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Doctors, Are You Tipping Uncle Sam? Avoid These Common Errors, EP 34
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Many physicians don’t realize they’re leaving extra money on the table by “tipping” Uncle Sam through simple, avoidable tax mistakes. While it’s easy to assume your accountant has everything covered, the truth is even experienced professionals (and software) often miss key physician-specific issues. This episode shines a light on common errors doctors make, from mishandled Backdoor Roth contributions to missed 1099 forms and state tax complications. If you’ve never double-checked these items, you might not even know you’re paying more than you should.
Recognizing these pitfalls is the first step toward smarter tax management. We talk through why backdoor Roth errors are so prevalent, like incorrect Form 8606 filings or failing the pro rata rule, and how even seasoned accountants may overlook them if they’re not used to working with doctors.
We also explain how underpayment penalties happen (especially with 1099 or K-1 income), why S-corp elections are often misused or badly set up, and how moving states complicates your filing. These aren’t just minor technicalities; they can mean real dollars lost.
Finally, we give practical advice for catching and avoiding these errors, stressing the importance of proactively reviewing drafts, coordinating with your accountant and advisor, and understanding safe harbor rules.
The goal isn’t to turn every doctor into a CPA, but to empower you with the questions and vigilance that keep you from accidentally overpaying. This episode is your invitation to take control of your tax planning so you can keep more of what you earn, without leaving tips for Uncle Sam.
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You will want to hear this episode if you are interested in...- (00:00) Are you tipping Uncle Sam?
- (03:05) Backdoor Roth IRA errors.
- (11:36) Missing 1099 income.
- (12:49) S-corp election mistakes.
- (21:15) Underpayment penalties.
- (28:59) State and local tax issues.
As physicians, you’re busy enough without memorizing the tax code. But that’s exactly why so many doctors unknowingly make the same costly mistakes year after year.
We see this all the time: backdoor Roth IRA errors because Form 8606 is ignored or filled out wrong, pro rata rule surprises because advisors forget to warn you about old IRA balances, and S-corp setups with unreasonably low salaries that scream audit bait.
These aren’t gotchas you can shrug off; they’re real money leaks, often in the thousands, that persist because no one stops to check the details until it’s too late. That’s why we think it’s essential to actually talk through these issues out loud.
When you hear about these missteps, from underpayment penalties caused by ignoring quarterly estimates, to forgetting 1099 income from side gigs or bank interest, it’s not meant to shame anyone.
It’s meant to arm you with the right questions for your accountant, to catch mistakes before they cost you. As physicians, you know small oversights can have big consequences. The same is true for your taxes.
Why Your Accountant (or Software) Might Miss ItEven with a professional in your corner, there’s no guarantee your return is error-free. Many accountants don’t specialize in physician finances, so they may not recognize the red flags unique to your situation.
And if you’re using software like TurboTax, you’re on your own to answer questions it doesn’t even know to ask about your multiple states of work, backdoor Roth moves, or S-corp salary calculations.
You need to understand that you can’t outsource vigilance completely; you have to be part of the conversation.
How to Avoid These Errors and Keep More of What You EarnOur goal isn’t to turn you into a tax expert, but to help you avoid tipping Uncle Sam. That starts with proactively reviewing your tax drafts with your accountant before filing, catching Backdoor Roth errors, checking that all 1099s and K-1s are accounted for, and confirming your W-4 or estimated payments keep you out of underpayment penalty territory.
It means questioning whether an S-corp election is really right for you, and staying alert if you’re moving states or practicing in multiple locations so you file properly everywhere you need to. Ultimately, this is about claiming your role as the financial steward of your career.
You’ve worked too hard to let the system nickel-and-dime you through preventable mistakes. A little planning now saves a lot of stress and money later. So let’s commit to catching these issues before they become expensive lessons, and make sure you’re only paying what you truly owe.
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