11 August, 2026 
Most 1099 clinicians file their return, breathe a sigh of relief, and don’t think about taxes again until next April. That’s the trap. The strategies that actually move the needle — a backdoor Roth conversion, restructuring a Solo 401(k), fixing a reasonable salary before it becomes an audit flag — all work best when there’s still runway left in the calendar year. Wait until December, and the window on several of them has already closed.
Barton Associates recently hosted its second tax-planning webinar with Brett LeMmon, CPA/PFS, CFP®, a senior tax and wealth advisor at Earned — the first in-kind, fully comprehensive wealth and tax firm built specifically for healthcare professionals. The math on why mid-year planning matters is simple: save $25,000 in taxes this year, invest it at an 8% annualized return, and you’re looking at roughly $391,000 in 10 years, $1.24 million in 20 years and just over $3 million in 30 years. That’s the real cost of waiting.
Here’s what Brett covered, and what it means for you as a 1099 clinician still deciding how the rest of this year plays out.
Most high-earning clinicians make too much to contribute directly to a Roth IRA. For 2026, the direct-contribution phase-out sits at $153,000 for single filers and $242,000 for married filing jointly. Once your income clears that, the door closes on funding a Roth IRA the simple way.
The backdoor Roth is the workaround, and Brett said it’s the single most common recommendation he makes to Barton clinicians. You contribute to a traditional IRA — up to $7,500 for 2026 if you’re under 50 years old — and then convert those funds to a Roth IRA. There’s no income limit on the conversion step, so the strategy is available to virtually everyone.
The catch is the pro-rata rule, and it’s the trap that catches people who didn’t plan ahead. If you’re carrying old 401(k) or 403(b) balances that got rolled into a traditional IRA at some point — a SEP IRA, a SIMPLE IRA, an old employer rollover — the IRS treats all of your IRA money as one pool when calculating the taxable portion of a Roth conversion. Any pre-tax dollars sitting in that pool make part of your “backdoor” conversion taxable, potentially defeating the purpose.
Brett’s fix: move that IRA money into a Solo 401(k) instead. Since 401(k) balances aren’t counted in the pro-rata calculation, consolidating there clears the way to do backdoor Roth conversions with zero tax due.
If you’re a 1099 clinician with no employees — a sole proprietor or the only person on your own corporation’s payroll — you’re a strong candidate for a strategy most W-2 earners simply can’t access: the mega backdoor Roth.
Retirement plan contributions across all sources are capped at $72,000 for 2026. Whatever you haven’t already funded through your standard Solo 401(k) contribution and profit-sharing can potentially go in as after-tax, voluntary contributions instead, which then convert to Roth. That’s meaningfully more Roth exposure than the $7,500 IRA limit allows on its own.
The requirement most people miss: your plan document has to explicitly permit after-tax contributions and in-plan conversions. An off-the-shelf Solo 401(k) from Fidelity, Schwab, Vanguard, or Betterment generally does not. You’ll need a custom plan document from a third-party administrator (TPA) written to allow it.
Worth knowing: the after-tax contributions land inside a separate Roth sub-account within your Solo 401(k), not automatically in an outside Roth IRA. Depending on your plan document, an in-service rollover can move that balance out to a Roth IRA later if you want everything consolidated.
If you’re working full-time as a W-2 employee and doing 1099 work on the side, this same door is open to you through your side Solo 401(k), giving you Roth capacity beyond what your day-job plan and personal Roth IRA limit allow.
If you’re not sure whether your current plan document supports either strategy, that’s exactly the kind of thing worth confirming on a tax strategy call before year-end.
As a 1099 clinician, you’re both the employer and the employee, and that changes what’s possible. A W-2 clinician under age 50 tops out at $24,500 in personal 401(k) deferrals. A 1099 clinician stacking contributions across multiple vehicles can often reach $72,000 to well over $300,000 in a single year, depending on income and plan design.
For 2026, Solo 401(k) and SEP IRA contribution limits sit at $72,000 for clinicians under 50, $80,000 at 50 and older, and up to $83,250 for those in the 60–63 enhanced catch-up window.
A few mechanics worth knowing:
For a full side-by-side comparison of Solo 401(k) vs. SEP IRA and how to choose between them, see our companion guide, Tax Deductions for Healthcare Professionals: The Complete 1099 Guide.
One deadline that trips people up every year:some of these plans need to be established before December 31 to count for the current tax year. For other plans, a retroactive adoption is available up to the due date of the tax return. To ensure all options are available to you, the best course of action is to learn about your options prior to year end.
If you’re on a high-deductible health plan, the HSA is arguably the most underused account in your entire tax picture. It’s the only vehicle with a true triple tax advantage: contributions are deductible going in, the account grows tax-free, and qualified withdrawals come out tax-free too.
For 2026, the contribution limits are $4,400 for individual coverage and $8,750 for family coverage, plus an additional $1,000 catch-up if you’re 55 or older.
The advanced move Brett recommends: don’t draw from the HSA when a medical expense comes up. Pay it out of pocket with cash, and let the HSA balance stay invested and compounding. There’s no time limit on when you reimburse yourself — you can hold onto receipts for years, even decades, and take a tax-free reimbursement for those old expenses well into retirement. Used this way, the HSA functions less like a spending account and more like a second, more powerful Roth.
The tradeoff is real: you have to be enrolled in an HDHP to contribute, and that’s not the right coverage choice for everyone. But if you’re already on a high-deductible plan, funding the HSA to the max and leaving it invested is close to a free lever.
Whether to operate as a sole proprietor, LLC, or S-corp is one of the biggest structural decisions a 1099 clinician makes, and it’s covered in depth — including the full self-employment tax savings table — in our complete 1099 guide. The short version: electing S-corp status lets you split income between W-2 salary and distributions, and only the salary portion is subject to self-employment/payroll tax. On $200,000 of income, that split can translate to roughly $8,000–$10,000 in annual self-employment tax savings, depending on how salary is set.
What doesn’t get discussed enough is the rule that makes or breaks the whole strategy: the IRS requires S-corp owner-employees to pay themselves a reasonable salary before anything else gets treated as a distribution. “Reasonable” isn’t a number you pick — it’s tied to your actual job duties, market compensation for your specialty and geography, consistent monthly payroll, and documented records that back it up.
Brett was direct about this in the webinar: it’s the number one reason S-corporations get flagged for audit. He described working with one clinician who had gone two years without running any payroll from his S-corp at all, a mistake that erases the entire benefit of the election and invites scrutiny.
As a rough framework for when the election is worth the added complexity:
One notable exception surfaced during the Q&A: a clinician with a non-working spouse and roughly $300,000 in 1099 income might reasonably stay a sole proprietor longer than the thresholds above would suggest. The calculation isn’t purely a function of income.
It’s also worth being clear about what an S-corp election doesn’t do. It doesn’t lower your income tax rate, as ordinary income is still taxed the same either way. It doesn’t turn personal expenses into deductible ones. And it doesn’t eliminate audit risk; if anything, a poorly documented salary decision increases it. Run the side-by-side numbers before committing, and revisit the salary figure at least annually as income changes.
A few provisions shifted for the 2026 tax year that are worth building into your mid-year plan now rather than discovering them in April:
Because several of these figures shift with annual IRS guidance and legislative updates, confirm the exact numbers for your filing year with your CPA before relying on them for a specific decision.
One 2026-specific change Brett flagged directly: a new floor on charitable deductions. You now have to exceed 0.5% of your adjusted gross income in charitable giving before any of it is deductible. On $1 million of income, that’s a $5,000 hurdle before the first dollar counts; on $500,000, it’s $2,500. Because of this, bundling contributions into a single tax year can make sense to take the highest advantage of your charitable giving.
Another workaround is a donor-advised fund. Instead of giving $2,000 a year and getting no write-off under the new floor, you can front-load several years of giving into the fund in a single year — clearing the floor and capturing a meaningful deduction — then distribute that money to charities over time on your own schedule. You can also contribute appreciated securities directly to a donor-advised fund and deduct the current fair market value, even if the position has grown well beyond what you originally paid for it.
Real estate is one of the most talked-about and often most misunderstood tax strategies among clinicians, largely because the depreciation benefits people hear about often don’t apply the way they expect.
By default, a rental property is a passive activity, and passive losses can only offset passive income. A cost segregation study on a rental property can generate substantial depreciation, but if you don’t have other passive income to absorb those losses, they can go unused for several years. The deductions don’t disappear, they simply carry forward, unused, until you have passive income to offset them or until you dispose of the property.
To use rental losses against your W-2 or 1099 income directly, you generally need Real Estate Professional Status (REPS), which requires more than 750 hours per year in real estate activities and more than 50% of your total working hours spent in real estate. For a clinician working full-time, that second requirement is effectively impossible to meet personally. The only realistic path is qualifying through a non-working spouse.
Short-term rentals offer a separate escape hatch from the passive-loss trap, without requiring REPS. If the average guest stay is seven days or fewer, the property can avoid passive classification altogether — but you still have to clear a material participation bar: more than 500 hours of activity for the year, or more than 100 hours and more time than anyone else involved, including a property manager. That last detail catches people off guard. Hire a property manager who spends more hours on the property than you do, and you’ve likely blown the test for that year. If you’re pursuing the depreciation benefit on a short-term rental, plan to self-manage, at least through the first year you’re claiming it.
There’s one clean exception to all of this: self-rental, where you own the building your practice operates out of and rent it to your own business. That structure sidesteps the hour-based tests entirely.
Given the variables involved, the realistic savings range for real estate strategies like these is roughly $20,000–$50,000+ per year, depending heavily on the property, your participation, and your existing passive income — not a fixed outcome, and not something to bank on without a proper hours log and, ideally, a CPA’s sign-off before you file.
Working assignments across state lines creates filing obligations tied to where the income is actually earned, not just where you live — a reality locum tenens clinicians run into more than almost any other profession. If you picked up work in a new state this year, that state may expect a return from you regardless of your primary residence.
Some states have reciprocity agreements that simplify this, letting you pay tax in your home state instead of every state you worked in. Where reciprocity doesn’t apply, you’re generally filing separately in each state, with credits from your home state to avoid being taxed twice on the same income.
The practical fix is tracking, not guessing after the fact: keep a running log of days worked and income earned by state throughout the year. It’s far easier to reconstruct in July than to piece together the following February. If you’ve added a new state this year, a mid-year check-in with your CPA is worth the time.
A few patterns show up again and again among clinicians who end up overpaying:
The operational fix is the same one we cover in our complete 1099 guide: a dedicated business bank account, a separate card for business expenses, and digital receipt capture as they happen rather than reconstructed months later.
The safe-harbor rule is the one number worth memorizing: pay in either 90% of your current year’s tax liability or 110% of last year’s, whichever applies to your situation, and you avoid underpayment penalties regardless of how the rest of the year shakes out. The three-account system — an operating account for income as it comes in, a tax reserve account you fund with every payment received, and your personal account — keeps that math manageable without the year-end scramble. For the full breakdown of how to set this up, see our complete 1099 guide.
Tax planning that actually saves money happens mid-year, while there’s still time to fund a plan, restructure an entity, or fix a salary decision before December 31 closes the door. Waiting until filing season means choosing from whatever’s left over, which is usually not much.
Earned is a comprehensive tax and wealth firm built specifically for healthcare professionals, and Barton Associates clinicians receive a 35% discount on personal tax preparation through the partnership. If you haven’t run a mid-year projection yet this year, that’s the single highest-leverage conversation to have before the fall.
Ready to see where you stand? Get started with Earned, and catch the full webinar recording for Brett LeMmon’s complete walkthrough. And for the deeper dive on deductions, entity comparisons, and quarterly tax systems referenced throughout this piece, read Tax Deductions for Healthcare Professionals: The Complete 1099 Guide.
Brett LeMmon, CPA/PFS, CFP®, is a Senior Tax and Wealth Advisor at Earned, where he’s spent over a decade working exclusively with 1099 clinicians and practice owners.
What is a “pass-through entity tax”? A pass-through entity tax (PTET) is a state-level election that lets your S-corp or partnership pay state income tax at the entity level instead of you paying it individually. This matters because the federal SALT deduction is capped for individuals, but PTET payments made by the entity are typically still fully deductible as a business expense on your federal business return. Many states have adopted this election specifically as a workaround to that cap. Whether it applies to you depends on your state and entity structure, so it’s worth reviewing with your accountant each year.
Does a mega backdoor Roth go into the same Roth account? Not automatically. A mega backdoor Roth uses after-tax contributions inside your Solo 401(k), which are then converted in-plan to a separate Roth sub-account within that same 401(k) — not your outside Roth IRA. From there, some plan documents allow an in-service rollover out to a Roth IRA if you want everything consolidated in one place. This requires a custom Solo 401(k) plan document, since most off-the-shelf providers don’t support after-tax contributions or in-plan conversions.
Solo 401(k) rollover: is there a dollar limit on converting to a Roth IRA? Rolling a prior employer’s 401(k) into your new Solo 401(k) is a trustee-to-trustee rollover, not a Roth conversion, so there’s no dollar limit and no tax due at the time of the rollover. If you later want to move some or all of that balance into a Roth IRA, that’s a separate step called a Roth conversion, and there’s no cap on how much you can convert either — you’re simply taxed as ordinary income on the portion of the converted amount that hasn’t previously been taxed. Because of that, most people convert in planned chunks over several years rather than all at once, to manage the tax bracket impact. The right amount and timing depends on your income and other goals for the year.
Is a Roth the first place to put money before or instead of a traditional IRA? It depends on your income and where you expect your tax rate to land in retirement. If you’re eligible to contribute directly to a Roth IRA, it’s often prioritized since the growth and withdrawals are tax-free. Once your income exceeds the Roth eligibility limits (currently $153,000 single or $242,000 married filing jointly), a direct Roth contribution may not make sense, and a backdoor Roth conversion becomes the more efficient path. The bigger goal either way is tax diversification — having a mix of pre-tax, Roth, and taxable accounts so you can control your taxable income in retirement.
Can you write off attorney fees for estate planning? Generally, no. Legal fees for personal estate planning are considered personal expenses and aren’t deductible on your individual return. There’s a narrow exception for the portion of a fee specifically for tax advice or for producing or collecting taxable income, which some attorneys will break out separately on the invoice. If the estate plan is tied to a business entity you own, part of the fee may be deductible at the entity level instead, so it’s worth asking your attorney to itemize.
Can you define “high income”? It depends on which strategy we’re talking about. For Roth IRA eligibility, it starts around $153,000 if you’re single or $242,000 if you’re married filing jointly, since that’s where direct contributions phase out. For S-corp and entity planning, meaningful savings typically start once net profit clears roughly $200,000. So rather than one number, think of it as a set of thresholds that trigger different strategies as your income grows.
Can you deduct Medicare premiums as a health insurance deduction? Yes, in most cases. If you have net profit from self-employment and aren’t eligible for subsidized health coverage through an employer, Medicare Part B, Part D, and supplemental Medigap premiums generally qualify for the self-employed health insurance deduction. That deduction is taken above the line on your personal return, so it reduces your taxable income even if you don’t itemize. The deduction is capped at your net self-employment income, so it’s worth confirming the exact amount with your accountant each year.
If travel expenses are paid on a separate check so they don’t appear in 1099 income, does that avoid taxes on them? Unfortunately, that structure doesn’t actually remove those payments from taxable income the way you’d want it to. As a 1099 contractor, there’s no formal accountable plan between you and the company the way there is for W-2 employees, so a separate check for expenses is generally still treated as income to you. The correct way to get the tax benefit is to deduct those costs — airfare, lodging, and car rental — as business expenses on your own return rather than trying to exclude the reimbursement itself. It’s worth a closer look with your accountant at how those payments are being reported to make sure you’re capturing the deduction correctly.
What’s the minimum net profit to consider an S-corp, and is it worth it close to retirement? As a general rule, S-corp elections don’t start making sense until net profit is in the $75,000–$100,000 range, since below that the payroll and administrative costs tend to outweigh the self-employment tax savings. Closer to retirement, the math shifts because you have fewer years to recoup the setup and ongoing compliance costs through tax savings. It can still be worth it if your net profit is high enough that even one or two years of savings outweighs the added complexity, but it’s worth running the actual projection rather than assuming either way.
This content is for informational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified professional regarding your specific situation.
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