Physician Tax Planning: A 2026 Guide for New Attendings

New attendings rarely get surprised by their income. They get surprised by their taxes. The reason is simple: when your pay jumps in the middle of a year, the amount withheld from your paycheck rarely keeps up with the bracket you just entered.

Why the first tax bill stings

Withholding is built on an assumption about your annual income. Start attending pay in July, and the payroll system often assumes a lower full-year number than you will actually earn. The shortfall shows up in April as a balance due, sometimes a five-figure one. If any of your income is 1099, nothing was withheld at all.

1099 or W-2: decide it deliberately

Your employment structure shapes your entire tax picture, from payroll taxes to retirement contributions to deductions. Many emergency physicians, anesthesiologists, and locum doctors hold 1099 income across multiple hospitals. That structure carries genuine advantages and genuine obligations, and we cover the trade-offs in a dedicated article.

The 2026 changes to know

• The Qualified Business Income (QBI) deduction increases from 20% to 23% for eligible self-employed professionals in 2026.
• The Social Security wage base rises to $184,500 for 2026, which sets the ceiling for the Social Security portion of payroll and self-employment tax.
• A Solo 401(k) lets a 1099 physician contribute far more than a standard employee deferral, which changes the after-tax comparison between structures.

A simple system that prevents surprises

Think of your tax set-aside like rent. It lands in your account first, and it was never yours to spend. For untaxed income, move 25% to 30% into a separate account the day it arrives, and pay quarterly estimates on time. If you are W-2, review your W-4 in your first attending year so withholding reflects your new bracket.

The behavioral layer

Two patterns drive the April surprise. Present bias makes the full deposit feel like spendable income, so the set-aside never happens. Overconfidence makes a busy physician assume the numbers will sort themselves out. A system handles both, because it removes the monthly decision.

Your next step

If this is your first full year of attending income, the time to plan is before the bill arrives, not after. Book a 15-minute complimentary discovery call and we will map your set-aside and your structure.

Why do new attendings owe so much in taxes?

Withholding from a mid-year pay jump usually assumes a lower full-year income, so not enough is withheld. The gap appears as a balance due in April, and 1099 income has no withholding at all.

How much should a physician set aside for taxes?

For untaxed or 1099 income, setting aside 25% to 30% of each payment is a reasonable starting point. Your exact rate depends on your bracket and your state.

What changed for physician taxes in 2026?

The QBI deduction rises to 23% for eligible self-employed professionals, and the Social Security wage base increases to $184,500.