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A big point people often forget when comparing doctors' s salaries to other fields: physicians are expected to cover a large number of their own work-related co
by chimeracoder 9y ago
A big point people often forget when comparing doctors' s salaries to other fields: physicians are expected to cover a large number of their own work-related costs, like continuing education, insurance, or even medical equipment and (sometimes) overhead like office space. Because physicians almost always pay AMT, these work-related expenses are not tax-deductible.
$250,000 sounds like a lot, but it's really not once you take into account how much of that goes towards insurance, licensing fees, equipment, supplies, and all your normal business expenses. (The article linked says that this is "even after malpractice insurance and other expenses", but that's clearly not what the underlying source data represents.)
- hkmurakami 9y agoAre these cost categories true even for non private practice folks who are employed under a larger organization?
- chimeracoder 9y ago> Are these cost categories true even for non private practice folks who are employed under a larger organization? Yes - depending on the employing org, they may not have to pay for some things office space (though many employers won't even cover that). But the bulk of their expenses - insurance, continuing education, and licensing - are not covered, and are paid for out-of-pocket by post-tax money.
- mljoe 9y agoTheir gross pay is way higher then $250,000. Actually $250,000 is the net salary after all expenses, and that's about right for not particularly enterprising doctors (ie. internal medicine, no surgery).
- chimeracoder 9y ago> Actually $250,000 is the net salary after all expenses It's not. The article says that, but it's flat out wrong - even the source that the article links contradicts this claim. > For employed physicians, patient-care compensation includes salary, bonus, and profit-sharing contributions. For partners, this includes earnings after taxes and deductible business expenses but before income tax. The author of the article clearly doesn't know that "deductible business expenses" covers only a tiny fraction of the business expenses that physicians are expected to pay - most are not deductible.
- mljoe 9y agoWhat business expenses are not deductible?
- SkyPuncher 9y agodeductible != credit A 100k expenses does not translate to 100k of tax savings.