Let's talk taxes

[Dr. Anonymouss]

As the title says, I am very interested to hear how much physicians are paying in taxes and what are the best ways you know of to reduce your taxes. Please include your specialty or your salary range so we can have a better idea what tax bracket you fall into based on your salary and what tax bracket you are actually paying into based on your deductions.

Also, if you have any recommendations on books/content which helped you in lowering your tax rate as a physician please share!

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[Candidate2017]

As the title says, I am very interested to hear how much physicians are paying in taxes and what are the best ways you know of to reduce your taxes. Please include your specialty or your salary range so we can have a better idea what tax bracket you fall into.

Also, if you have any recommendations on books/content which helped you in lowering your tax rate as a physician please share!

It helps to understand the philosophies that drive the tax code. The tax code favors owners not wage laborers/employees. It makes sense because owners drive the economy and increase GDP, not laborers. Ironically though, hospitals prefer laborers (easy to control, easy to profit off) and med students/new attendings like being wage slaves rather than licensed independent professionals.

Own your practice under a legal entity (LLP, PC, etc), self funded pension/defined benefit plan (up to $245k per year in 2022), pay yourself FMV salary and the rest as deferred compensation and dividends or reinvested in your business. Consult an accountant and lawyer.

 

[ACSurgeon]

Owning your business is much better than being employed.

Some states have much lower property tax and little or no state income tax.

Donate

Have dependents

 

[thepoopologist]

Here's a winning formula to save on taxes:

Make a 400k+ salary as an employee

Claim 0 exemptions

Live in California

Don't own property

Don't own a business

Be single with no children

Have 0 relationships with a good accountant or lawyer

Don't invest in a 401k, 403b put it all cash in a savings account.

 

[Lem0nz]

Dump it all into dogecoin. Don't report to the government you bought and sold dogecoin. Sell dogecoin for $$$$$.

 

[spidermedic]

Here's a winning formula to save on taxes:

Make a 400k+ salary as an employee

Claim 0 exemptions

Live in California

Don't own property

Don't own a business

Be single with no children

Have 0 relationships with a good accountant or lawyer

Don't invest in a 401k, 403b put it all cash in a savings account.

Oof that quickly turns into 230k

 

[aSagacious]

Go to the White Coat Investor forums and browse their FAQs. All good stuff.

 

[Neopolymath]

Go to the White Coat Investor forums and browse their FAQs. All good stuff.

Yeah, I don't want to stifle discussion on a very important topic (and lesson for naive trainees; don't be an employee scrub... be a partner) but this has been rehashed on finance specific websites such as WCI, boglehead, physician on fire, mister money moustache and on and on and on over and over and over for literally decades at this point. You will see more candid discussion there as well, OP.

 

[Dr. Anonymouss]

Yeah, I don't want to stifle discussion on a very important topic (and lesson for naive trainees; don't be an employee scrub... be a partner) but this has been rehashed on finance specific websites such as WCI, boglehead, physician on fire, mister money moustache and on and on and on over and over and over for literally decades at this point. You will see more candid discussion there as well, OP.

Thanks for the heads up! I will be sure to check out those forums/websites.

 

[Tenk]

Buy stonks. Don’t sell them. Become rich. Pay only long term capital gains when you do. Live in a state without state taxes.

You did it!!!!

 

[7331poas]

No one said "put it all on GME". Therefore I know you guys are bad at finance

 

[0ncogene]

Go to the White Coat Investor forums and browse their FAQs. All good stuff.

Also listen to the White Coat Investor podcast on iTunes or Spotify. I had no knowledge of finance until 6 months ago. Still a beginner but learning a little bit more everyday.

 

[mvenus929]

You get to deduct things off your taxes if you own a home, have children, make retirement contributions, and donate to charity. If you're not an employee (i.e. you get paid via 1099), you can deduct any and all business expenses against your income and can make more retirement contributions--but you should get paid more than you would as a W-2 employee because you also don't get benefits.

You pay less in taxes if you live in a state with no or little income tax and don't have local taxes. Doesn't reduce your federal income taxes, but it does reduce the rest of them.

 

[Dr. Anonymouss]

You get to deduct things off your taxes if you own a home, have children, make retirement contributions, and donate to charity. If you're not an employee (i.e. you get paid via 1099), you can deduct any and all business expenses against your income and can make more retirement contributions--but you should get paid more than you would as a W-2 employee because you also don't get benefits.

You pay less in taxes if you live in a state with no or little income tax and don't have local taxes. Doesn't reduce your federal income taxes, but it does reduce the rest of them.

Thank you for this! I have lots to learn about taxes, but I want to pay as little as possible to uncle sam.

 

[SurfingDoctor]

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