Tax Planning for Doctors and Nurses: What Healthcare Professionals Often Overlook

/ Healthcare Accounting, High-Income Earners, Tax Planning / By

Tax Planning for Doctors and Nurses: What Healthcare Professionals Often Overlook

Between patient care, long shifts, and continuing education, most healthcare professionals don’t have time to comb through the tax code. But if you’re a doctor, nurse, or other medical provider, the IRS sees you as a high-income earner—and that means taxes can get complicated fast.

Unfortunately, we see too many professionals in the medical field overpaying in taxes or missing deductions entirely. So if you’re looking to keep more of what you earn, here’s what to pay attention to—and what many doctors and nurses overlook.

1. Student Loan Interest and Deduction Limits

If you’re still paying off student loans, the interest might be deductible—up to $2,500 per year. But there’s a catch: this deduction phases out at higher income levels.

In 2025, the deduction starts phasing out at around:

  • $75,000 MAGI (modified adjusted gross income) for single filers
  • $155,000 for joint filers

If your income exceeds these thresholds—as it often does for physicians—you likely won’t qualify. That’s why tax planning matters early in your career.

For long-term strategies, check out our tax planning services for doctors and nurses.

2. Unused Deductions for Licensing, CE’s, and Union Dues

Many healthcare professionals pay out-of-pocket for:

  • License renewals
  • Continuing medical education (CME)
  • Professional organization dues
  • Scrubs, stethoscopes, or other job-specific equipment

The challenge? W-2 employees often can’t deduct these unless they itemize and exceed the 2% AGI threshold. However, independent contractors and those who operate as a business entity can deduct them fully as business expenses.

If you’ve shifted into 1099 work, you might want to explore whether an S Corp or LLC makes sense for you. Our small business CPA team can guide you through the pros and cons.

3. Missed Retirement Contribution Opportunities

Doctors and nurses often have access to multiple retirement plans, including:

  • 403(b) or 401(k) through your hospital or employer
  • Traditional or Roth IRA
  • SEP IRAs or Solo 401(k)s if you do side work or contract work

These contributions not only help you prepare for the future, but they can significantly lower your taxable income today. High earners may also benefit from backdoor ROTH strategies, which require precise coordination to avoid tax headaches.

Need help choosing the right plan? Our business advisors offer personalized retirement tax planning for healthcare professionals.

4. Overpaying in Estimated Taxes or Withholding

Many high-income professionals don’t realize they’re paying too much throughout the year. If you’re getting a large refund every April, that’s money that could’ve been invested or applied toward your financial goals.

You may want to:

  • Adjust W-4 withholding with your employer
  • Review your quarterly estimated tax payments if you’re self-employed
  • Plan ahead for high-expense years (like buying a home or taking unpaid leave)

Let’s face it—there are better ways to use your money than giving the IRS an interest-free loan. Hogan CPA in Columbus helps clients avoid this by offering proactive, year-round tax planning.

5. Failing to Track Side Income or 1099 Work

Whether you’re doing private telehealth, consulting, moonlighting, or med spa work on the side, that extra income is taxable—and it often comes without tax withholding.

You’ll need to:

  • Track income and expenses separately
  • File a Schedule C if you’re a sole proprietor
  • Possibly pay self-employment tax (15.3%)

Need help setting up a system to track it all? Explore our Columbus bookkeeping services tailored to healthcare professionals juggling multiple income streams.

Final Thoughts: Your Career is Demanding—Your Tax Plan Shouldn’t Be

You spend your days helping others. Let us help you by making sure your taxes work just as hard as you do. Whether you’re an early-career nurse, a mid-career doctor juggling multiple roles, or approaching retirement, tax planning can make a huge difference in your financial future.

At Hogan CPA, we specialize in helping healthcare professionals across Central Ohio including Powell, Hilliard, and Grove City reduce their tax burden, stay compliant, and build long-term financial stability with smart strategies—not guesswork.

Want a second opinion on your current tax plan?
 Contact Hogan CPA Financial Services to schedule a confidential review—we’ll help you find the deductions, credits, and strategies you might be missing.