Educational only. This is not legal, tax, or financial advice. Tax rules, contribution limits, state laws, and regulatory guidance change frequently. Consult your CPA, attorney, or financial advisor before acting on anything below. Last reviewed dates are shown at the bottom of each guide — numbers may be outdated.
At radiologist-level income, the federal marginal rate is 37% plus 3.8% Net Investment Income Tax on passive income, plus state income tax (0-13.3%) — a top marginal rate in the high-40s for most, above 50% in California, NY, NJ. A few structural moves are worth far more than tactical deductions. Here is what actually matters.
The moves that move the needle
- Entity structure (see Entity Structure). S-corp election on 1099 income can save $8-15k/year in SE tax.
- Retirement deferrals (see Retirement Plans). $70k of 401(k) space at a 40% blended rate is $28k of current-year tax deferred. Cash balance adds another $100-300k of shelter.
- State residency. Moving from CA to TX saves 10-13% of ordinary income. Most people cannot do this for family reasons, but locum radiologists can plan it deliberately.
- Charitable strategies. Donor-advised funds, appreciated securities, qualified charitable distributions later in life.
- Real estate and depreciation. Direct ownership creates paper losses that can offset ordinary income if you qualify for real estate professional status — usually not achievable for a full-time radiologist but can work for spouses.
Most "write-offs" that finance gurus discuss are rounding error compared to these.
The QBI (Section 199A) deduction — almost always out of reach
The Qualified Business Income deduction allows a 20% deduction on pass-through business income, but health is a specified service trade or business (SSTB) and phases out fully above a threshold.
For 2025:
- Full deduction if taxable income is below $197,300 single / $394,600 joint
- Phased out through a narrow band above that
- Zero deduction above $247,300 single / $494,600 joint
Almost every attending radiologist is above the phase-out. Spouses with non-SSTB businesses can sometimes still capture it. Do not build your structure around the QBI deduction if you are above the phase-out.
Estimated quarterly taxes
If you are 1099 or have significant pass-through income, you owe quarterly estimated taxes. Due dates (generally):
- Q1: April 15
- Q2: June 15
- Q3: September 15
- Q4: January 15
Safe harbor: if your withholding + estimates equal 110% of the prior year's tax (for high income) or 100% of the current year's tax, you avoid underpayment penalties.
Practical rule: sweep 35-40% of every 1099 deposit into a separate account earmarked for quarterlies. Do not touch it.
State residency — when it actually matters
Radiologists with teleradiology income often read for multiple states. General principles:
- Your resident state (where you live primarily) taxes ALL your income.
- Non-resident states where you physically work or earn sourced income also tax that state's income, and your resident state gives you a credit (usually).
- Dual residency can happen if you spend enough days in a second state (often 183+). That is usually bad.
- Florida, Texas, Washington, Tennessee, Nevada, South Dakota, Wyoming, Alaska have no state income tax. New Hampshire has no tax on wage income.
Moving residency requires affirmative steps: new driver's license, voter registration, primary care physician, banking, spending the majority of days in the new state. Keeping a small house in your old state invites an audit.
Moonlighting disclosures
If your main contract requires disclosure of outside work (most do), put it in writing before you take locum or teleradiology shifts. Undisclosed moonlighting income can be grounds for termination and, for W-2 employees, creates thorny double-coverage malpractice situations.
The high-income gotchas
- NIIT (Net Investment Income Tax): 3.8% on investment income above $200k single / $250k joint. Reduces the effective return on taxable investing.
- Additional Medicare Tax: 0.9% on wages/SE income above the same thresholds. Your W-2 employer withholds only up to your single-employer wages, so two-employer physicians can owe at year-end.
- AMT (Alternative Minimum Tax): mostly gone after TCJA, but still hits some taxpayers with large state tax deductions and ISOs (less common for radiologists).
- Stealth phase-outs: several deductions and credits phase out at physician income — do not assume eligibility.
Questions to ask your CPA
- What is my effective vs marginal federal rate this year, and how does my state stack?
- Am I capturing all the retirement space my structure allows?
- Are we doing a backdoor Roth, and do I have any pre-tax IRA balance that would trigger pro-rata?
- What is my quarterly-estimated strategy, and do I have safe-harbor protection?
- Are there any multi-state filing complications I should plan for?
Common mistakes
- Assuming W-2 withholding plus no estimates covers everything — if you have substantial side income, you can owe big.
- Leaving a pre-tax IRA from residency in place, sabotaging backdoor Roths.
- Moving states on paper but keeping ties (house, primary care, church membership) — triggers residency audit.
- Trying to DIY the return past the first year — a CPA who specializes in physicians usually pays for themselves in year one.
Last reviewed: 2026-04. Tax rules, thresholds, and limits change annually. Always verify current IRS figures and consult a CPA before filing.