1. Basics — Tax Planning for Medical Doctors in the USA

Taking some time to understand how the tax system works can be in your favor. Most of my colleagues gets hit with large IRS bills, and they pay hefty fees for financial planners, and advisors. This is the first article of many, in an effort to help explain how the system works and introduce some of the creative strategies that i have seen over the years. This is not a financial advice.

1. Total Income ≠ Taxable Income.

There are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The reason why taxable income < total income is because:

• You get to subtract tax deductions from your total income depending on your business, career, and services.
• you get to define the tax brackets based on your social status, and based on the amount of taxable income.

Social Status: Single Filer

Social Status: Married Filing Jointly