Tax Planning for Physicians and Medical Practice Owners
Build a tax plan around how you earn your income: medical practice profits, independent contractor work, employment, or a combination of these and investment property.
Practice income, property and retirement in one planning discussion
A profitable practice can involve several competing uses for cash: staffing, owner compensation, retirement funding, an acquisition and a building purchase. Bring these decisions into one forecast before committing to a plan.
Questions for your advisory scope
- Which practice entities, owner returns and states need coordinated review?
- What changes if you buy a practice and its building together?
- Who models retirement funding alongside operating reserves and debt payments?
- Who coordinates the recommendations with your preparer and plan administrator?
Discuss an engagement that identifies written alternatives, assumptions, decision dates and implementation owners.
Strategic Tax Advisory: $7,800. Complex Tax Advisory: $9,800. Returns, amendments, cost segregation and additional work are separately scoped. Confirm deliverables, implementation responsibilities and the support period in your written agreement. Review fees and engagement scope.
Buying a dental practice and building · Evaluating a cash balance plan · Coordinating practice income and rentals
Read a documented practice-owner planning roadmap. The case describes planning recommendations; it does not establish that every action was implemented or a final saving realized.
Medical practice owners and 1099 physicians
AE Tax Advisors serves physicians who own practices or have business income that needs coordinated advisory and compliance work. A doctor running a practice has different decisions from an employed physician with only W-2 income. Start by mapping income sources, ownership, payroll, retirement arrangements and major transactions.
This service can be relevant when starting independent contractor work, buying into a practice, changing an entity, hiring staff, buying a practice building or preparing for a sale. The objective is a plan with defined actions and responsibilities, rather than an advertised savings amount.
Match the planning review to your income
| Physician situation | Planning questions |
|---|---|
| Practice owner | How do owner pay, staff costs, retirement funding and distributions fit the practice’s cash flow? |
| 1099 or locum tenens work | Which expenses, entity choices, estimated payments and retirement options need review? |
| W-2 employment plus a business | Which income and benefits belong to the employer, and which belong to the separate business? |
| Practice owner with rentals | Who owns each asset, and how do rental activity and owner-level limits affect the combined return? |
W-2 wages do not become business receipts simply because a physician forms an LLC. Separate the employment relationship from any actual independent business.
Entity choices and S-corporation owner pay
Before an entity election, compare projected compensation, payroll administration, state treatment, benefits, distributions and longer-term ownership plans. The IRS requires reasonable compensation for services by S-corporation shareholder-employees before non-wage distributions. See IRS guidance on S-corporation compensation.
Use the S-corp owner salary guide to assemble the role and pay evidence. A target tax saving does not establish the appropriate salary.
Retirement planning without ignoring the practice budget
Compare available plan designs with employee eligibility, expected contributions, administration and cash commitments. A larger deduction can require a larger funded commitment. Coordinate the practice’s plan with other arrangements and the responsible plan administrator. See IRS retirement plans for self-employed people.
Discuss retirement and exit planning before adopting a plan or making a transaction commitment. Tax modeling should state the year and assumptions used.
Practice buildings and investment property
Keep the practice operating business, property ownership and rental activity distinct in the records. A building purchase may call for basis reconciliation and a separately scoped depreciation study. Rental losses require their own analysis; professional status as a physician says nothing about real estate participation.
Review medical-office cost segregation or residential STR cost segregation for the property involved. AE’s core study audience is residential investment property; confirm whether a medical-office project fits the current scope.
Engagement scope, fees and first steps
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.
Confirm the physician, practice entities, states, payroll review, tax returns and property work covered by the proposal. Name the professional responsible for each filing and the records needed from your bookkeeper or current CPA. Meet the advisor team.
- Summarize W-2, 1099, practice and investment income.
- List entity ownership, staff and current retirement plans.
- Identify purchases, buy-ins, equipment changes or a planned exit.
- Explain what your current preparer handles and where you need additional help.
Frequently Asked Questions
Is this service for employed doctors?
The focus is practice owners and physicians with business or investment complexity. A W-2-only situation may need a different scope; discuss fit on the first call.
Do all 1099 physicians need an S corporation?
No. Evaluate the facts, compensation, benefits, state rules and administration before choosing an entity.
Can you coordinate practice income and rental properties?
That can be part of a scoped advisory engagement. Property study and return-preparation fees are separate and should be confirmed.
Do you guarantee six-figure savings?
No. Results depend on income, records, eligibility, implementation and timing. A written model should distinguish deductions, current savings and deferrals.
Can I retain my current accountant?
Discuss the coordination arrangement and make sure the engagement assigns implementation and filing responsibilities.
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.
Compare the Advisor and Scope for Your Next Decision
Physician financial resources and the next planning step
Compare education, debt advice, household financial planning, and a defined business or property tax project.
Choosing a tax advisor for physicians
Clarify whether the proposal covers employed income, independent contractor work, practice ownership, property, and household filing. Confirm coordination with payroll and retirement plan specialists. A physician-specific website headline is less useful than a defined engagement for your income sources.
Use the tax advisor buying checklist and compare provider pricing and quote scope.
Tax preparation and planning for your next step
Choose the filing service or planning tool that matches your next decision. Confirm the entities, tax years and deliverables in your engagement.