From Burnout to Buyout: Tax Steps Doctors Should Know Before Early Retirement

Jul 30
2 min read

Updated: Aug 4

Many doctors reach a point where the long hours and stress lead them to consider early retirement. While your focus is on stepping away from practice, it’s critical not to overlook the tax steps that can help you keep more of what you’ve earned before you retire.

At ISTAXPro, we provide accurate bookkeeping and tax return preparation for doctors and dentists, ensuring your numbers are organized and your returns are filed correctly so your transition into early retirement is smoother.

Here’s what to know as you prepare:

Accounting for Doctors

Book Now

1. Keep Your Bookkeeping Accurate Before You Exit

Accurate, up-to-date books are essential for:

● Understanding your practice’s financial position before planning a sale.

● Supporting equipment depreciation, deductible expenses, and accurate income tracking.

● Providing clean financial statements that can support a practice valuation.

Clean books ensure your final years in practice are compliant and that you are ready for tax filing without unnecessary stress.

2. Maximize Retirement Contributions Before You Retire

Before retirement, continue to fully fund your allowed retirement plan contributions:

● Max out your 401(k) or IRA contributions each year while you are earning.

● This helps reduce your taxable income in your final working years, ensuring you keep more of what you’ve worked hard to earn.

At ISTAXPro, we ensure these contributions are accurately captured on your returns, aligning your tax filings with your retirement plans.

Tax Resolutions: Offer & Compromise

Book Now

3. Plan for the Tax Side of Selling Your Practice

If you are planning to sell your practice before retirement:

● Understand that the sale will generate taxable income, and accurate record-keeping is essential for calculating gains and the associated tax.

● Your depreciation schedules, equipment purchases, and goodwill allocations must be properly reflected in your tax filings.

While ISTAXPro does not advise on structuring your sale, we ensure accurate tax return preparation to reflect the sale properly and in compliance with IRS requirements.

4. Maintain Compliance and Avoid Surprises

Early retirement can change your income, deductions, and estimated tax payment needs. Filing your returns accurately and on time:

● Helps you avoid IRS penalties.

● Provides peace of mind as you step into retirement.

● Ensures you have a clear understanding of your tax position before you exit practice.

Accurate Tax Filing Supports a Smooth Transition

Early retirement is a major milestone, and while you focus on stepping away from your practice, ISTAXPro ensures your financial records and tax filings are clean, accurate, and compliant during your final working years and into your transition.

Accounting for Dentists

Book Now

Ready to File Accurately Before Your Retirement?

ISTAXPro provides bookkeeping and tax return preparation for doctors and dentists, helping you maintain compliance and peace of mind as you prepare for early retirement.