As a surgeon, you’re among the highest-paid medical professionals, but with that comes an elevated level of taxes. With long days in the operating room and not much spare time for financial planning, it’s easy to overlook tax planning strategies that can have a significant impact on your post-tax income. Tax planning may enable you to save a substantial portion of your earnings and enhance your financial future.
At Surgeons Capital Management, surgeon wealth management is our field of expertise. With a thorough understanding of financial planning for surgeons, we can help you implement individualized tax planning for your specific financial situation.
Tax-Savvy Techniques for Surgeons in 2025
You can take advantage of several techniques designed to reduce your tax burden in 2025.
Maximize Retirement Contributions
Tax-advantaged retirement savings present a tremendous opportunity to save your taxed earnings and build wealth for years to come. Contribute whatever you can to a 401(k), a profit-sharing agreement, or a defined benefit agreement from pre-tax earnings to reduce your tax burden.
- 401(k) Plans: Contributions defer taxes and compound for future use in your retirement. The money you contribute each year helps secure your retirement fund and save on current taxes.
- Profit-Sharing Plans: These plans provide higher contribution limits for practice owners. The contribution options are flexible and, thus, a perfect alternative for variable income earners such as surgeons.
- Defined Benefit Plans: These plans provide high earners with extensive tax deferment opportunities. They have the potential to generate retirement savings and lower current taxable income.
Strategic Investment Diversification
Diversification* is both a basic risk management principle for surgeons and a tax efficiency concept. A properly diversified portfolio helps manage risk. It delivers tax benefits in terms of asset allocation and tax-loss harvesting. Consider the following:
- Asset Allocation*: You can maximize investments in tax-favored and taxable accounts for after-tax returns while placing tax-inefficient investments in tax-deferred accounts, with a goal of minimizing tax drag.
- Tax-Loss Harvesting: Selling underperforming investments can counteract capital gains, minimizing your taxes owed. Tax-loss harvesting can be particularly beneficial in a down economy to lock in tax savings.
Tax-Efficient Investing
Investing in tax-efficient investment vehicles can enhance long-term investment returns. Tax-managed mutual funds and municipal bonds reduce your tax liability without compromising portfolio growth.
- Municipal Bonds: Earn federally tax-free and, in numerous instances, state tax-free income. Municipal bonds can serve as a perfect wealth conservation tool for high earners.
- Tax-Managed Funds: Intended to reduce taxable distributions, these funds actively manage buying and selling to reduce capital gains taxes.
Business Expense Optimization (for Practice Owners)
If you operate a medical practice, good expense management can help generate significant tax savings. Minimizing business costs with appropriate expense management can reduce taxable income and optimize cash flow.
Monitoring common deductible expenses can help reduce your taxable income and enhance cash flow:
- Medical equipment and office supplies
- Ongoing education and licensure fee
- Employee benefits and pension payments
Charitable Giving Techniques
Donations to charitable causes provide tax-saving opportunities. You can decrease your taxable income by donating appreciated assets or using donor-advised funds.
- Donating Appreciated Assets: Avoid taxes on capital gains and receive a charitable deduction. Donating appreciated assets will allow you to give more and enjoy greater tax savings.
- Donor-Advised Funds (DAFs): These allow donors to take immediate tax deductions and make charitable gifts over time. They provide a flexible way of giving to charities with optimized tax benefits.
- Qualified Charitable Distributions (QCDs): For ages 70½ and older, QCDs from IRAs can satisfy required minimum distributions (RMDs) without increasing taxable income. It is a tax-efficient way to make gifts to charities while simplifying RMDs.
State and Local Tax Factors
State and local taxes are a significant consideration in general tax planning. Reviewing your state’s income taxes, property taxes, and sales taxes can help you make informed financial decisions.
Moving to a state with lower income taxes can enhance post-tax earnings. Tax legislation in individual states varies enormously, so careful planning is required when considering a move.
You should understand tax exemptions and deductions for real estate investments. The proper structuring of real estate holdings can lead to significant tax savings over time.
The Importance of Professional Guidance
Navigating tax planning for a high-income surgeon involves collaboration and finesse. Surgeons with personalized financial planning can maximize the use of tax-saving techniques, which can complement their overall wealth management objectives. Using a financial advisor with the understanding of a surgeon’s high-net-worth investment management and estate planning strategy needs can give you financial confidence when striving to maximize your after-tax earnings.
At Surgeons Capital Management, we deliver surgeon-specific financial planning, risk management, and financial risk management. We are able to work with you to implement proactive tax planning strategies designed to promote long-term economic success.
Take Charge of Your Financial Future
Tax planning can work toward maximizing your after-tax earnings. By optimizing your retirement contributions, investing in a tax-effective manner, and optimizing your business expenses, you are better able to build a strong platform for wealth maintenance and family heritage creation.
Surgeons Capital Management is committed to navigating you through the complexities of tax planning by tailoring personalized strategies. Contact us today to schedule a consultation and take a step toward financial assurance in 2025.
*Asset Allocation, which is a method of diversification that positions assets among major investment categories, does not guarantee a profit or protection against a loss.
The subject matter discussed in this article is for informational purposes only. It is not intended and should not be relied upon as investment or financial advice and does not constitute an offer, recommendation, or solicitation.
Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.
Duly-registered and duly-licensed financial professionals with Surgeons Capital Management offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA/SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC, Equitable Network Insurance Agency of Utah, LLC, Equitable Network of Puerto Rico, Inc.). Equitable Advisors and Equitable Network are affiliates and do not provide tax, legal, real estate, or malpractice advice or services. Please contact your personal tax and/or legal advisors regarding your specific situation prior to implementing any specific strategies.
Surgeons Capital Management is not a registered investment advisor and is not owned or operated by Equitable Advisors or Equitable Network. PPG-7674983.1 (2/25) (Exp. 2/29)
