Physician Year-End Tax Planning Checklist 2026

Tax values verified against 2026 IRS limits (Rev. Proc. 2025-67, IR-2025-244) and post-OBBBA rules. For informational purposes — see a fee-only advisor for guidance specific to your situation.

Why Q4 matters more for physicians than most

Most high-income professionals can do meaningful tax planning by April 15. Physicians can't — the majority of physician tax moves have hard December 31 deadlines. A 401(k) employee deferral must clear payroll before year-end. A Roth conversion executed on January 2 is a different tax year entirely. Tax-loss harvesting trades must settle. Charitable contributions must be in donor-advised funds by December 31 to count for this year's deduction.

At a physician's marginal rate — typically 32% to 37% federal plus state — a $50,000 swing in taxable income is worth $16,000 to $18,500 in federal taxes. The moves below are the ones fee-only advisors who specialize in physician finances work through in Q4 every year.

1. Maximize tax-deferred retirement accounts

Every dollar of pre-tax 401(k), 403(b), or 457(b) contribution directly reduces your taxable income. At the 37% bracket, $24,500 in deferrals saves $9,065 in federal taxes this year alone — plus state income tax savings on top.

For hospital-employed physicians (W-2)

• 401(k) or 403(b) employee deferral: $24,500 in 2026 (base), $32,500 if age 50–59 or 64+, $35,750 if age 60–63 (super catch-up)¹
• 457(b) plan (common at nonprofit hospital systems): a completely separate $24,500 limit — stacking these two doubles your pre-tax space. A hospital physician with both plans can defer $49,000/year minimum.
• HSA: $4,400 (self-only) / $8,750 (family) in 2026 if enrolled in a qualifying HDHP²

Action: check your year-to-date deferrals now and adjust your contribution percentage for the remaining payroll cycles. Most payroll systems close enrollment changes in late November or early December.

For 1099 physicians and practice owners

• Solo 401(k) total: Up to $72,000 (2026) combining employee deferral ($24,500) plus employer profit-sharing (up to 25% of W-2 compensation from the S-corp or 20% of net SE income for sole proprietors)¹
• Super catch-up stacking: Ages 60–63 can reach $83,250 total in 2026
• New plan adoption deadline: December 31, 2026 — if you have 1099 income this year and no solo 401(k), you must adopt the plan by December 31 to contribute employee deferrals for 2026. Employer profit-sharing contributions can be made up to the business tax filing deadline.

Cash balance plans

If you are age 45+ with significant self-employment income, a cash balance plan on top of a solo 401(k) can shelter an additional $100,000–$300,000+ per year. Contributions must typically be made by December 31 (or the tax filing deadline depending on plan design). If your advisor has been discussing a cash balance plan, Q4 is when this becomes urgent — actuarial work takes time. See our cash balance plan guide for the age-based contribution table.

2. Roth conversions — act before December 31

A Roth conversion moves money from a Traditional IRA (or 401(k) at a prior employer) into a Roth IRA. You pay income tax now, but all future growth is tax-free — and no required minimum distributions during your lifetime.

December 31 is the hard deadline. Conversions cannot be backdated to a prior year (unlike IRA contributions).

When to convert as a physician

• Residency / fellowship: This is the best Roth conversion window for most physicians. Your taxable income is $60,000–$90,000 — you may be in the 22% bracket. Converting $20,000–$40,000 during residency locks in those tax rates before 30 years of compounding happens at 37%.
• Transition year: If you left a job in 2026 and had a gap in income, your taxable income this year may be lower than normal. A partial conversion to fill up the 24% bracket can make sense.
• Pre-Medicare bracket targeting: For physicians approaching retirement (ages 60–64), the window between leaving practice and starting RMDs + Social Security is often the lowest-income period. Detailed modeling by your advisor can identify the optimal conversion amount each year to minimize lifetime taxes.

IRMAA warning for attendings

Medicare uses your income from 2 years ago to set your premiums. If you are age 63 or older and approaching Medicare eligibility, a large Roth conversion this year affects your 2028 Part B and Part D premiums. The 2026 IRMAA brackets trigger surcharges starting at $106,000 (single) / $212,000 (MFJ) of MAGI — though you'll want to check 2028 thresholds when available. See our IRMAA physician guide for bracket details and planning strategies. Don't convert past a cliff without modeling the IRMAA cost first.

3. Backdoor Roth IRA

Physician attendings filing MFJ phase out of direct Roth IRA contributions between $242,000 and $252,000 of MAGI (2026). Above $252,000, direct contributions are not allowed. The backdoor Roth is the workaround: contribute to a non-deductible Traditional IRA and then convert it to Roth.³

• 2026 IRA contribution limit: $7,500 per person (under age 50); $8,600 if age 50+ (base $7,500 + $1,100 inflation-indexed catch-up)¹
• Deadline for 2026 contributions: April 15, 2027 — but converting in a different calendar year from the contribution creates a "straddling" situation that complicates Form 8606. Most advisors recommend completing both contribution and conversion by December 31 of the same year to simplify reporting.
• Spousal backdoor Roth: Each spouse has their own IRA — a married physician couple can do $15,000–$17,200 in backdoor Roth contributions per year combined.

Pro-rata trap: If you have pre-tax Traditional IRA assets (from a rollover IRA or prior deductible contributions), part of your conversion will be treated as taxable. The solution is to roll your pre-tax IRA into your current employer's 401(k) before December 31 if the plan accepts rollovers. See our backdoor Roth IRA guide for the full mechanics and worked examples.

4. Tax-loss harvesting

Tax-loss harvesting means selling taxable investments that are down from your cost basis to realize losses. Those losses offset capital gains elsewhere in your portfolio — or, if losses exceed gains, up to $3,000 can be deducted against ordinary income per year (with excess carrying forward indefinitely).

For physicians with investment portfolios, this is most relevant if you hold individual stocks, sector ETFs, or real estate investment trusts in a taxable brokerage account. Pure index-fund portfolios in broad market ETFs tend to have limited harvesting opportunities in flat-to-up years.

Deadline: trades must settle by December 31. For most securities, settlement is T+1 (next business day), so your last trading date is effectively December 30, 2026 for end-of-year harvesting.

5. Charitable giving

The 2026 standard deduction is $32,200 for married filing jointly ($16,100 for single).⁴ Most physician households take the standard deduction because their itemized deductions — primarily mortgage interest and state/local taxes — don't exceed $32,200. This means a single-year charitable donation provides no additional tax benefit.

Bunching into a donor-advised fund (DAF) solves this: contribute 3–5 years of planned giving into a DAF in a single year. You get the deduction this year (up to 60% of AGI for cash, 30% for appreciated assets), claim itemized deductions this year, and take the standard deduction in future years. Grants to your chosen charities can be made over time from the DAF.

• Donate appreciated stock: Contribute long-term appreciated stock to the DAF rather than cash. You avoid capital gains tax and NIIT (potentially 23.8%) on the appreciation, and deduct the full fair market value. A physician holding $50,000 of employer stock with a $5,000 cost basis can save $10,700 in capital gains taxes by donating the shares rather than selling first.
• Age 70½ or older — qualified charitable distribution (QCD): Transfer up to $111,000 directly from your IRA to charity (2026 limit)⁵. QCDs are excluded from income entirely — they don't show up in AGI, which means they don't trigger IRMAA surcharges, don't affect Social Security taxation, and satisfy your RMD obligation.

Deadline: Cash donations and DAF contributions must be made (or postmarked) by December 31. QCDs must be distributed from the IRA by December 31. See our physician charitable giving guide for the DAF bunching strategy in detail.

6. Practice owner moves

Equipment and bonus depreciation

The OBBBA restored 100% bonus depreciation permanently for qualifying property placed in service after January 19, 2025. If you are a practice owner and have planned equipment purchases — a digital X-ray system, ultrasound machine, EMR hardware, or clinic buildout fixtures — getting them placed in service by December 31, 2026 means deducting the full cost this year rather than depreciating over 5–7 years. At a 37% rate, a $120,000 equipment purchase generates a $44,400 deduction this year rather than ~$8,400 in year one under MACRS.

Accountable plan reimbursements

If your practice operates an accountable plan to reimburse business expenses (CME, malpractice premiums, home office, professional subscriptions), submit all 2026 expense reports before year-end. Reimbursements paid after December 31 using 2026 expenses may still be deductible by the business in 2026 if under the plan — but clean up the paperwork now while the year is fresh.

S-corp salary review

If you elected S-corp status, December is when you should verify your W-2 salary is set correctly. The salary must reflect "reasonable compensation" — typically 35–50% of net S-corp income or an industry benchmark. Underpaying the W-2 salary saves FICA now but creates IRS audit risk; overpaying costs SE tax unnecessarily. The right salary also affects how much you can contribute to a solo 401(k) (employer profit-sharing is limited to 25% of W-2).

7. Student loan and PSLF timing

If you are on IDR (Income-Driven Repayment) or pursuing PSLF, year-end Roth conversions or other income-increasing moves have downstream consequences. IDR payments are recertified annually based on your AGI. A $50,000 Roth conversion in 2026 increases your 2026 AGI, which increases your 2027 IBR or RAP payment.

• PSLF employment certification: Submit your annual Employment Certification Form if you haven't already done so for 2026. The PSLF tracker is most accurate when updated annually.
• IDR recertification timing: If your recertification is due in Q1 2027, consider whether your 2026 income has changed materially and whether early recertification with family size changes makes sense. See our PSLF calculator to model payment trajectories.
• Roth conversion for PSLF pursuers: Converting while on PSLF raises your AGI and thus your income-certified payment. However, PSLF forgiveness is tax-free under IRC §108(f)(1), so the calculus is complex. For residents with 10+ years to PSLF forgiveness, small Roth conversions during residency are usually still worth it — the bracket gap is large and the payment impact on resident-level IBR is minimal.

Key deadlines — 2026 year-end calendar

A note on sequencing

Not every move applies to every physician. Residents on PSLF probably should not make large Roth conversions this year if it raises their IDR payments. High-income attendings with no 457(b) access should max the solo 401(k) before considering a cash balance plan. Physicians in the 24% bracket get less benefit from pre-tax deferrals than those at 37%.

The right sequence for your situation depends on your income, family size, loan situation, and timeline to retirement. This checklist covers the full universe of moves — an advisor who specializes in physician finances can model which ones actually help you for 2026 specifically.

If you have 1099 income and haven't adopted a solo 401(k) yet, that is the most urgent item: the December 31 deadline is firm and creates an irreversible annual benefit.

Sources

1. IRS IR-2025-244 — 2026 Retirement Plan Contribution Limits. 401(k) employee deferral $24,500; solo 401(k) §415 total $72,000; IRA limit $7,500 ($8,600 if age 50+). Catch-up provisions for ages 50–59, 60–63, 64+ per SECURE 2.0 §109.
2. IRS Notice 26-05 — 2026 HSA and HDHP Limits. HSA contribution: $4,400 (self-only), $8,750 (family). Catch-up $1,000 for age 55+. HDHP minimum deductible: $1,700/$3,400.
3. IRS — Traditional IRA Deduction Limits and Roth IRA Phase-Out Ranges. 2026 Roth IRA phase-out: $153,000–$168,000 (single); $242,000–$252,000 (MFJ). Form 8606 governs non-deductible contributions.
4. IRS Rev. Proc. 2025-67 — 2026 Tax Inflation Adjustments. Standard deduction: $32,200 MFJ, $16,100 single. Top bracket (37%): taxable income above $751,600 MFJ / $626,350 single.
5. IRS — Qualified Charitable Distributions. 2026 QCD limit: $111,000 per individual. QCDs excluded from gross income and satisfy RMD requirements. IRC §408(d)(8).

Tax values verified against 2026 IRS limits (Rev. Proc. 2025-67, Notice 26-05, IR-2025-244) and OBBBA (enacted July 2025). Tax law changes frequently — confirm current limits with your advisor before acting.