How One Physician Cut His Workweek, Boosted His Income, and Reclaimed His Time
A dedicated physician reduced his 70-hour workweek to 30 hours, tripled his income, and reclaimed valuable family time, all while setting the stage for potential retirement by age 40. Prithi Daswani, CPA PL, helped make this dream a reality by implementing tailored financial strategies that improved his bottom line and gave him a better work-life balance.
Challenge: A Physician’s Financial Struggles
Our client, a hardworking physician, struggled to balance a busy career and manage family responsibilities. He earned $300,000 – $400,000 annually, splitting his time between a W2 job and locum tenens work. Despite the high income, several financial issues complicated his life:
- Complex Financial Obligations: His finances were overwhelming, with a young daughter and elderly parents to support (both from the medical field).
- Poor Accounting: His previous accountant’s generic approach entangled him in unnecessary penalties and missed financial opportunities.
- Career Transition Uncertainty: Unsure if transitioning to full-time locum tenens work was the right move, he needed expert advice to evaluate his options.
Solution: Strategic Financial Transformation
A young physician came to us looking for clarity and financial relief. We rolled up our sleeves and got to work, providing the personalized solutions he needed to simplify and optimize his financial life.
- Establishing an S-Corporation: We set up an S-Corp for the physician, unlocking tax advantages and simplifying the management of his income and expenses.
- IRS Penalty Abatement and Payroll Overhaul: We intervened with the IRS, securing penalty abatements and cleaning up his payroll to ensure compliance.
- Family Involvement Optimization: We officially placed his parents on the payroll, acknowledging their contributions to administrative tasks. This strategy opened the door to more than $300,000 in tax-free income benefits and allowed deductions on business expenses previously unavailable to him as a W2 employee.
- Health Benefits and Expense Optimization: By employing his parents, they qualified for healthcare benefits, reducing his overall financial burden.
- Maximized Work-Life Balance: By fully transitioning to a 1099 contractor, he increased his annual income to $600,000–$700,000 while cutting his workweek down to three days. This shift allowed him to spend more time with his daughter and significantly reduced his stress.
Results: Profound Financial and Personal Gains
Our strategic restructuring had a lasting, transformative effect on the physician’s financial health and quality of life:
- Tax Savings: The new business structure and optimized expense management saved him over $150,000 in taxes, bringing his effective tax rate to just 8%.
- College Savings Maxed Out: He fully funded his daughter’s 529 college savings plan in just three years—an 18-year task completed in record time.
- Home Refinancing Success: With pristine finances, he refinanced his home, dropping his interest rate from 7% to an incredible 2%, with no closing costs.
- Proactive Tax Management: We implemented periodic tax payments, eliminating surprise bills and smoothing his cash flow.
New Venture: Empowering Medical Professionals with The Doctors CPA
Inspired by this success story, we launched The Doctors CPA, a venture dedicated to addressing the unique financial needs of medical professionals. Our services focus on helping physicians like our star client achieve financial freedom and work-life balance. We specialize in:
- W2 to 1099 Transitions: Whether you want to switch to locum tenens work or balance both roles, we offer detailed financial analysis, tax planning, and business structure optimization to maximize your benefits.
- Locum Tenens Financial Management: Already a locum tenens provider? We streamline your financial setup, ensure compliance, and boost your tax savings so you can focus on your practice.
- Personalized Financial Solutions: From managing fluctuating incomes to maximizing retirement contributions and college savings plans, we tailor our services to the specific needs of the medical field.
- Family Involvement Optimization: We help you integrate family members into your business structure in a tax-efficient manner, leveraging tax-free income opportunities.
Conclusion: Your Path to Financial Freedom
At The Doctor’s CPA, we’re passionate about empowering medical professionals with personalized financial strategies that yield tangible, transformative results. Let us help you achieve financial success, reduce your workload, and secure your family’s future