How Physicians Can Evaluate a Tax Savings Projection
Before accepting a six-figure savings projection, ask what produces the result, when it can be used, what it costs and which assumptions remain unconfirmed.
Start with a baseline return
A useful planning comparison starts with the same income, filing status, states and business facts for both scenarios. Identify the tax year and the income already earned. For practice owners, include owner compensation, staff costs, retirement commitments and cash distributions. For employed doctors, separate wages from any independent business.
Ask whether the proposed model includes all relevant taxes and costs. A comparison that changes revenue, ignores payroll costs or assumes unlimited deduction use cannot isolate the effect of the proposed strategy.
Separate four numbers that sound like savings
| Number in the proposal | What to ask |
|---|---|
| Deduction | How much can be used this year after applicable limits? |
| Current tax reduction | Which federal and state liabilities change, and relative to what baseline? |
| Tax deferral | When could tax become payable, including on a later distribution or asset sale? |
| Net financial benefit | What remains after study fees, filing fees, administration and required cash commitments? |
These amounts should not be added as if they measure the same thing. A cost segregation deduction, a retirement contribution and an entity change have different financial consequences.
Illustrative deduction versus tax reduction
Hypothetical arithmetic, not a client result: if an additional $100,000 deduction is fully usable at an assumed 30% marginal federal rate, the simplified federal tax reduction is $30,000 before fees and other effects. If only $20,000 is currently usable, the same simplified calculation is $6,000. Neither calculation establishes eligibility or total lifetime savings.
Ask the advisor to show the usable amount, the tax-rate assumption and the later-year consequences. The purpose is to compare the proposed work with its cost, rather than to treat the largest deduction as the best plan.
Questions for the person presenting the model
- Which actions remain legally and practically available for the year being modeled?
- What evidence supports owner pay, property basis and the use of rental losses?
- Which amounts are permanent savings and which are timing changes?
- How do federal and state results differ?
- Which advisor, payroll provider, plan administrator or preparer must implement each action?
- What happens if income changes, the property is sold or the plan is not funded?
For retirement proposals, ask the responsible plan professional to explain staff coverage, administration and funding requirements. The IRS retirement overview describes the main types of plans.
Compare the engagement with the projection
Request a written scope that identifies the analysis, deliverables, separate fees and implementation responsibilities. Retain the assumptions so the result can be revisited when the facts change. Do not rely on a headline figure as proof that the service pays for itself.
AE publishes $7,800 for Strategic Tax Advisory and $9,800 for Complex Tax Advisory. Strategic is one engagement paid in two installments of $3,900, 30 days apart, with no required recurring annual planning fee. Tax returns, amendments, cost segregation and additional work are separately scoped. Confirm the engagement, payment terms, properties, entities and filings before work begins. View published service fees.
For the service discussion, start with physician and medical-practice tax planning. This guide explains how to assess a proposal; the service page explains fit and next steps.
Frequently Asked Questions
Can a physician save six figures through planning?
Some facts may support a large benefit, but a headline amount is not evidence for your situation. Ask for a documented model with a consistent baseline, eligibility analysis and implementation costs.
Is a $100,000 deduction a $100,000 tax saving?
No. The effect depends on how much is usable, the applicable tax rates and other consequences.
Should I compare only the advisory fee?
Compare the entire proposed work, including separately priced studies and returns, administration and any required funding.
Where do I begin if I own a practice?
Begin with income sources, ownership, payroll, current benefits and upcoming transactions, then scope an advisory review.
Related Reading
Sources and content updates
By AE Tax Advisors Team. Content updated October 1, 2026. Read our editorial policy.
General information; planning and filing decisions depend on your facts and the applicable tax-year rules. Examples are illustrative, not guaranteed outcomes.
Talk Through Your Situation
Every situation turns on its own facts. Schedule a discovery call and we will walk through what applies to you, what it is worth, and what it would take to put it in place.