W-2, 1099, and K-1 at the same time
Most attending physicians have at least two income streams: a hospital or group W-2 and locum or moonlighting 1099 work. Many have partnership K-1s from practice ownership on top. Coordinating the three is most of the work.
Practice ownership and structure
Medical practices are Specified Service Trades or Businesses (SSTBs) under Section 199A, which means the 20% QBI deduction phases out at higher incomes. Structuring owner compensation, retirement plans, and family employment matters more than it would in a non-SSTB.
- S-corp vs. PLLC analysis
- Cash balance plan combined with 401(k) for high-income partners
- Retirement plan design for both partners and staff
- QBI phase-out modeling
Physician-specific deductions
CME, board certification fees, required licensing, malpractice insurance (if not reimbursed), and job-search costs for a first-attending position all belong on the return.
Common questions
- Can I deduct my medical school loans?
- The principal is not deductible. Interest is deductible up to $2,500 if your income is below the phase-out. PSLF applies for nonprofit employers.
- What's the best retirement plan for a practice partner?
- Depends on income, partner count, and employee count. High-income solo or small-group practices often benefit from a cash balance plan combined with a 401(k).
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