How One Radiologist Increased Her Pay and Improved Financial Security While Maintaining Work-Life Balance and Retaining Essential Benefits
Meet Dr. Shah: a radiologist by day and a full-time mom round the clock. Juggling three children under the age of five along with a demanding job that offers no flexibility, she faces missed soccer games and rescheduled date nights with her husband.
Life as a medical professional is not quite what she had envisioned. To make matters worse, both Dr. Shah and her husband are W-2 earners, and their annual tax bill takes a hefty one-third of their earnings.
As a reasonably successful, high-earning radiologist, Dr. Shah realized that her full-time job was financially and personally holding her back. She understood that something had to change.
Challenge: A High-Earning Radiologist Facing Heavy Tax Burdens
Burdened by substantial tax bills and inflexible schedules, she envisioned a career that provided greater financial flexibility and control over her time.
Dr. Shah had received various locum offers but had never taken the time to analyze the financial implications of how much she would actually take home, the tax ramifications, the loss of medical and retirement benefits, and her anxiety about constant travel—factors that deterred her from accepting any locum contracts.
However, she was intrigued when a local agency presented her with a locum contract that did not require travel. The problem was that the pay seemed slightly lower at first glance since all taxes would need to be paid by herself. That’s when she decided to consult The Doctor’s CPA for advice on the financial implications of staying a W-2 employee compared to accepting a Full-Time Locums contract.
Pre-Locums Contract Planning
With the help of The Doctor’s CPA, Dr. Shah received a financial analysis comparing her W-2 job with the locum contract. Besides tax strategies, it addressed several of her concerns, such as navigating the deduction for medical benefits and exploring expanded retirement options. This breakdown allowed Dr. Shah to negotiate reimbursement for her out-of-pocket malpractice insurance.
Ultimately, she based her decision not on emotion but on objective insights, leading her to accept the locum contract and walk away with more money in her pocket. Armed with expertise and a thoughtful plan, The Doctor’s CPA helped transform her professional and financial life, proving that bold changes can lead to rewards.
Solution: A Strategic Shift to Locum Tenens with Tax-Smart Financial Planning
When this radiologist approached The Doctor’s CPA, she sought guidance on lowering her tax burden while maintaining financial stability. Our expert team crafted a personalized strategy design to:
- Ensure a seamless transition: We helped our client take control of her financial future while shifting from full-time to independent contracting. We evaluated health insurance options and rolled over her W-2 retirement savings into a more robust self-directed retirement account.
- Improve work-life balance: As a locum tenens physician, she gained control over her schedule, reduced administrative burdens, and maximized her earnings—all while maintaining essential benefits.
- Establish a private retirement account: Since her spouse was also a high-earning doctor, she could save over $100,000 for retirement—far more than the $19,500 limit from her W-2 job.
- Negotiate tax-free opportunities: After we demonstrated how much her employer would save in taxes and benefits by retaining her as a locums contractor, she successfully negotiated tax-free malpractice coverage, allowing her to maintain flexibility while ensuring both she and the practice benefited financially.
- Optimize financial records: Maintaining accurate financial records helped our client secure PPP and EIDL loans during the pandemic, competing with large companies for time-sensitive funding. Because her financials, payroll, and taxes were up to date and properly formatted, she was first in line for business, real estate, and investment relief.
Result: A Financial and Lifestyle Transformation
By implementing these strategies, The Doctor’s CPA helped this radiologist achieve remarkable outcomes:
- Over $100,000 in tax savings through optimized deductions and tax-advantaged retirement contributions.
- Increased take-home pay, growing her annual earnings from $264,000 as a W-2 employee to $345,000 as a locum tenens provider.
- Better work-life balance with less time spent on financial stress and more time enjoying life with her family.
- Retained essential benefits by strategically managing her transition, ensuring uninterrupted malpractice insurance and healthcare coverage.
- Improved financial security with access to business relief programs and tax-saving strategies tailored to her locum tenens lifestyle.
Ready to Take Control of Your Financial Future?
This radiologist’s success story emphasizes how The Doctor’s CPA empowers physicians to maximize earnings, reduce tax burdens, and achieve financial freedom. If you’re considering transitioning to locum tenens or looking for physician-focused tax strategies, let our team guide you to a brighter financial future.
Contact The Doctor’s CPA today and start your journey toward financial independence!