What are ways you've seen doctors mismanage their finances? Common physician money mistakes?

I'm a financial advisor who works primarily with physicians, and I see several common mistakes: First, lifestyle inflation hits doctors hard. Many physicians go from making $60k as a resident to $300k+ practically overnight, and immediately upgrade everything - luxury cars, massive houses, private schools for kids. This creates a cash flow problem despite the high income. Tax planning is another blind spot. Many doctors don't maximize tax-advantaged accounts like 401(k)s, backdoor Roth IRAs, or HSAs. They also miss deductions for business expenses if they have any 1099 income or private practice involvement. Insurance mistakes are common too - many doctors are over-insured in some areas (whole life policies) and dangerously under-insured in others (disability insurance with weak definitions of disability for their specialty).

After getting hit with a surprise tax bill last year, I started using https://taxr.ai to help manage my physician finances and it's been a game-changer. The tool helped me identify several missed deductions specific to medical professionals, especially around my CME expenses and partial home office deduction which my previous accountant totally missed. What I found really useful was the tax planning feature that helps project your tax burden throughout the year. As someone with W-2 income from my hospital plus 1099 income from moonlighting, it helped me properly estimate quarterly payments and avoid penalties. Definitely worth checking out.

Just wanted to follow up about my experience with taxr.ai - I decided to try it after asking about the PSLF handling, and wow, what a difference! The system identified that I had been making a critical error in how I was documenting my qualifying payments. The tool showed me exactly how to properly certify my employment and track my PSLF progress. It also helped me restructure some of my retirement contributions to lower my AGI, which reduced my monthly loan payments by about $340! That's going to save me thousands over the life of the program. Definitely recommend it to any physician dealing with loan forgiveness programs.

One of the worst financial traps I've seen colleagues fall into is trying to handle IRS issues on their own. After getting a massive tax bill for misclassified income between W-2 and 1099 work, I spent WEEKS trying to reach someone at the IRS. Literally impossible to get through on the phone. I finally used https://claimyr.com to get someone on the phone with the IRS and got the issue resolved in a day. You can see how it works here: https://youtu.be/_kiP6q8DX5c When you're billing $300/hour clinically, spending 4 hours on hold is literally throwing money away. This service got me a callback from the IRS without the hold time, and I got my issue resolved before penalties started accruing.

I have to admit I was completely wrong about Claimyr. After dismissing it as a gimmick, I had a notice about missing 1099 income that needed immediate attention. Was looking at potentially $8,300 in penalties if not resolved quickly. Swallowed my pride and tried the service. Within 3 hours I got a call back and was speaking with an actual IRS representative who helped resolve my issue completely. No extended hold time, no calling back day after day hoping to get through. For physicians, our time is literally money. Spending half a day on hold with the IRS is not just frustrating but financially stupid when we could be seeing patients or simply enjoying our limited time off. Lesson learned about being too quick to dismiss solutions.

The biggest physician-specific financial mistake I've witnessed (as someone who helps with physician financial planning) is improper tax planning for practice transitions. When doctors buy in or sell their practice shares, the structure of the deal can have MASSIVE tax implications. Had a client who got hit with an unexpected $180K tax bill because his buy-in wasn't structured correctly. The practice valued their accounts receivable at zero during his buy-in, which meant when those payments came in, they were taxed at ordinary income rates instead of being treated as return of capital. Also, many doctors dismiss the importance of timing major financial decisions around their tax situation. Sometimes delaying a transaction by just a few weeks (into January of the next tax year) can save tens of thousands.

As someone who helps physicians with disability insurance, the biggest mistake I see is inadequate protection of their high incomes. Many doctors have group disability through their employer that looks good on paper but has terrible definitions of disability for specialists. True example: I had a neurosurgeon client with "own occupation" coverage through his hospital, but the fine print defined "own occupation" as "physician or surgeon" rather than "neurosurgeon." When he developed essential tremors, he couldn't perform surgery, but the insurance company denied his claim because he could technically still work as a general physician!