Reduce self-employment taxes—increase retirement savings 

As an independent contractor physician, the most painful consequence of failing to properly establish yourself as a corporation is the annual overpayment of income and self-employment taxes.  Making the decision to incorporate not only reduces your annual tax burden but significantly increases the amount of retirement savings you can set aside each and every year.  

 As a physician, you have spent countless hours in the classroom and clinical training, and have finally reached the point at which you are finally reaping the financial rewards for all of your hard work, only to find out that you have to give more than half of everything you make to the government via income and self-employment taxes.  Read on to learn how to reduce your tax bill, and pay yourself first. 

  • Physician CorporationMake sure you Incorporate properly and file the correct forms in a timely manner.  Most document filing services will file and charge you for the forms you request.  What you really want is someone who will tell you the correct forms for your circumstances, assist you in completing them, and file them in a timely, cost-effective manner.  This is definitely a case of getting what you pay for, but you also do not get what you do not pay for.  Unfortunately, not filing a correct form in a timely manner could cost you tens of thousands of dollars annually. 
  • Physician Self Employment TaxesSet up your payroll and pay business expenses on a regular schedule.  By having your business expenses and monthly payroll done on a regular schedule, you will reduce the chance that something gets overlooked, which could result in late charges and unnecessary penalties.  In addition, paying yourself a fixed monthly salary will put you in the habit of saving more, and make the actual running of your business more streamlined.  
  • Physician Retirement AccountsUse all possible retirement plan vehicles to their maximum benefit. While the most common retirement accounts include IRA’s and Roth IRA’s, as a corporation, the options are expanded significantly, allowing you to not only save a significant amount toward your retirement, you can also shelter these funds from taxes and judgments as well. 
  • Physician Investment AdvisorHire a professional to manage your assets based upon your personal goals and objectives.  You are a professional, which has taken many years of education and training.  Hire a professional to manage your assets, as this will decrease the likelihood of the pitfalls met by many a part-time investor, but when hiring a professional, hire someone who gets paid over time, not paid by what you invest in.  Only use a Registered Investment Advisor, and never pay a sales commission.  
  • Physician Corporation ComplianceKeep your corporation filings current to maintain these and many other advantages that are open to you.  In order to have the advantages of being a corporate entity, you must behave like a corporate entity, which includes the filing of monthly reports and holding board meetings.  Failure to complete these will open you up to personal judgment and potentially hefty IRS penalties.


My Professional CFO, LLC, is a professional services firm providing the highest level of service in the areas of Corporate Compliance, Accounting and Investment Management to Independent Contractor Physicians and Physician Assistants.  My Professional CFO, LLC serves as an “Outsourced CFO” to those professionals who want to focus on what they do best.  Our client partners are able to draw on our decades of experience and expertise 

For more information visit our website 

Email us with any questions. Call us at: 1 (800) 517-0236 

3 tips on how to save major dollars right out of your residency and into your private practice

Congratulations! You’ve graduated from medical school and have completed your internship and residency programs. Now, you’re officially ready to reap the financial rewards of all your hard work. Here’s a secret no one has told you yet: this is the moment your financial decisions will affect the rest of your life, at least the next 25 years. Making the right decisions here can be a make or break situation. Did you hire a business manager? Did you set up a physician pension? Did you avoid both and are leading a life towards paycheck-to-paycheck living? Not to be too scary, but this is more normal than not, and we’re here to make sure this doesn’t happen to you. These three tips will help you start your finances off on the right foot and losing your footing along the way.  

Tip #1: Avoid Tax Liens  

Tax liens are easily avoidable, but also easily attainable. They accrue by physicians not paying quarterly estimated tax payments or simply not spending everything as the checks come in. As a physician, the IRS knows you make a lot of money, so underpaying your taxes is never a smart idea. A smarter idea would be to set yourself up as a Physician Corporation and pay the business expenses that are allowed and file your payroll tax payments and returns on time. The physician business expenses will reduce some of your income and the regular salary will keep you from overspending. Don’t think your savings account (or piggy bank) will be sufficient come tax time; only a business manager can confidently keep you safe from these financial threats.  

Tip #2: Set Up Your Physician Investments  

Payroll deductions can include funding your retirement accounts. After all, you don’t want to work shifts forever. You, as an officer of your corporation, can have a “pre-tax salary deferral” in your 401(K) plans, as well as a “post-tax contribution” to your Roth 401(K) plan. You’ve probably never heard of the Physician Pension Plan. You can establish a pension for yourself that is an expense to your business. Essentially, this will reduce your taxable income and maximize your annual savings. With a business manager, you will establish the right type of plan and the appropriate funding level to meet your needs.  

Tip #3: “Judgement Proof” Your Assets  

There are countless companies that will gladly take your money and set up a captive insurance company or create an elaborate offshore trust system to shield your assets from judgment. We’ve even known physicians to place all their assets in their spouse’s name. With all things considered, the least expensive and most effective method for a physician to protect their assets is to extensively fund their retirement. Physician retirement plans are also exempt from bankruptcy (in case you didn’t know). With a business manager, you’ll learn more about this.  

With the proper team, you as a new physician can prevent yourself from years of paying off debts and living paycheck-to-paycheck. Hiring a business manager will save you more in annual taxes than you will ever pay in services. With My Pro CFO, you can a well-trained and knowledgeable professional on your team. With My Pro CFO, you will have business management who specializes in Corporate filings and ongoing Compliance, Accounting and Payroll and Investment Management. We will be with your every step of the way, so you don’t make silly mistakes that new physicians tend to make. You can speak to a Professional CFO today by visiting our website at and learning more about how we can your future simpler and much brighter.