A doctor earning $600K finally stopped overpaying the IRS

The Situation

Sarah had been a practicing anesthesiologist for eleven years when she first reached out to Alphanso. She was a partner at a large hospital-affiliated practice in Texas, bringing home around $580,000 a year, a mix of W-2 income from the practice and 1099 income from a few locum shifts she picked up on the side. By any measure, she was financially successful. She owned her home outright, had no consumer debt, and had been faithfully maxing out her 401(k) since residency.

She also wrote a check to the IRS every April for somewhere between $90,000 and $110,000. She assumed that was just the cost of earning well. She had a CPA she trusted, a brokerage account she had been adding to for years, and a vague sense that there was probably more she could be doing, but no one had ever sat down with her and made a real case for what that looked like in practice.

The Gap We Found

Sarah's CPA was doing exactly what CPAs do well: accurate filing, clean returns, solid documentation. What was not happening was proactive tax planning in the months before December. The locum income, about $85,000 annually, was flowing through a sole proprietorship with no structure around it, meaning she was paying self-employment tax on the full amount, and leaving a handful of deductions completely untouched. More significantly, Sarah had never been introduced to investment strategies that could generate meaningful above-the-line deductions against her ordinary income. At her marginal rate, 37% federal, plus Texas has no state income tax which was her one break, every dollar of legitimate deduction was worth $0.37 back.

What We Did

The first move was structural. Alphanso recommended Sarah elect S-Corp status for her locum income by setting up a simple professional LLC. By paying herself a reasonable salary and taking the rest as a distribution, she eliminated self-employment tax on roughly $65,000 of that income, saving approximately $9,200 annually on that change alone.

The second move was a $100,000 investment into an oil and gas partnership, a direct participation program that qualified for an immediate intangible drilling cost deduction. In her tax bracket, that $100,000 investment generated roughly $37,000 in federal tax savings in year one. Sarah had heard of these before but assumed they were for people with far more complicated financial lives. The mechanics were simpler than she expected: the investment produces real energy income over time, and the upfront deduction is a legitimate feature of the tax code designed to incentivize domestic energy production. It is not a loophole, it is the law working as intended for investors in her bracket.

Third, Sarah had never done a backdoor Roth IRA because she earned too much to contribute directly. We set one up in January, $7,000 contributed to a traditional IRA, immediately converted to Roth, with no deduction on the way in and no tax on the growth going forward. We also reviewed her practice's 401(k) plan and found she was eligible to add a cash balance pension plan alongside it, allowing her to shelter an additional $80,000 or more per year in pre-tax contributions, dramatically above what the 401(k) alone permitted.

The Result

• $37,000 in federal tax savings in year one from the oil and gas investment alone
• $9,200 saved annually by restructuring locum income through an S-Corp election
• $80,000+ in additional pre-tax retirement contributions via cash balance pension plan
• Backdoor Roth IRA opened, tax-free compounding on $7,000 per year going forward
• Effective tax rate dropped from 38% to 26% in the first full planning year

Why This Worked

Sarah was not missing discipline or income. She was missing a plan built around her specific situation, one that treated her W-2 income, her 1099 income, her investment account, and her retirement vehicles as a single system rather than separate buckets. Each strategy above was available to her before she came to Alphanso. The S-Corp election, the oil and gas deduction, the cash balance plan, none of it required unusual risk or complexity. What it required was someone whose job was to look at everything together, proactively, and surface the options with clear reasoning before the tax year closed. Alphanso's flat-fee model means there is no incentive to recommend any product or strategy that does not genuinely serve the plan. If Sarah's situation feels familiar, it is worth a conversation.

This case study is a composite illustration based on real Alphanso client scenarios. Names and identifying details have been changed for privacy. Results are not guaranteed and will vary based on individual circumstances. All investing involves risk, including the possible loss of principal. Alphanso LLC is a registered investment adviser.