
The 2026 elective deferral limit for 401(k), 403(b), and most 457(b) plans is $24,500. A hospital physician with access to both a 403(b) and a 457(b) has TWO sheltered accounts — most only use one.
Above $252,000 of joint income in 2026 you cannot contribute to a Roth IRA directly; between $242,000 and $252,000 the direct limit phases down. The backdoor Roth is the route Congress left open. Each spouse can do it — that's up to $14,000 per year of Roth for a physician household.
We separate practice revenue, 1099 work, and any W-2, and review your entity and retirement setup. If you moonlight, that 1099 income routes through its own retirement plan and estimates — most doctors don't set that up.
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. See S-corp reasonable compensation for the salary side.
We file the election if it pays, set the salary and quarterly estimates, and open the retirement plan that fits. Safe harbor estimated taxes to avoid the underpayment penalty.
We hold your practice books and personal return together, so the structure matches your whole situation. 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.
Fees depend on the work. A one-time entity switch costs the least. A year-round plan with several income streams — practice payroll, an S-corp salary, a household with moonlighting and a working spouse — costs more.
A short look at the numbers settles which. You get the quote before any work starts. Share last year's return and a note on any moonlighting or locum income; the reply shows where you are overpaying and what can still be corrected this year.
Two lists — one per situation. Most of these are set during the year; by filing season, most can no longer be changed.
Sources: IRS retirement plan limits (2026); Instructions for Form 2553; IRC §1361-1362
A good fit if:
Practice owner with equipment-heavy overhead? See tax planning for dentists — parallel practice-owner playbook. On S-corp mechanics: LLC taxed as S corp and S-corp reasonable compensation.
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.
"We had over a hundred clients this last tax season that were in the wrong business structure. 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."
— George Dimov, CPA, Founder of Dimov Tax
Send last year's return and a note on any 1099 income. The reply shows what can still be corrected this tax year.
