Yearly round this time, I’ve the identical dialog with at the very least one doctor pal.
It often begins with one thing like, “Peter, my CPA simply advised me how a lot I owe in taxes this yr. I used to be shocked!”
Possibly you’ve had that very same second. You’re employed laborious, take additional calls, construct aspect earnings, after which the tax invoice hits. You take a look at the quantity and surprise the way it’s even potential to ship that a lot of your earnings away in a single verify.
The reality is, most physicians pay extra in taxes than they should. Not as a result of they’re doing something fallacious, however as a result of they’re not being strategic sufficient.
We’ve been skilled to give attention to incomes extra, not essentially protecting extra. However essentially the most financially profitable folks I do know—physicians or not—are extremely intentional about taxes.
In order we head towards December 31, listed below are a couple of year-end tax strikes to contemplate. None of that is meant to switch your CPA’s recommendation, however my hope is that it helps you assume extra proactively earlier than the yr closes out.
Disclaimer: This text is for informational and academic functions solely and doesn’t represent monetary, authorized, or funding recommendation. Any funding entails danger, and you must seek the advice of your monetary advisor, legal professional, or CPA earlier than making any funding selections. Previous efficiency just isn’t indicative of future outcomes. The creator and related entities disclaim any legal responsibility for loss incurred on account of using this materials or its content material.
1. Prepay Subsequent Yr’s Enterprise Bills
A couple of years in the past, I keep in mind my CPA calling me in December and saying, “You’ve finished fairly properly this yr. Need to save a couple of thousand in taxes?”
He advised me to prepay a couple of enterprise bills—issues I’d be paying anyway subsequent yr each in drugs and my companies. I wrote a couple of checks earlier than December 31, and that one cellphone name saved me 1000’s.
When you’re a 1099 doctor or personal a observe, you’ll be able to usually deduct pay as you go enterprise bills like insurance coverage, lease, advertising, or training this yr as an alternative of subsequent. It’s one of many easiest methods to handle your taxable earnings.
2. Purchase a Enterprise Car (If You Really Want One)
I’ll always remember when a colleague advised me he purchased an enormous SUV “for the write-off.” After I requested what enterprise function it served, he mentioned, “Properly, I drive to the hospital.”
That’s not fairly the way it works.
When you legitimately use a car for enterprise—say you drive to a number of observe websites, conferences, or properties—it may qualify for a deduction by means of Part 179 or bonus depreciation. Autos over 6,000 kilos, like sure SUVs, usually qualify.
The hot button is it have to be used at the very least 50% for enterprise and positioned in service earlier than December 31. If it’s one thing you already want, this could be a sensible transfer. If not, don’t drive it. The IRS would possibly take a more in-depth take a look at it.
3. Improve Your Tech and Instruments
Most of us rely closely on expertise for work, whether or not it’s managing our observe, investments, or a aspect enterprise. When you’ve been enthusiastic about upgrading your laptop computer, cellphone, and even video gear, shopping for earlier than year-end may can help you deduct these prices this tax cycle.
For me, that’s seemed like changing my laptop computer that runs my enterprise and podcast setup. If it’s used for enterprise functions, you’ll be able to usually deduct the total price.
If there’s one thing in your observe that you simply’ve been enthusiastic about buying or upgrading, would possibly as properly do it earlier than the top of the yr.
It’s superb what number of physicians miss this one just because they wait till January to make the acquisition.
4. Set Up an Accountable Plan
When you run your corporation by means of an S-Corp or LLC, one of many cleanest methods to maximise deductions is to arrange an accountable plan.
It permits you to reimburse your self for business-related bills you pay personally—like your property workplace, web, utilities, or mileage. The enterprise will get the deduction, and also you obtain the reimbursement tax-free.
I do know physicians who depart 1000’s on the desk yearly as a result of they don’t have this in place. It’s a simple win and retains your bookkeeping easy and compliant.
5. Use the Augusta Rule
The Augusta Rule is a kind of IRS provisions that sounds too good to be true however isn’t. It allows you to lease out your property to your corporation for as much as 14 days per yr, and that rental earnings is totally tax-free to you.
You’ll be able to host a group retreat, content material day, or technique session at your property. The enterprise deducts the expense, and also you personally obtain the earnings with out paying a cent of tax on it.
A pal of mine who runs his personal observe does this each December for his annual planning assembly. It’s 100% respectable and an effective way to shift earnings in a compliant manner.
6. Take into account a Donor-Suggested Fund
For physicians who like to present charitably, a donor-advised fund (DAF) could be a sensible method to mix generosity with tax planning.
You’ll be able to donate money or appreciated inventory, get the total deduction now, and determine later which charities to help. Donating appreciated inventory is particularly highly effective since you keep away from capital features taxes whereas nonetheless getting the deduction.
When you’re in a higher-income yr, a DAF will help you scale back taxable earnings whereas setting apart funds for future giving. My household has finished this, and it’s made giving extra intentional and arranged.
7. Defer Earnings and Speed up Bills
Timing issues. If subsequent yr’s earnings will likely be decrease—possibly you’re chopping again shifts, taking day without work, or transitioning to a brand new position—you’ll be able to defer earnings till January and speed up deductible bills into this yr.
For instance, if you happen to run your personal observe, delay billing till January. Or if you happen to’re 1099, wait to bill till the brand new yr. On the flip aspect, pay upcoming bills now.
It’s not about gaming the system; it’s about managing your tax brackets strategically.
8. Pay Your Children Via Your Enterprise
This one’s each enjoyable and academic. In case your youngsters assist in your corporation—possibly they seem in advertising images, assist with mailers, or manage digital information—you’ll be able to pay them an inexpensive wage.
The primary $13,850 they earn (in 2025) is tax-free, and your corporation will get a deduction. Plus, it’s an excellent alternative to show them about work, saving, and investing. I do know physicians who use this earnings to fund their youngsters’ Roth IRAs or 529 plans.
It’s a win-win for the household and the enterprise.
9. Spend money on Actual Property with Bonus Depreciation
This one is near my coronary heart as a result of actual property has been one of the highly effective instruments for me and lots of physicians I do know to each develop wealth and scale back taxes.
Bonus depreciation permits you to deduct a big portion of a property’s depreciable worth within the first yr. For 2025, it’s 60%, which may considerably offset earnings.
When you qualify for actual property skilled standing (REPS) or actively handle sure sorts of properties, these “paper losses” may even offset energetic earnings. Even with out REPS, you’ll be able to usually use them to cut back passive earnings from different investments.
This is likely one of the causes actual property investing continues to be such a invaluable a part of my very own monetary technique.
10. Discover the Brief-Time period Rental Loophole
Right here’s one which’s rising in recognition amongst physicians. When you personal or plan to purchase a short-term rental property, you could possibly use the losses to offset energetic earnings if you happen to materially take part.
Meaning being straight concerned—dealing with bookings, managing cleanings, speaking with friends, or overseeing the property your self, at the very least for the primary yr it’s in service. Many physicians will buy the property close to the top of the yr, put it in service, self-manage and put within the crucial time, and within the following yr flip it over the skilled administration.
When finished proper, this technique can create substantial tax benefits. I’ve seen physicians use it to not solely decrease their tax payments but in addition construct a life-style asset they will use with their households.
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A Fast Mindset Shift
Right here’s one thing that utterly modified the best way I method taxes.
Submitting taxes is what all of us do in April. Tax planning is what the rich do within the fourth quarter.
Most physicians are on protection—we hand our numbers to a CPA and hope for the very best. However the physicians who get forward financially play offense. They plan early, ask questions, and make strikes earlier than December 31.
You don’t must know each tax rule. You simply must be proactive sufficient to ask your CPA, “What else can I do now earlier than the yr ends?”
Wrapping It Up
Yearly, I see physicians overpay 1000’s of {dollars} as a result of they’re too busy to consider taxes till it’s too late. And I get it—between drugs, household, and all the things else, who desires to consider tax codes in December?
However small, intentional strikes now could make an enormous distinction.
So earlier than the clock strikes midnight on December 31, take an hour or two to satisfy along with your CPA. Evaluate your numbers, speak by means of these methods, and ensure you’re not lacking alternatives that might make an actual impression.
You’ve labored extremely laborious in your earnings. Be sure it’s working simply as laborious for you.
Last Ideas
Being tax-smart isn’t about avoiding taxes or discovering loopholes. It’s about understanding the foundations and utilizing them properly. The extra intentional you might be, the extra freedom you create—to work much less, spend extra time with household, and give attention to what really issues.
Disclaimer
I’m not a CPA, legal professional, or monetary advisor. The knowledge I’m sharing is for academic functions solely and shouldn’t be thought-about monetary or tax recommendation. Everybody’s state of affairs is exclusive, so please talk about these concepts along with your CPA or certified tax skilled earlier than making any selections.
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Peter Kim, MD is the founding father of Passive Earnings MD, the creator of Passive Actual Property Academy, and provides weekly training by means of his Monday podcast, the Passive Earnings MD Podcast. Be part of our group on the Passive Earnings Doc Fb Group.
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