Year-End Tax Planning for Physicians: What Has to Happen Before December 31

Recap of Spencer Carroll, CPA, on the Money Meets Medicine podcast with Dr. Jimmy Turner, an anesthesiologist and Gelt client. Money Meets Medicine is a Gelt partner. General education, not tax advice. Figures reflect the 2026 tax year.

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Dr. Jimmy Turner expected a 2025 tax bill of $10,000 to $20,000. It came in at $36,000. "The part that actually bugged me wasn't the number," he said. It was finding out in the spring, when all he could do was write the check.

That's the case for year-end tax planning for physicians. Filing looks through the rearview mirror. Strategy looks through the windshield, and most of it stops on December 31. Jimmy brought Spencer back to cover what closes at year-end, what can wait, and how to tell whether your CPA is planning or just filing.

If you're a W-2 physician

This was the top listener question. Spencer, a W-2 employee himself, was direct: the moves are real but smaller. The standard levers:

• Max your 401(k) or 403(b): $24,500 for 2026, plus catch-up at 50 or older.
• Backdoor Roth IRA, and a mega backdoor Roth if your plan allows it.
• HSA contributions on a high-deductible plan, and 529s for your kids.
• Tax-loss harvesting and giving appreciated stock instead of cash.

Spencer's own example: he moved appreciated stock with a $10,000 gain into a donor-advised fund instead of selling it, avoiding roughly $2,000 in capital gains tax. It won't show up on this year's return, but it's real money. (See our donor-advised fund guide.)

Bigger savings usually need income outside the W-2. Many doctors already have some: chart reviews, locums, med-mal expert work, moonlighting. That opens deductions and a solo 401(k). Just don't expect a side business to erase your W-2 taxes. "You're never penalized for making more money," Spencer said. The goal is to pay tax on less of the extra income, not none of it.

New for 2026: a charitable deduction without itemizing

Starting with 2026 returns, standard-deduction filers can deduct cash gifts to qualifying charities: up to $1,000 single, $2,000 married filing jointly. It's especially useful for residents. The catch: cash to public charities only. Donor-advised fund gifts and non-cash donations like clothes don't count.

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What has to happen before December 31

Most physicians are cash-basis taxpayers, so an expense counts when the money leaves your account:

• Business expenses. Pay this year to deduct this year. Prepaying annual software counts. Having a strong year? Invoicing a December job in January pushes that income out.
• Paying your kids or spouse. If you hire family for real work, pay them before year-end. For a spouse, the benefit usually comes from their own solo 401(k) contribution.
• Solo 401(k) employee deferrals. Generally elected by December 31. Sole proprietors opening a first plan get extra time under SECURE 2.0, so ask your CPA.
• Tax-loss harvesting. Sell losers by December 31 and watch the wash-sale rule.

What can wait until April (or later)

• Employer solo 401(k) contributions and a new cash balance plan: up to your filing deadline, including extensions.
• IRA, backdoor Roth, and HSA contributions for 2026: until April 15, 2027.

One HSA rule surprised Spencer himself. He opened his HSA midway through 2025 and assumed he could only contribute for those months. Under the last-month rule, if you're eligible on December 1, you can contribute the full year's amount, as long as you stay eligible through the next year. Small on its own, but as Spencer put it, stack enough of these decisions and the savings add up over a career.

Why doctors get surprise tax bills, and how a Q4 projection helps

Jimmy's surprise came from his own numbers: higher income phased him out of the QBI deduction, which phases out for high earners in fields like medicine. Nobody told him until April. Then the April check stacked last year's balance on top of this year's first estimated payment.

A Q4 projection catches that. At Gelt it's standard: we gather year-to-date numbers, essentially prepare the return early, and compare it with what you've paid. The goal is no surprise bill and no surprise refund, which is just your own money returned without interest. Timing matters, because a big January 15 estimate doesn't erase underpayments from earlier quarters. (More in our quarterly estimated taxes guide.)

That's the real difference between a compliance CPA and a strategy CPA. One reports the score after the game. The other helps you change it while you're still playing.

Frequently asked questions

What year-end tax moves can W-2 physicians make?

Max 401(k) or 403(b) contributions, make backdoor Roth contributions, fund an HSA, harvest tax losses, and give appreciated stock through a donor-advised fund. Bigger savings usually require 1099 income such as chart reviews or locums.

What is the solo 401(k) deadline for physicians?

Employee deferrals ($24,500 for 2026, plus catch-up at 50+) generally must be elected by December 31. Employer contributions can wait until your filing deadline, including extensions.

Can I deduct charitable gifts if I take the standard deduction in 2026?

Yes. Non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying public charities. Donor-advised fund gifts and non-cash donations don't qualify.

What is the HSA last-month rule?

If you're HSA-eligible on December 1, you can contribute the full year's amount. You must stay eligible through the following year, or part of it becomes taxable with a penalty.

Don't wait for April

If you have 1099 income, real estate, or med-mal work, the weeks before December 31 are when a plan can still change your number. Talk to a Gelt strategist about a Q4 projection.