#341 Tax Preparer vs. Tax Strategist: What Physicians Need to Know ft. Kim Hopkins and Laxman Pichappan of Doc Wealth
In this episode, Peter sits down with Kim Hopkins and Laxman Pichappan of Doc Wealth to break down the difference between a tax preparer and a tax strategist. They cover what proactive planning looks like, the strategies available to W-2 and 1099 physicians, and the common mistakes that leave money on the table.
If taxes feel like the biggest hole in your pocket, this conversation gives you a clearer way to start asking the right questions. Tune in!
Doc Wealth brings this episode to you.
Doc Wealth is a physician-founded tax firm serving thousands of physicians across all 50 states and every specialty. They handle the full picture, from proactive tax planning and filing to entity formation, payroll, and bookkeeping, with in-house attorneys, CPAs, and Enrolled Agents on staff.
Are you looking for a community to encourage you as you begin, or want to accelerate your business to the next level? Then join thousands of physicians who share the same journey of creating their ideal lives through multiple streams of income by joining us in our Facebook communities such as Passive Income Docs and Passive Income MD.
Episode Highlights
Now, let’s look at what we discussed in this episode:
- Why Taxes Are Such a Big Hole in a Physician’s Pocket
- Preparer vs. Strategist, and Why Planning Beats Filing
- Strategies for W-2 and 1099 Physicians
- Compliance, Common Mistakes, and Why a Physician-Focused CPA Matters
- When to Start, What It Costs, and Questions to Ask
Here’s a breakdown of how this episode unfolds.
Episode Breakdown
Why Taxes Are Such a Big Hole in a Physician’s Pocket
Peter opens by saying taxes might be the biggest hole in a physician’s pocket, even though it’s a topic many of us would rather not think about. He brings on two experts from Doc Wealth. Kim Hopkins is an enrolled agent and the director of tax planning, with more than 17 years in accounting, and she’s been part of past conferences. Laxman Pichappan is a co-founder with a background in accounting and finance leadership in the tech space. Doc Wealth is a physician founded tax firm that serves physicians in every specialty and handles tax planning, filing, entity formation, payroll, and bookkeeping.
Laxman shares how it started. His college roommate, Dr. Mark Applegate, became an attending and suddenly needed a tax expert as a 1099 physician. He went through three different tax experts in three years, and then called Laxman, who by then was a CPA. Laxman says they couldn’t find a one stop shop that was proactive and understood tax strategy on a personal level. He points out that many physicians are paying six figure tax bills, so even a $20,000 or $30,000 reduction can add up year after year. Kim joined at the beginning of this year, and she says her passion is helping people keep more of their money so they can reinvest it or spend it how they want.
Peter asks why physicians tend to be so timid about taxes. Laxman says physicians are experts in their own specialty, but when you don’t know what you don’t know, taxes can feel intimidating, and residency doesn’t cover it. Opening the tax code or Googling it can send you down a rabbit hole. In his experience, the need usually becomes clear around April 15th, when a physician sees a tax bill of more than $100,000 and realizes they’re giving up 30 to 40 percent of their income. That pinch is what pushes people to explore their options, and he says Doc Wealth is there to guide that in a compliant way.
Preparer vs. Strategist, and Why Planning Beats Filing
Peter asks what it means to plan taxes proactively. Kim says it’s the difference that makes it. A place that just files in April will hand you the bill and tell you to pay it, while planning with a tax strategist can lower the bill before it hits.
She says her team meets with clients throughout the year to build a plan around their goals, which aren’t always about saving the most on taxes. Some are focused on retirement savings or investments that let them practice less. Laxman adds that there are two ways to build wealth, make more or keep what you have, and he sees tax planning as the second one. Filing, in his words, is just entering numbers into a form, while planning is a year long process.
He makes the timing point clearly. Once January 1st hits, there’s not much you can do to change the previous year’s taxes. He lists things like buying a real estate property, putting your kids on payroll, and funding a solo 401k as examples that can add up to $100,000 to $200,000 in deductions, which at a high marginal rate could mean tens of thousands of dollars that would otherwise go to the government.
When Peter asks how often clients meet with them, Kim says most meet four times a year, which also gives time for education. She says a strategist matters more as income grows into the six and seven figures.
Peter also asks about the different filing deadlines. Kim explains that March 15th is the deadline for partnership and S corporation returns, and April 15th is for personal and C corporation returns, or an extension. An extension adds six months, which means September 15th for business returns and October 15th for personal ones, with no further extension after that. Many physicians extend because K-1s and investment documents arrive late.
When Peter asks whether extending raises audit risk, Kim says it’s a common tool, it gives time to make sure a complex return is accurate, and she doesn’t see it as increasing audit risk.
Strategies for W-2 and 1099 Physicians
Peter says many W-2 physicians feel they don’t have many places to find deductions, and asks if that’s true. Kim says W-2 physicians do have fewer options, while 1099 physicians can use regular business deductions like CME and association dues. For W-2 physicians, she points to HSAs, the backdoor Roth, and maxing out the 401k as the low hanging fruit.
Beyond that are tax advantaged investments. She names the short-term rental with a cost segregation study, because a short-term rental is generally treated as active and can offset W-2 income, while a long-term rental is usually passive and its losses can only offset passive income. She also mentions oil and gas working interests, which she says can reduce taxable income by about 80 to 100 percent of the investment in the year it’s made, though she notes it isn’t for everyone.
Peter asks Kim to explain the short-term rental loophole and cost segregation. Kim says the short-term rental route is a lot more work, and she’s had clients tell her they didn’t realize how much, so some take the benefit in the first year and then turn it into a long-term rental.
Paired with a cost segregation study, she says it can often reduce taxable income by around 20 percent of the purchase price, so about $200,000 on a $1 million property in that tax year. She describes the study as an engineering review that breaks a building into components like flooring, fixtures, and cabinetry so they can be depreciated faster than the standard 27.5 years. It typically costs around $3,000, and her team has referral partners for cost segregation companies and for finding short-term rentals.
They then cover real estate professional status. Kim says it isn’t easy for a physician to reach, since it requires 750 hours and more hours than any other work, so it’s usually a spouse who qualifies. The benefit is that losses are treated as active instead of passive.
For practice owners, she calls the cash balance plan the biggest lever for retirement savings, with contributions of $100,000, $200,000, or $300,000 possible, but she cautions that it’s meant to be permanent, so it works best with steady income. She also mentions hiring a spouse or children, setting up Roth IRAs for kids, and deducting business expenses.
A cash balance plan can be self-directed, and she says gains on things like land or minerals can roll back into the plan without capital gains tax to you personally.
Compliance, Common Mistakes, and Why a Physician-Focused CPA Matters
Peter asks how tax planning connects to flexibility, whether that’s working less, retiring early, or continuing to work. Kim says if you’re saving $40,000, $50,000, or $60,000 year after year, you reach your goals sooner. Some people save $100,000 or $200,000, and she asks who’s to say you can’t go down to four days a week when you aren’t spending that much on taxes.
Laxman then talks about where he sees innovation in the space. He says communication is the biggest complaint physicians have about their CPAs, so his team uses technology for transparency and education. He also stresses compliance, noting that people now bring him things ChatGPT told them, and that you wouldn’t tell a patient to follow what ChatGPT said. His point is that the IRS won’t accept that explanation either.
Peter asks about the biggest mistakes they see. Kim says one is not thinking about the best entity structure, since many people are placed into an S corp automatically, and she gives Tennessee as an example where a state level tax can make that costly. She also sees people leaving tens of thousands of dollars on the table by not using strategies like the Augusta rule, which lets you rent your home to your business for up to 14 days a year, and by not paying a spouse or children and funding retirement accounts.
The mistake she sees most on returns is the backdoor Roth being handled incorrectly, especially when money sitting in a traditional IRA on December 31st affects the result.
Peter asks how far back you can fix things. Kim says you have three years from the due date to amend a return and receive a refund, and past that you can still amend to correct an error but won’t get a refund. When he asks whether a physician should look for a physician specific CPA, Laxman says it matters a great deal. He says many local CPAs aren’t familiar with locums work or multi-state income, and that limits which strategies they know. He says missing one strategy like the Augusta rule could cost $10,000 to $15,000, and that those misses can compound across strategies. He adds that physicians don’t take finance courses, so education matters too.
When to Start, What It Costs, and Questions to Ask
Peter asks when is the best time to start working with a new accountant. Laxman says the end or beginning of the year is ideal, since the more time you have, the more you can do within that tax year. For 2027, he says his team is already thinking about the plan, and from now through February is the best window. October 15th was the last filing deadline for 2025, and he says some physicians show up asking what they can still do for 2026, and with two months left they can review and optimize to a degree. Kim adds that if you want planning for 2026, starting before December 1st leaves time to implement strategies that have to be done during the tax year.
On cost, Laxman says TurboTax runs $200 to $300, a tax filer maybe $500 to $1,500, and some strategists charge $20,000 to $40,000. He frames it as a ratio of savings to price. He says Doc Wealth’s pricing is roughly in the $4,000 to $5,000 range, and that in his view deductions of $50,000 to $200,000 are realistic, which he calls a 5 to 10 times return. Kim adds that for 1099 physicians or practice owners, the cost of preparation and planning is itself deductible. These are the guests’ own views, and results depend on each person’s situation.
Peter asks for the top questions to ask a CPA. Laxman says to ask whether they know strategies like the Augusta rule, cash balance plans, and short-term rentals for your state and city, how quickly they communicate, and whether they’re a one stop shop for entities, payroll, and legal. Kim adds to ask who you’ll actually work with, since some firms hand you off to someone junior, and says Doc Wealth pairs clients with a senior tax leader.
Laxman shares that you can book a free intro call. Peter closes by saying to do your due diligence on taxes, whether it’s Doc Wealth or someone else, and find someone who fits you and your goals.
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