Can you form a 501(c)(3) private practice?

[hebel]

Is this possible? I feel limited to being employed to eventually get PSLF, but It would be pretty cool to not have to delay private practice. I know technically it wouldn't be "private" practice if you were 501(c)(3), but hopefully you get what I mean.

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[WisNeuro]

"To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. "

" A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. "

I'd check with a tax attorney, but that seems like a great way to commit tax fraud.

 

[Candidate2017]

There are some nifty things wealthy people can do with a 501(c)(3) with regard to tax advantages, but opening a clinic just to get PSLF status isn't worth it. As pointed out, you can't distribute profits to yourself. I suppose you could hire a spouse or adult child (wage + retirement benefits) with the profits, but then you have W-2 taxation. If you go through the work of starting a clinic, might as well make it a PP and benefit from salary + profits/dividend taxation.

PSLF itself doesn't even make sense (unless maybe you are in academia) because many employers offer loan repayment or you can pay off loans relatively soon by joining a PP.

 

[When is graduation again?]

I personally don't know much about the PSLF, so I can't answer that part of the question.

But I have looked into non-profit incorporation. You can start a non-profit, but it could limit your earned income... potentially. You're allowed to pay yourself a competitive salary for a physician, but any more than standard salary could be scrutinized by the feds. Any extra revenue has to be re-invested back into the non-profit and cannot go to you directly. How to Make Money Running a Nonprofit

 

[Merovinge]

I think on one hand there is absolutely no reason to go down this rabbit hole as a physician. If any of us are reasonable with money, we can certainly end up in the top 1% of the US and top .1% of the world which should be plenty for anyone who decided on medicine as a career (as opposed to VC or IB etc).

On the other hand, seeing what companies pay administrators who bring so little value to the system, it would be easy to not have net earnings after paying onself/staff and still be able to engage in charitable work with some tax breaks. I can't imagine that it's ever worth it, but knowing what my 501c3 pays some of our administrators it sure makes you wonder...