tax planning for doctors

Ready to open a practice

Dr. John is an orthopaedic surgeon employed by a hospital (W-2 earner), who came to us seeking advice on opening his own practice. He wasn’t sure about his optimal entity structure (single-member LLC, S-Corp, C-Corp), and how to maximize all the tax breaks available to him as a future business owner. He also wanted to work with a CPA firm that would accommodate his very busy schedule.

We were able to offer a series of tax reduction strategies that not only took typical deductions under consideration, but also advanced strategies. He received a report detailing 9 strategies that applied to his individual case. Dr. John can potentially save approximately $116,000 – this year and every year going forward.

He was able to work with us without disrupting his work schedule, in his limited free time, over the phone, email, text and videocall.

Reduce tax liability

Three practices in two states

Dr. Mike is a dentist who owns 3 dental practices across 2 states. He came to us for help reducing his taxes and organizing his QuickBooks file, as it hadn’t been maintained properly. We were able to “clean up” his accounting and, in the process, discovered that his previous year’s tax returns had not been prepared correctly, as his accounting had not reflected actual income and expenses. We amended his previous year’s tax return and started the tax planning process.

Dr. Mike had not been maximizing his deductions, and also was not quite sure which expenses to keep track of (and how to keep track of them).

We helped him change his entity structure from an LLC to an S-Corp, advised him on the deductions he should be taking, and helped him hire his wife, who had been hitherto informally working with Dr. Mike on the business. With just a few strategies we helped him save approximately $53,200 annually in taxes.

However, we also employed additional, advanced tax-planning strategies for total savings of approximately $149,000 in total in a single year.

Needless to say, this client would have overpaid almost $750,000 in a five-year period had he not contacted us.

how to save in taxes

Increasing deductions

Dr. Allison is a self-employed nephrologist, a minority partner in a dialysis clinic, and owns two rental properties. She was unhappy that despite paying taxes quarterly, she still owed the IRS additional funds at the end of the year.

When she came to us, she was only deducting car mileage, travel and license-related expenses. We helped her claim all expenses legally available to her.

We also recommended that she set up an LLC, which opened her up to additional deductions.

After all was said and done, we helped Dr. Allison save $45,000 annually.

tax planning for physicians

The W-2 earner

Dr. Jane is a surgeon employed by a large hospital in a major city. Her work keeps her very busy and she has only one day off a week. All her income is on a W-2. She was upset by the fact that a major chunk of her paycheck goes to “Uncle Sam”. Although she’s very knowledgeable about taxes and finances, she was convinced there was very little she could do to lower her tax liability.

Following an initial interview and a review of her previous years’ tax returns, we were able to suggest a variety of strategies that resulted in net tax savings of $31,600 annually.