Plan your expenses and deductions strategically each year
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Maintain accurate and organized financial records for easy reporting
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Talk to a tax professional for expert guidance
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Tax Planning for Doctors and Lawyers in Los Angeles: How to Cut a Six-Figure Tax Bill
If you’re a high-earning professional in California — especially a doctor or attorney — chances are you’re paying far more in taxes than you should.
Between federal brackets, state income tax, and Medicare surcharges, top earners in Los Angeles can easily see over 45% of their income go to taxes.
At PacificWestTax, we help professionals like you take control of that number — through entity planning, income timing, and advanced deductions that high-income W-2 earners often miss.
Why High-Income Professionals Overpay
Most physicians, partners, and legal professionals get trapped by one of three issues:
- W-2 Income Structure — Little flexibility to defer or split income.
- No Entity Setup — Operating under your own name limits planning options.
- Reactive Accounting — Waiting until tax season instead of planning year-round.
The result? Missed deductions, higher effective tax rates, and lost opportunities for wealth preservation.
Case Example: The $600,000 Los Angeles Surgeon
A Los Angeles surgeon earning $600,000 was paying over $240,000 in total taxes each year.
After a strategic review, we implemented three changes:
- Formed an S-Corporation to shift income between salary and dividends
- Established a defined benefit retirement plan to defer large contributions
- Restructured expenses to maximize legitimate business deductions
Result: Over $60,000 in annual tax savings and stronger retirement contributions — with full IRS compliance.
Key Strategies for Doctors and Lawyers
Here are several advanced tactics that consistently deliver results for high-income clients:
- S-Corp or PLLC Structuring: Allows partial income distribution, reducing self-employment tax.
- Defined Benefit or Cash Balance Plans: Deduct up to six figures annually toward retirement.
- Expense Reclassification: Turn unreimbursed work expenses into business deductions through proper entity setup.
- Income Deferral Strategies: Use fiscal-year planning and prepayment options to shift income between years.
- Family Payroll & Trust Planning: Legally employ family members or fund trusts to shift income to lower brackets.
Each of these requires custom modeling — what works for a surgeon may differ for a trial attorney or managing partner.
California’s Added Tax Pressure
California’s top marginal tax rate (currently over 13%) makes proactive planning even more critical.
Combine that with the state’s limited deduction rules and no federal SALT deduction relief, and high earners can easily face some of the nation’s highest effective tax burdens.
That’s why strategies designed specifically for California professionals — not generic national templates — make the difference between compliance and optimization.
When to Start Planning
The best time to plan is before the tax year ends.
Quarterly reviews let us:
- Identify opportunities before deadlines
- Optimize salary vs. distribution ratios
- Adjust estimated payments
- Reinvest tax savings into retirement or asset protection structures
Our clients see tax planning not as a one-time service — but as part of ongoing financial management.
How PacificWestTax Helps
We provide proactive, year-round planning for high-income earners, including:
- Tax-efficient entity selection (S-Corp, PLLC, or partnership)
- Retirement plan design and implementation
- Expense optimization and audit-proof documentation
- IRS and California state tax coordination
We specialize in professionals earning $300K+, ensuring their tax plan matches their lifestyle and goals.
Key Takeaways
- High-income professionals in California can reduce taxes by 15–25% with the right planning.
- S-Corp and retirement plan strategies are among the most effective tools.
- Early, proactive planning is the only way to capture real savings.
- Your tax strategy should evolve as your income grows.