Salary of doctors after taxes

[airplanes]

Just a note about the 457b deferred compensation plans. If the hospital or Corp entity goes bankrupt or sold, that 457b money is not specifically earmarked for you. It can be given to creditors. A local health system went through this some time ago and many administrators lost 7 figure sums. I recently had this discussion with the plan administrator, our tax lawyer and financial advisor for my wife. They all agreed this money could be potentially be at risk, although small in most cases.

Depends on whether the 457(b) is governmental or non-governmental. Governmental 457b’s are not subject to your employer’s finances or their creditors.

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[ccp005]

Use this calculator and plug in your zipcode Free Paycheck Calculator: Hourly & Salary - SmartAsset

Then take out some for loans. You can decide how quickly you pay them. You'll also want to contribute to your 401k and IRA, so you can plug those in too to see how that'll effect your taxes

 

[Obnoxious Dad]

Use this calculator and plug in your zipcode Free Paycheck Calculator: Hourly & Salary - SmartAsset

Then take out some for loans. You can decide how quickly you pay them. You'll also want to contribute to your 401k and IRA, so you can plug those in too to see how that'll effect your taxes

That paycheck calculator is terrific. Good find.

When you start thinking about take home pay the first two considerations should be specialty and location. Go here.

Physicians and Surgeons : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics

Physicians and surgeons diagnose and treat injuries or illnesses and address health maintenance.

www.bls.gov

This link leads you to the latest wage data for physicians collected by the US Bureau of Labor Statistics. If you noodle around in here, you can create a table showing the average wage by state for six different specialties plus a "physicians all other" category. Note that the data are based on a 2,080 hour work year. For most 50 hour per week physicians the data should be bumped by 25%.

The BLS data confirm that physicians practicing in the Midwest have it made. High wages, low cost of living and reasonable commute times can all be found in the Midwest.

 

[deleted1100659]

This is incorrect. But again, the issue is the 10 other factors that are included in calculating taxes. A single doctor will have a marginal rate around 35% but an effective rate of 24-26%. A married doctor will be a marginal rate of 24% but an effective rate of 18%, unless their spouse also works in which case it’ll be higher. And that’s just federal. You also have to add state taxes (if your state has them), FICA and any municipal taxes.

But then actual take home pay also has the pretax deductions of health insurance, FSAs, retirement contributions, etc which can all lower you MAGI and put you in a lower marginal tax bracket.

If you don’t care about any of that, the generic answer is that take home pay is conservatively 60-65% of your contract salary.

Deductions are pretty much **** one you hit a certain salary for attending physicians. With 401k you dont pay taxes on it when you put the money in but when you take it out, it gets taxed anyways so not much of a deduction there. As an attending you dont really qualify for roth. HSA can lower a hair. The biggest things to lower it are being married/having kids, other then that, not too much.

Once you factor in payroll, fica, federal, state, etc it hits around 40% tax rate for a lot of people, or pretty close to it. Oh and theres still property taxes, car taxes (some states), sales tax, etc.

There is no secret way to file money as a physician, ive looked very heavily into this.

 

[deleted1100659]

Oh and lets factor in a 6% inflation rate (if i remember correctly) this year

 

[Angus Avagadro]

Depends on whether the 457(b) is governmental or non-governmental. Governmental 457b’s are not subject to your employer’s finances or their creditors.

I believe that also is true. It however must be rolled over into another qualified govt 457b plan, which might be difficult if switching jobs to a non govt entity. Thanks for clarifying.

 

[deleted1100659]

The BLS data confirm that physicians practicing in the Midwest have it made. High wages, low cost of living and reasonable commute times can all be found in the Midwest.

too much snow sounds miserable to me, lol. But if you can handle snow the money is great in the midwest for psych

 

[airplanes]

I believe that also is true. It however must be rolled over into another qualified govt 457b plan, which might be difficult if switching jobs to a non govt entity. Thanks for clarifying.

Governmental 457b's can be rolled into traditional IRAs, 403b, 401k, etc. so you have many options. I would treat a governmental 457(b) the same as a 403(b). I definitely wish mine was governmental instead of non-governmental.

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

 

[Angus Avagadro]

Governmental 457b's can be rolled into traditional IRAs, 403b, 401k, etc. so you have many options. I would treat a governmental 457(b) the same as a 403(b). I definitely wish mine was governmental instead of non-governmental.

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

Fascinating. The plan director at my wife's non govt hospital entity did not know that. Thanks again for clarifying.

 

[pyrrion89]

I'm in California and about HALF my paycheck goes to various taxes (state, federal, Medicare, social security, etc), at $320k/yr

 

[IlDestriero]

So this question just came to my mind: how much is the actual salary of those who are in the medical profession after the taxes are taken out? I see figures being posted of $200,000 - $400,000 average salary, but I assume that's not the amount you bring back home after all is said and done.

The amounts you see posted are usually straight income excluding benefits. Health, disability, life, malpractice insurance, retirement contributions and matching, etc. can add quite a bit more and are why 1099 jobs tend to pay more than W2 jobs. It’s even more complicated when you’re a partner/owner and are taking part of you income as profit sharing. Try to find a 90th percentile job with 50th percentile hours and you’re winning.

 

[thumbz]

This thread got necrobumped at a good time, and as someone who had no idea what taxes would be like as a med student I want to give back in this domain. I printed my tax forms today so here is my real, unadultered data. I do max out my 401k and HSA.

Regular pay - $349,950
Taxes (state, federal, local, FICA, Medicare) - $138,650
Insurance, diabilitiy, medical, vision, dental, HSA, 401k- $30,500
Parking - $450

Net pay: $180,800 giving me a net pay of 52% of my gross.

Note - as mentioned, W2 does have its perks. My company paid out $56,000 in taxes, benefits and matching on my behalf, giving me an effective 1099 salary of ~$405,000.

 

[Captain_Falcon]

This thread got necrobumped at a good time, and as someone who had no idea what taxes would be like as a med student I want to give back in this domain. I printed my tax forms today so here is my real, unadultered data. I do max out my 401k and HSA.

Regular pay - $349,950
Taxes (state, federal, local, FICA, Medicare) - $138,650
Insurance, diabilitiy, medical, vision, dental, HSA, 401k- $30,500
Parking - $450

Net pay: $180,800 giving me a net pay of 52% of my gross.

Note - as mentioned, W2 does have its perks. My company paid out $56,000 in taxes, benefits and matching on my behalf, giving me an effective 1099 salary of ~$405,000.

Thanks for this! Out of curiosity, what specialty? Married/kids? Monthly mortgage payment?

 

[thumbz]

Thanks for this! Out of curiosity, what specialty? Married/kids? Monthly mortgage payment?

Married, 'twas a DINK but now we are trying our hand at small business ownership on her side. No kids, no mortgage, car payments, etc. We did the Dave Ramsey thing and went from being deeply in debt to debt free in 2 years. That was almost entirely by selling our house. It's super easy to get in deep water as a doc. We had a massive mortgage, two luxury car payments and a vacation property. It's so nice not having that stress anymore. We were living paycheck to paycheck which should have never happened.

I'm IM, live in the west. Salary is $305k, and I pick up extra shifts to make it to the $350. Have gotten as high as $400k with the extra shifts but we are staffed better now (I'd work more if I could).

 

[Captain_Falcon]

Married, 'twas a DINK but now we are trying our hand at small business ownership on her side. No kids, no mortgage, car payments, etc. We did the Dave Ramsey thing and went from being deeply in debt to debt free in 2 years. That was almost entirely by selling our house. It's super easy to get in deep water as a doc. We had a massive mortgage, two luxury car payments and a vacation property. It's so nice not having that stress anymore. We were living paycheck to paycheck which should have never happened.

I'm IM, live in the west. Salary is $305k, and I pick up extra shifts to make it to the $350. Have gotten as high as $400k with the extra shifts but we are staffed better now (I'd work more if I could).

So are you renting right now?

 

[thumbz]

Nope, we sold our big house and bought a much more modest place which we were able to pay off in a year. We actually plan to rent this place our when we move, buy a new place and try to pay off the mortgage again in 1-2 years. We both enjoy renovating homes so we tend to move every 2 to 3 years. We essentially have become live in house flippers but now are going to try our hand at renting them rather than rolling them into the next project.

 

[Captain_Falcon]

Cool. I’m going to be a SIWK. For those out there who don’t know it’s the opposite of DINK lol

 

[Splenda88]

Mine (fed income tax) is about ~19% on an income of 405k last year. If I add state tax, SS, medicare etc... 35% of my taxable income is gone. This is insane.

I guess I should be involved in politics and become a republican.