By Katherine Vessenes, JD, CFP®

How confident are you actually feeling about your taxes?

Katherine Vessenes, CEO and Founder of MD Financial Advisors, sat down with Vivian Le, CPA and Founder of PIP Tax and Consulting to discuss the complexities of taxes for doctors. In this latest episode of More Money Minutes for Doctors, they cover common mistakes you should avoid, how to optimize or even reduce your tax bill, changes to taxes from the One Big Beautiful Bill Act (OBBBA), and more. Follow along with the transcript below.

The following transcript has been edited for clarity and grammar.

Katherine: Welcome back doctors! How confident are you actually feeling about your taxes, particularly in 2026? Today we have a very special guest, my dear friend Vivian Le. She's a CPA who started PIP Tax and Consulting in Dallas. She works with a lot of doctors and she's going to be giving us the inside scoop on taxes for doctors.

K: Once again, welcome back to More Money Minutes for Doctors. I'm your host Katherine Vessenes. I'm also the CEO and founder of MD Financial Advisors. Before we get started, listeners, if you've got any further questions or there's something you want us to cover in a future episode, please reach out to us. You can do that at info@mdfinancialadvisors.com. If you have some questions for Vivian, we'll give you her contact information at the end so you can reach out to her. I’d consider it a personal favor if you would like, subscribe, and follow us on social media at MD Financial Advisors.

K: Alright! So, tell us, Vivian, a little bit about your background.

Vivian Le: Thank you, Katherine. Thank you so much for sharing your platform and allowing me to share my perspective on taxes and the current developments like the OBBBA, which you'll hear me refer to a lot in our session.

V: I'm Vivian Le. I am the CPA and founder of PIP Tax and Consulting here in Dallas, Texas. I've spent nearly 20 years in tax accounting with experiences across national, regional, and boutique firms. I built my firm around 3 pillars: the personalized, innovative, and proactive, hence the PIP in my company name. Busy physicians and dentists don't really have time for tax surprises.

V: I'm an SMU alum. I started my career in financial services at a top national firm here in Dallas. Over the years my background of cost accounting, real estate, and financial services has really shaped a more holistic approach. We're not just filing returns; we're aligning entity structure, cash flow, retirement planning, and tax strategies. I love working with financial advisors, like yourself, so we can collaborate and provide tailored client service to our physicians and dentists. Today, I focus and specialize in working with healthcare professionals, especially practice owners. I help them keep more of what they earn and stay focused on patient care.

V: Just a quick note before we begin. This podcast is for general education purposes only. It's not individualized tax advice, so as always, please discuss with your tax advisor how this can apply to your specific situation.

K: I love that disclaimer, because we have to give a lot of them for our friends at the SEC. That’s one of the things that’s going to be at the end of the end of the podcast.

K: Alright, let's get started. What do you see as common tax problems doctors make?

V: Most of the ones that I will be mentioning here aren't really big tax tricks. They're more like small compliance details that can really cost big money if you ignore them. Number one is misclassification of employment status. Doctors often work in arrangements where they receive both W2 wages and 1099 income as independent contractors, so misclassifying income or misunderstanding the nature of the relationship can really lead to incorrect tax and reporting. Oftentimes doctors with income from consulting, speaking, digital health platforms, or product endorsements must carefully report that income, which may be subject to self-employment tax, in addition to their W2 wages and keeping track of certain business deductions.

K: Yeah, let me just make a comment about that. We have a lot of doctors in that situation. They've got 1099 income and don't realize that they have not had any taxes withheld from this income. I can think of one emergency medicine doctor we had who was moonlighting. It was a lovely year for her. She made $90,000 or something similar in this moonlighting job, and lo and behold, she had a $30,000 tax bill which was roughly 1/3 of her 1099 income. She hadn't escrowed for taxes. This is such a big problem for doctors with 1099, that one of the things we recommend that they do is they set aside a separate “tax account” and that money is not yours. It really belongs to Uncle Sam. You might as well set it aside now so it's there on April 15th.

K: You had some other common tax problems that you wanted to cover?

V: The next few items relate to doctors who have their own practice and have an S-Corp as their entity structure. The first one that is a hot IRS red flag is owners who are actively working in their practice and not paying themselves as salary or paying themselves something unrealistically low and taking the rest as distributions. We need to be extra careful with that, it’s a big hot IRS issue.

K: Let's talk about that, because it's very typical that they come up to the Social Security limit, which you'll have to tell me what it is. I don't remember what it is this year.

V: Yeah, $182,000 or $183,000. They change it every year, but in that same ballpark.

K: Typically they take a salary from the practice of about $182,000 that gets them the maximum Social Security benefit, which is very very helpful. Any amount over that they take as a “distribution”, which they'll be less taxed on meaning they didn't have to pay the FICA tax on the amount over that. But you said you're seeing some problems with the IRS coming down on this?

V: Yeah, we've had doctors who pay themselves $50,000 or $60,000, which is in my opinion unrealistic. If they went out as an associate working for a hospital, there's no way that they're only making $50,000 unless they're in residency, right?

K: Right, yeah

V: That's a professional judgment right there that you need to pay yourself a reasonable salary.

K Work with your accountant on this if you can.

V: Exactly

K: I know that my accountant recommends going up to the maximum Social Security limit, and then taking the rest as distributions, but once again work with your accountant to make sure it’s the correct option for you.

V: You mentioned distributions, which takes me to my next point: taking distributions in excess of basis. I don't want to go into all the technical calculations on what is basis, but your CPA should be keeping track of basis and letting how much you can take out in a given year. That way, you don't take distributions in excess of your basis, and those tax-free distributions become taxable subject to capital gains. I think that's another area that you really need to be mindful of.

K: Do you have any other common tax problems?

V: Yes, the 2% shareholder health insurance not being reported correctly on W2 wages. Oftentimes the S-Corp will pay for the doctor's health insurance, but that income is not being reported as wages on their W2. It's very common that I have a new client and I don't see that on there. Just make sure that your CPA is properly reporting shareholder health insurance.

K: That's a good point. Any others?

V: The next one is commingling personal and business expenses. It's a classic. For meals, just make sure you have the who, what, when, where, and business purpose. Take a snapshot of your receipts. Upload it to your accounting software. Have a mileage log. There are many, many apps out there that can keep track. Just keeping good documentation and making sure you're not commingling personal and business expenses is important.

K: One of the things we recommend is that you have a separate account that you write all your business expenses out of and a separate credit card so you only use those for business. You keep it entirely separate from your personal and it makes things a lot easier having to go back at the end of the year and sort through every single transaction.

V: Absolutely! The last one is shareholder loans. When you take those excess distributions, we classify some of those distributions as shareholder loans. Make sure that you're charging interest and paying back in the appropriate time. Having a quick, simple promissory note is advisable just to keep things at an arm’s length.

V: Last but not least, partners who are part of a medical dental group, if you're a partner receiving a K1, you cannot be on the payroll. That's also a big no-no. You will receive guaranteed payments which get reported on your K1, but you cannot be a W2 employee of that partnership.

K: Awesome! I can see it's important to have the right kind of CPA to help guide you through these quagmires, because the last thing anybody wants is an IRS audit.

K: Next question, I found a few of our doctors, beloved though they are, are procrastinators. When you get those doctors that just can't seem to get their taxes done or done on time, do you have any suggestions for them to make it easier?

V: Honestly Katherine, I think the best strategy is having the right CPA or advisor who politely, persistently bugs you, like me. We get it. Doctors are busy. The goal is to make sure that we have that relationship where I can keep them on track and make it easier for them to finish than to procrastinate. That means streamlining the process, setting up a secure portal, setting automatic reminders, just helping them stay on task, and stay organized. I do strongly believe that they want to get things done, but they're very, very busy. Just having someone keeping them on track and staying on top of things that will come up along the way, I find that strategy to work well. “Let me just upload these so Vivian can go away.”

K: The whole accountability thing, it's like having a personal trainer or coach that you have to report to. I think that's really important.

K: Any other thoughts on that before we go to something that a lot of our doctors are worried about, the OBBBA and other hot tax issues? Anything else on the procrastination side?

V: For myself, I schedule quarterly meetings and keep sending reminders. Right now I'm already sending out client request lists. Do you have any suggestions? You really helped me stay on track to do this podcast, so I really appreciate that. You're kind of like my mentor. “Vivian, we have to do this.” I think it's really important to have not only self-accountability, but also someone who helps you keep you on track and stay focused.

K: I love it! Thank you! There are a couple of things that we do personally in our business. My husband and I actually own more than one business, and we've got some other complexities but in MD Financial, we literally meet every week to look at the financial pieces. What's the revenue? What are the expenses? We have projections for this year and into next year, so there really aren't a lot of surprises for us. We use this spreadsheet with our CPA. I meet with him a couple of times throughout the year, but the most important meeting is the one late in the year where he really pulls everything together for me and kind of gives me a rough estimate of what kind of check I'm going to be writing. My goal is to make that check fairly small, not just from reducing taxes, but from the surprise. We'll meet towards the end of the year and he'll kind of rough out what he thinks the corporation taxes will be and what the business taxes will be. It's a huge stress labor, because one thing that upsets clients is surprises and nobody wants a tax surprise. Plan ahead.

K: If you're a doctor who has your own practice or maybe you've got some sort of side gig and you're getting up there in income, I think you should engage Vivian or somebody like her to create that kind of spreadsheet for you. Then you can really see monthly (or weekly if you want) where you are at and how things are going. That would be my suggestion: forecasting.

V: Absolutely! I completely agree with that. That's why in December, I try to meet with all of my clients. I send out emails and most of them respond, but not all. You're very engaging with your CPA. In order for the relationship to work, I think the engagement needs to be present on both ends. You do your homework, I do my homework, and then we get together and we compare notes.

K: Alright, on to the hot tax issues and the OBBBA. What do doctors need to know about that?

V: The first big one is, if you're upgrading your operatories, buying imaging equipment, replacing computers, investing in practice software, or even doing a remodeling or a build out, 100% bonus depreciation is back. That means that many qualifying purchases can potentially be written off much faster, sometimes immediately, rather than spread out over many years. When you combine that with section 179, expending it can make a big difference in the year you buy your equipment. Katherine, I think the key is don't wait until December and do a panic buy just for the tax write-offs. If you're planning a major purchase, time it intentionally as part of the strategy. You don't want to buy equipment just for the tax write-offs. It has to make economic and financial sense as well.

K: Let me just comment about that, because I had some doctors who didn't have maybe as ethical accountants as you. They tell the doctors, “Oh it's getting to the end of the year. You need to use this stuff up. Go buy a new car.” They didn't need a new car.

V: I hear that a lot, too. A car is a depreciable asset. It doesn't really bring you revenue. When you invest in an equipment, it generates revenue. Right there's a return on investment (ROI). That car gets you from point A to point B, but it's a depreciable asset, which works for taxes, but from an economic value, there's no revenue.

K: I completely agree with you. You want to invest in either equipment or other investments like maybe a brokerage account. You won't get the tax benefit but you're going to have an asset that will grow over time. Be careful if your accountant is telling you just to buy stuff for tax purposes.

V: Or you go buy a luxury car and those have all kinds of limitations, so we're not even getting a full writeoff. And there is a business/personal use aspect to that. I would never recommend to my clients to go buy an automobile.

V: The second thing is innovation inside medical practice. When most people think of research and development (R&D), they think of Silicon Valley or startups, right? In healthcare, it can show up in clinical research, improving internal systems, building software tools, or working on a medical device on the side. The take away is not everyone will qualify, but at least if you smell something like innovation, just let your CPA know early. Some of those expenses can qualify for the R&D credit. Let your CPA determine if they qualify for the R&D credit. That could be something very beneficial for you to reduce your tax liability.

K: I'd also ask them, “Are you better off purchasing it outright, buying it over time, or leasing?” Those can all have different tax consequences depending on the years.

V: Yes! You know your tax stuff, Katherine. That's really good.

K: I know! Shocking after all these years!

V: So the third thing on my list is the state taxes. There's a temporary relief. The state and local tax deduction cap is now up to $40,000 from $10,000, however I'm pretty sure most of your clients fall in this $500,000 phase out category. You just have to be very careful about that, but there is a workaround. The pass-through entity (PTE) tax election, which can be very beneficial for practice owners who are set up as partnerships or S-Corps. In a nutshell, what the PTE election is, it's basically the business elects to pay the taxes, the state tax and the state income tax, at the entity level instead. When the business pays the taxes, it’s treated as a deductible business expense, which reduces the income that flows through to the S-Corp shareholders or partners. Then you can take a credit, kind of like they think of it as a prepayment of taxes or withholdings to offset your state income tax. Even though you're getting phased out and not benefiting from the state tax deduction, you can indirectly benefit at the entity level if you have ownership. Every state has different state-specific rules surrounding this and not all states adopt this PTE election, so as always consult your CPA to make sure that the jurisdiction that you're in allows for this workaround.

K: Good to know! Anything else with hot tax issues?

V: Yes, the charitable giving is also a big one. There's half a percent of the AGI floor, which means that if you're making these little donations, those won't matter anymore. I would aggregate and make sure that you make a big charitable donation in one particular year instead.

K: Let's go into that with a little more detail. What you're saying is those charitable deductions that are above half of a percent of your gross income can be deducted going forward. One of the things we were recommending to clients towards the end of last year was if they were planning some big charitable deductions in 2026, to make them in 2025 because more of that would be deductible. I love your idea of bunching them. How that might work is maybe you're planning some large charitable deductions in 2027, but if you move those into 2026, they might be able to deduct more.

V: Right, exceed the floor. If you donate to Goodwill, Salvation Army, your church and spread it over three years, the aggregate sum of those charitable donations might not exceed half a percent of your AGI because you're at such a high income threshold. Those won't matter so you're just losing those donations. The planning, and being strategic about it, and the donor advice fund, it’s important.

V: I don't know if you're familiar with the donor advice fund. It’s a great way to give away appreciated stocks and you don't have to pay capital gains. That's one thing that I would love to work with financial advisors and make sure that clients are taking advantage of. The Trump Accounts will start around July 4th of this year (2026), so more guidance coming on that. If you're a practice owner, you can look into creating some type of employee benefit plan and take a deduction that would probably help to retain employees and even attract prospective employees.

K: Awesome! Good to know. Moving on to the last thing. What are three things doctors can do now that either can reduce their taxes or maybe optimize their taxes in 2026?

V: Like I mentioned, if you're a practice owner, you map out big decisions early, equipment purchases, technology updates, building time out, and state tax strategy. Take advantage of the 100% depreciation. I think that planning is really about timing and execution and not last minute scrambling.

V: Number two is simple, but really important. You mentioned this as well Katherine. Keep up with your books. Clean books and up-to-date bookkeeping gives you a real financial snapshot. That way we can project your income, avoid surprises, and make smarter payroll and distribution decisions. Clean books are the foundation for everything so make sure that you're keeping up with that or if you have an accountant or bookkeeper, make sure that when they send you the financials you actually look at them and not just file them away.

V: Last but not least is retirement planning. I know that maxing out your 401K if you are a solo practitioner, look into the solo 401Ks with in-plan Roth conversions. This is probably your expertise right here, Katherine, but a lot of my clients have very high income so they're pretty much phased out for all the tax credits. Our main tax strategy and planning is around retirement, and I think that's where the collaboration between CPA's and financial advisors are very important. I have a lot of clients who have a lot of excess cash, so we look into a defined benefit plan and more higher power options for them than just the solo 401K's. I do like SEP IRAs because they're simple, they're quick to set up, very minimal administrative burden, but again those are limited to your W2 wages. If you're maximizing retirement, SEP IRA's might not always be the best tool. Do you work a lot with mega Roth conversions?

K: Yes, we do and one of the tools we have is some software that can take a client's rough tax situation and then we can look at how many conversions we can do this year without getting them up into the next tax bracket. That’s one of the things we like to do for clients. We model it out on our software to see if it makes sense. I like to do that in conjunction with the CPA so that they bless it, because we're not tax preparers. We do big picture tax advice, and I want to make sure that it really fits with clients.

K: I have a case with a lovely, wonderful client. She's maybe 72 and at the top earnings of her career. She has no money in the tax-free bucket. She has no Roths at work, no Roth IRAs. It made no sense to me to do any conversions for her, because she's already in a really high tax bracket and she's going to be retired in a couple of years. Very often, we'll wait till they're retired, and often they're retired a couple of years before they have required minimum distributions, so their income is really down during that time period. That's when we might do a lot of Roth conversions and more and more clients are getting mega backdoor Roth options at work, so obviously we want to take advantage of those too.

V: Yes, those are great. Those are very powerful retirement vehicles.

K: The other thing I think you mentioned, and why I really like working with you, is I think most accountants have a backward view: “This is what you did this last year, let's figure out how we can get your taxes as low as possible”. It's after the fact. You've already pulled the trigger on that. My viewpoint is how do we look in the future, and how do we not only reduce taxes in the next year but also in retirement. This is a piece most clients have not considered. Our clients think they're going to be in a lower tax bracket in retirement. Well, maybe, but a lot of them are going to be in the same tax bracket because they have such wealth and they want the same income. So it's a shock to them to realize. If we start early, we can start getting more money in that tax-free bucket and that really helps reduce their taxes in retirement. It's a very difficult strategy for me to do if you're 70 and you're retiring at 72. But, if you're a 35 or 40 year old doctor, then I've got years and years that we can put this in place and really have a huge impact.

V: I completely agree with you, Katherine. I have a few physicians who are now retired and they live comfortably. The reason why is because they planned ahead in their 30s and 40s and as much in retirement savings as possible. Now they’re playing golf and just living the life. It's a powerful strategy. I think that myself as a CPA cannot do it alone.

K: I love that! It sounds like you're willing to work with the doctor's financial advisor to make sure that they get everything coordinated.

V: Of course! I talk about the solo 401K, the mega backdoor Roth and all of that. I know the logistics, and how they work, and the tax implications, but the execution- that's not what I do. I want to stay in my room and refer to a professional and expert like yourself and your firm and your team. The execution is very important. You also mentioned that you have all these softwares and modeling that can map it out, but again, you also need to work with the CPA who has more knowledge of the tax situation that your clients are in.

V: In the past, I didn't really get introduced to the financial advisor and the client would think, “Oh I'm below the Roth threshold. I can make a contribution”. Then when it comes to tax time, they exceeded the contribution limit, so we're over here trying to take that excess out so they're not subject to the excise tax. I think having that communication and making a quick check in to avoid having to unwind things is really helpful. Sometimes when you unwind and reverse things it can be costly to the clients. That's not really good client service.

K: Very costly and with penalties, tax penalties nobody wants. I think preparing in advance for lower taxes and retirement is really important, but also it's more important every year in retirement that you think through where are we going to pull our money out this year. Are we going to pull it out of the brokerage accounts? Are we going to pull it out of the retirement accounts? Do we have an RMD? Do we pull it out of our tax-free Roth accounts? Each of those has different tax consequences and it's not so obvious where to pull the money out. Once again, our software is very sophisticated. It can actually show if we take your living expenses this year all out of your brokerage account, what that does to your assets over the long run. Those are very important decisions. You have to look at them every year, because the tax laws change and the stock market changes. You really need somebody who can help you plan for that.

V: One last thing is the estimated tax payments. I try my best to give my clients at least 15 days to a month of advance notice, because they don't have liquid cash sitting in their bank account. You mentioned having a separate tax account, but a lot of them have to write a large tax bill. We don't want that money just sitting there idle, so giving them that advance notice will help the financial advisors liquidate from stocks and make sure that they have enough funds to pay Uncle Sam. With anything, last minute is never a good thing.

K: Truer words were never spoken, particularly when it comes to taxes. Vivian, thank you for being with us today and you've donated your time so that our doctors can get this great information. I'm really grateful to you, so thank you for being so generous.

K: For those of you who are listening please follow us on social media. I'm really hoping this was helpful, and if it is, please pass it on to your colleagues.

K: Now, Vivian, how can our doctors get a hold of you if they've got some questions for you?

V: On my website, they can send an inquiry or I can share my e-mail address. https://piptaxandconsulting.com, and then if they want to send an e-mail they can do that at vivian@piptaxandconsulting.com.

K: Awesome! Once again to our listeners, please reach out to us for questions or topics that you think would be good in a future podcast, and finally you can reach out to us directly if you've got any questions for us and my team at info@mdfinancialadvisors.com.

K: In closing remember only you can take care of you, so plan, protect, and prosper.

Listen on Apple Podcast, Amazon Music, or Spotify.

1-888-256-6855

Remember that you can send us any questions at: Info@MDFinancialAdvisors.com

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 600 doctors from Hawaii to New York. An experienced Financial Advisor, Attorney, Certified Financial Planner®, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at Katherine@mdfinancialadvisors.com.

MD Financial Advisors is not affiliated with and does not receive compensation from PIP Tax and Consulting; clients are free to select any tax professional.

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, here. Past performance is not a guarantee of future results.