Physician Tax Calculator 2026 β W-2 + Moonlighting Income & Retirement
Calculate taxes for physicians with hospital W-2 salary plus 1099 locum tenens or moonlighting income. Includes Solo 401(k) for 1099 income, backdoor Roth, SE tax on 1099 portion, and S-Corp comparison.
$
Gross salary β income tax withheld, FICA withheld $
2026 limit $24,500 ($31,500 age 50+) $
Locum tenens, night call, side practice income $
Malpractice insurance, CME, licensing, supplies $
Employee deferral (limited by $24,500 cap across all plans) + 25% employer %
Examples:
$0
Total Federal Tax
$0
SE Tax on 1099 Income
$0
Total Retirement Contributions
0%
Effective Total Tax Rate
Physician Income Tax Breakdown
How Physician Taxes Work
Physicians with mixed W-2 and 1099 income face complex tax planning decisions. The 1099 portion is subject to self-employment tax (15.3% on first $184,500, 2.9% above), but also unlocks the powerful Solo 401(k) contribution opportunity.
SE Tax + Retirement Formula
1099 Net Profit = Gross 1099 Income β Business Expenses
SE Tax = Net Profit Γ 92.35% Γ 15.3% (SS capped at $184,500 across W-2 + SE)
Solo 401(k) Employee Deferral: capped at $24,500 β hospital 401k contributions
Solo 401(k) Employer Contribution: 25% of net SE profit
Solo 401(k) Total Cap: $70,000 combined
AGI = W-2 + 1099 Net β SE Deduction β Hospital 401(k) β Solo 401(k) Employee
SE Tax = Net Profit Γ 92.35% Γ 15.3% (SS capped at $184,500 across W-2 + SE)
Solo 401(k) Employee Deferral: capped at $24,500 β hospital 401k contributions
Solo 401(k) Employer Contribution: 25% of net SE profit
Solo 401(k) Total Cap: $70,000 combined
AGI = W-2 + 1099 Net β SE Deduction β Hospital 401(k) β Solo 401(k) Employee
Example β Hospitalist with Moonlighting
$280K W-2, max hospital 401(k) $24,500, $80K moonlighting, $8K expenses:
1099 net: $72,000 | SE tax: ~$9,827 | SE deduction: $4,914
Solo 401(k): $0 employee (W-2 401k maxed) + 25% Γ $72,000 = $18,000 employer
AGI: ~$319,086 | Federal tax: ~$82,000 | Total: ~$92,000
Effective rate on $360K total gross: ~25.6%
1099 net: $72,000 | SE tax: ~$9,827 | SE deduction: $4,914
Solo 401(k): $0 employee (W-2 401k maxed) + 25% Γ $72,000 = $18,000 employer
AGI: ~$319,086 | Federal tax: ~$82,000 | Total: ~$92,000
Effective rate on $360K total gross: ~25.6%
Extended
1099 Sole Prop vs S-Corp Comparison
See exact tax savings from S-Corp election on physician moonlighting income with break-even analysis
Compare moonlighting income as sole proprietor (Schedule C) vs S-Corp election. S-Corp saves SE tax on distributions but adds compliance overhead.
$
Payroll service + CPA for 1120-S | Scenario | 1099 Net | SE / FICA Tax | Solo 401(k) Available | Total Overhead | Net Benefit |
|---|
Frequently Asked Questions
Can physicians with both W-2 and 1099 income open a Solo 401(k)?
Yes β physicians who have 1099 (self-employment) income from moonlighting, locum tenens, or independent practice can establish a Solo 401(k) for that 1099 income. This allows contributions beyond what their hospital employer's 401(k) permits. For 2026, the combined total from all sources cannot exceed $70,000 (plus catch-up contributions). The Solo 401(k) is funded from 1099 net profit: up to 100% of net self-employment income as an employee deferral (capped at $24,500) plus 25% of net self-employment income as an employer contribution.
What is the backdoor Roth IRA strategy for high-income physicians?
The backdoor Roth IRA allows high-income individuals who exceed the Roth IRA income limits (phaseout $150,000β$165,000 single, $236,000β$246,000 MFJ in 2026) to still make Roth IRA contributions. The process: (1) make a non-deductible Traditional IRA contribution of up to $7,500 ($8,500 if 50+), (2) immediately convert it to a Roth IRA. If you have no other pre-tax IRA funds, the conversion has minimal tax cost. Beware the pro-rata rule if you have pre-tax IRA balances β the tax cost can be significant.
Should physician moonlighting income be structured through an S-Corp?
An S-Corp election for moonlighting/1099 physician income can save 15.3% self-employment tax on the distribution portion, but involves overhead (payroll processing, 1120-S filing, quarterly payroll deposits). The break-even point where S-Corp saves money typically occurs around $40,000β$60,000 of net 1099 income, accounting for compliance costs of $2,000β$4,000 per year. Below that level, sole proprietor status with a Solo 401(k) is usually simpler and nearly as tax-efficient. Many states also charge franchise or excise taxes on S-Corps that further affect the calculation.
How does Public Service Loan Forgiveness (PSLF) affect physician tax planning?
PSLF forgives remaining student loan balances after 120 qualifying payments (10 years) on an income-driven repayment plan while working full-time for a qualifying nonprofit employer (most hospitals qualify). The key tax benefit: PSLF forgiveness is 100% tax-free, unlike most other loan forgiveness programs. This creates a strong incentive for physicians at nonprofit hospitals with high loan balances to stay in those positions. The trade-off is usually a lower salary than private practice, so the analysis requires comparing expected loan forgiveness amount vs the salary differential over 10 years.
What retirement contributions can physicians make in 2026?
Physicians can potentially contribute to multiple retirement accounts. Hospital 401(k): up to $24,500 ($31,500 if 50+, $12,750 super catch-up if 60β63). Hospital 403(b) or 457(b): additional $24,500 each at qualifying nonprofit hospitals. Solo 401(k) for 1099 income: up to 100% of net SE income as employee deferral (limited by overall $24,500 cap across all 401k/403b plans) + 25% as employer contribution, total capped at $70,000. Traditional/Roth IRA: $7,500 ($8,500 if 50+) via backdoor Roth if income too high. Total possible: over $130,000/year in tax-advantaged retirement savings.