How Can A Medical Doctor Pay Less Taxes? — RBA Tax Advisors

How Can A Medical Doctor Pay Less Taxes?

Author: Ronica Brown | Estimated Reading Time: 2 minutes

Are you a medical doctor who gave away at least 35% of your income to the IRS last tax season?

It’s nerve-racking to see your tax bill deplete your hard-earned money!

So, you’re searching for a solution that can help you pay less taxes

I’ve worked with several medical professionals over the past few years and helped each of them save at least $50,000 on their tax bill. 

That’s $50,000 more in their pockets each year!

The strategies I use differ from what you’ll see in many other articles. Some of the most common tax strategies used include:

  • Reducing taxable income

  • Delaying collecting your money

  • Buying more equipment

  • Deferring taxes

  • Contributing to retirement plans

These strategies can form part of a tax savings plan. But, they won’t create a considerable dent in the taxes you pay. Certainly not $50,000 in savings! 

You also won’t be able to spend your money freely if you use those strategies.

That’s why the tax savings strategies my team and I focus on relate more to:

  • Maximizing tax saving strategies that return cash to you rather than solely reduce your taxable income

  • Restructuring your business for tax benefits

  • Increased cash flow

  • Leveraging all tax benefits in recent tax legislation

This isn’t a DIY project; you won’t maximize these benefits if you try to access them on your own. You need a trained tax advisor who will align your tax savings plan with your short-term and long-term financial goals. 

With that said, let me explain some of the most effective strategies that can be used to help you pay less taxes as a medical doctor. 

These strategies help you maximize the money returned to you. I discuss them in greater detail in my free Tax Reduction Guide. You can access that guide for further details but here’s a synopsis of the key points. 

Medical doctors performing surgery

Photo by JAFAR AHMED on Unsplash

Claim Tax Refunds from the Prior Year’s Tax Returns

You can claim tax refunds on the prior year’s tax returns by either:

  1. Amending the tax return

  2. Filing a method change

You can learn more about the sources of these refunds in The Tax Savings Blueprint.

We work with our clients to determine the method that allows them to claim the most lost deductions and ultimately increase the size of their refunds.

Create Deductions that Return Money to You

Most deductions cost money. In other words, you spend money on something and only get back a portion of the money you spent. But, there are some deductions that will actually return money to you. Some of them include:

Restructure Your Business Entity and Assets

Your business must be structured the right way so that you can strategically move cash to pay yourself. Once you’ve maximized how much you pay yourself, you can begin saving more on taxes by either restructuring or adding other entities.

There are several options available, such as holding companies or management companies, to help you reduce your taxes. When done right, your taxable entity will create the first level of tax savings for your business.

Capitalize on New Tax Legislations

There are new tax legislations every few years, especially when there’s a change of administration. The team at RBA Tax Advisors keeps abreast of these changes and develops a strategy. This strategy helps us use the legal loopholes in the legislation to find tax savings for our clients. 

For instance, the 2020 Cares Act that was enforced as a result of the coronavirus pandemic helped us get a client $88,262 back as a tax refund. 

Invest in Tax Favorable Investments that Increase ROI

The government included some favorable tax investments in the tax law to help industries such as renewable energy and farming. Capitalizing on these investments can help you get both a good ROI and tax savings. You could use:

  • Pass through investments

  • Qualified tax credits

  • A trade-off of tax credits or incentives for tax discounts

One of our clients got a $23,483 federal tax credit in 2018 for investment in energy!

Conclusion: You Should Be Paying Less Taxes as a Medical Doctor

There are medical professionals who’ve come to me with over $100,000 in tax expenses. That’s way too much money! You may not be paying that much, but you may be spending at least 35% of your income on taxes. It’s time to change that!


The team at RBA Tax Advisors is ready to help you create a tax savings plan that increases your cash flow and helps you pay less taxes. Schedule a call with me to find out how we can help you.

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