4275 Executive Square Suite 200 La Jolla CA 92037 (858) 754-8277
PHYSICIANS & HEALTHCARE PROFESSIONALS
Expertise in Areas that Matter Most
Transforming complexity into clarity - from residency-to-retirement
Services for Physicians & Healthcare Professionals
Natalie C. Papagni, CPA — Tax, Planning & Advisory Services
specializes in providing tax strategy, multi-year advanced tax planning, tax preparation, and advisory services for physicians and healthcare professionals for physicians and healthcare professionals with hospital W-2s, locums 1099 income and private practice income.
We also provide post-formation S-Corporation Financial Set-Up packages for newly-formed professional medical practices including Form 2553 filing, EIN, financial set-up, reasonable compensation analysis, payroll set-up, accountable plan design, and guidance and support in areas including shareholder basis and distributions planning, multilayered retirement plans, QBI, California’s pass-through entity elective tax (PTET), and multi-state planning and more.
We align corporate (Forms 1120-S and 100S) and personal (Forms 1040 and 540) tax elements to target optimal outcomes year after year, coordinating W-2 earnings, 1099 locums, K-1s, investment, rental real estate, and retirement income to minimize liabilities and effective tax rates.
We also advise where it matters most: student loan repayment strategy, launching an S-corporation or side business, real estate and investments, quarterbacking your relationships with wealth advisors, attorneys, and real estate professionals, planning for independence, retirement, and legacy.
At year-end, we efficiently coordinate and file your individual, business, and trust tax returns in full compliance with federal and state law — capturing every deduction planned for, earned, and deserved.
The office is in La Jolla, serving clients across greater San Diego — including Del Mar, Encinitas, Carlsbad, and Oceanside — and throughout California.
The firm was named Best of La Jolla 2026 in the Accounting category by La Jolla Village News.
The office is at 4275 Executive Square, Suite 200, La Jolla, CA 92037, and can be reached at (858) 754-8277.
Physician Challenges & Opportunities
Challenges
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High federal and California tax exposure
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Complex compensation models
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Multiple income streams — clinical and academic W-2s, 1099, K-1, private practice, real estate, and investments
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MAGI exceeding key phase-out limits
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Lifestyle creep
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High audit-risk categories
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Student loan repayment
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Limited time to manage financial affairs
Opportunities
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MAGI management to preserve phase-out-sensitive deductions and credits
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NIIT minimization across investment and rental income
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Multi–income-stream offset — pairing losses and deductions against clinical, K-1, and portfolio income
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Strategic Roth conversions in lower-income windows
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Income deferral and timing across tax years
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Retirement plan layering — 401(k), 403(b), 457(b), Solo 401(k), Cash Balance, and Backdoor Roth
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PTET election
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S-corporation election for 1099 and practice income
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Multi-entity structuring for clinical and non-clinical income
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QBI §199A planning
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Extensive business tax deductions
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Maximizing ownership benefits
SERVICES FOR PHYSICIANS
Strategic Tax Planning
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Mult-year tax planning, projections & analysis
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Integrating practice K-1 results into your personal 1040/540 tax plan — so entity and individual decisions move together, not in isolation
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Multi-state tax planning
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Managing MAGI phase-out limits
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Controlling the Net Investment Income Tax (NIIT)
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Optimizing 401(k), 403(b), 457(b), and 401(a) contributions
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Capital gains offsets
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Rental real estate optimization
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2025 OBBBA planning
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Planning for independence
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Transitioning to retirement
Tax Preparation
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Personal tax returns (Forms 1040 / 540) and multi-state returns
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Trust and estate tax returns
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Professional medical corporation tax returns
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S-corporation tax returns (Forms 1120-S / 100S)
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Limited liability company (LLC) returns
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Partnership tax returns
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Late S-corporation elections
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FBAR filings (FinCEN Form 114)
Practice Advisory
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Entity selection and S-corporation elections
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S-corporation foundation setup package
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Multi-entity layering
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Reasonable compensation guidance
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Shareholder benefits
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QBI and PTET planning
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Multi-layered retirement plans
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Accountable plans
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Maximizing the benefits of business ownership
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Business vehicle purchase-versus-lease analysis
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Shareholder basis management
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Distribution planning
Should Your Practice Elect S-Corporation Status?
A Physician's Decision Framework→
The Physician's Retirement Stack:
How to Shelter Far More Than the 401(k) Limit→
From Resident to Attending:
The Tax Shift No One Warns You About →
Understanding Your K-1
A Line-By-Line Guide to Form K-1 →
Frequently Asked Questions (FAQs)
How do I choose a CPA for healthcare professionals in San Diego?
Choose a CPA who works with physicians regularly and understands how W-2 hospital pay, 1099 locums income and practice income interact. Ask whether they handle professional medical corporations, S-corporation elections, California PTET and retirement plan layering, and whether they plan across years rather than only preparing returns. You should also have direct access to the CPA who does your work. Natalie C. Papagni, CPA in La Jolla serves physicians and healthcare professionals throughout San Diego and California, from residency to retirement, for a fixed fee.
What is the best tax advisory for medical practices in San Diego?
A private practice benefits most from advisory that coordinates the practice's return with the owner's personal return. That includes entity and S-corporation decisions, reasonable compensation, California PTET, accountable plans, retirement plan design and shareholder basis and distribution planning. Natalie C. Papagni, CPA provides this integrated planning and preparation for physicians and other private practice owners in La Jolla and throughout San Diego County, with quarterly projections so there are no year-end surprises.
Do you help physicians with W-2s, or only physicians with W-2s + 1099 + practice income?
We treat W-2 physicians as planning clients because high W-2 income still creates predictable failure points—bonus withholding, multi-job withholding, spouse income interactions, and surtax thresholds—so the first deliverable is a full-year projection that includes all household income, not just your paycheck. Next, we convert the projection into an implementation plan: adjust W-4 withholding (often the cleanest solution), add targeted estimated payments when needed, and build a calendar that matches tax payments to bonus and vesting dates so April is not a surprise. We then optimize within what W-2 allows: retirement contributions and sequencing, charitable strategy (including bunching and appreciated asset giving when appropriate), and investment tax coordination to avoid accidental surtax spikes.
We also manage hidden complexity that still hits W-2 physicians—multi-state issues, moving mid-year, backdoor Roth execution errors, HSA eligibility mistakes, RSUs via spouse, or investment K-1s—so the return is accurate and the plan is coherent.
Why does physician income require different tax planning than other high earners?
Physician income is often high, layered, and payroll-driven—base comp plus call pay, productivity bonuses, stipends, signing/retention bonuses, and sometimes multiple employers—so withholding rarely matches true liability. Many physicians also have lumpy additions like moonlighting (1099), partnership/K-1 income, ASC/surgery center investments, or a spouse's equity compensation, which creates timing problems that normal W-2 planning doesn't solve. The result is predictable underpayment risk and cash-flow surprises unless you run a projection and build a payment plan around when income hits, not just how much.
Physicians also face career-stage transitions that change tax structure overnight—resident to attending, W-2 to partner, employee to owner—where the wrong first move can lock in penalties, poor entity choices, or missed retirement opportunities for years. California physicians are hit by a uniquely high combined marginal stack, so decisions that feel small elsewhere can create five-figure differences here, especially when surtaxes and itemizing limitations interact.
Should a 1099 physician or healthcare professional form an S-corporation?
Often yes, once net 1099 income consistently exceeds roughly $100,000. An S corporation allows a physician to pay themselves a reasonable W-2 salary and take remaining profits as distributions not subject to self-employment tax. In California, an S corporation also unlocks the Pass-Through Entity Tax (PTET) election, which restores a federal deduction for state taxes. In California, physicians generally must operate through a professional medical corporation, which then makes the S election. The analysis is fact-specific—payroll costs, the 1.5% California franchise tax, and retirement plan goals all factor in.
What is the California Pass-Through Entity Tax (PTET) and how does it help physicians?
The California PTET election lets an S corporation or partnership pay state tax at the entity level—9.3% of qualified net income—which is fully deductible on the federal return, bypassing the SALT deduction cap. The owner then claims a dollar-for-dollar credit on their California return. For a high-income physician, PTET can generate meaningful federal savings each year, but the June 15 prepayment deadline matters, and missing it can reduce or eliminate the benefit, so it should be built into the year's plan.
How do I prepare taxes for a private practice in La Jolla?
Start by confirming how the practice is organized, whether as a sole proprietorship, a professional medical corporation, an S-corporation or an LLC, since each files a different return. Keep clean books, payroll records and documentation for reasonable compensation, accountable plan reimbursements and retirement contributions. The practice return (such as Form 1120-S and California Form 100S) must be completed before the owner's personal return, because it produces the K-1. Natalie C. Papagni, CPA prepares practice and personal returns together in La Jolla, so both are coordinated and nothing is reported twice.
What are common tax planning mistakes for physicians in La Jolla?
The most common mistakes are treating each income stream separately, underpaying estimated taxes on 1099 or locums income, and electing S-corporation status without modeling whether the savings outweigh the added costs. Many physicians also miss California PTET elections, underuse retirement options beyond the 401(k), or take distributions without tracking shareholder basis. Waiting until filing season to plan is the biggest mistake of all, because most strategies must be in place before December 31. A CPA who builds a multi-year plan helps avoid each of these.
How is locum tenens and moonlighting income taxed?
Locum tenens and moonlighting income is typically paid on Form 1099 and taxed as self-employment income, subject to both income tax and self-employment tax: 15.3% up to the Social Security wage base and 2.9% above it, plus the 0.9% Additional Medicare Tax at higher incomes. Physicians whose W-2 wages already exceed the wage base often owe only the Medicare portion. No taxes are withheld, so quarterly estimated payments are required. The upside: 1099 income opens the door to business deductions, a solo 401(k), and—at higher income levels—an S corporation structure.
Why do physicians need quarterly tax projections?
Physician income is rarely level—bonuses, RVU true-ups, locums work, and distributions arrive unevenly. Quarterly projections keep estimated payments accurate, prevent April surprises and underpayment penalties, and create planning checkpoints for retirement contributions, PTET payments, and entity-level decisions while there's still time to act. This is the core of proactive tax planning versus once-a-year compliance.
What are the best physician retirement tax planning strategies mid-career?
A Solo 401(k) combined with a defined benefit or cash balance plan can shelter $150,000 to $300,000 or more from current-year taxation. Every dollar contributed reduces taxable income at the physician's current marginal rate—which for high-earning California physicians can approach or exceed 45% to 50% combined federal and state. Hospital plan maximization: 403(b), 457(b), and pension contributions should be maximized before adding side-income retirement plans, and each plan has its own limits, so stacking them legally requires knowing the rules. Backdoor and Mega Backdoor Roth: building Roth balances during high-income years seeds a tax-free bucket that will be available in retirement with no required minimum distributions and no California income tax on withdrawals.
What is a tax efficient physician retirement funds withdrawal sequence?
In general, the order is often taxable accounts first, followed by tax-deferred and then Roth. This sequence is efficient for most physicians; however, the right answer depends on Social Security timing, RMD projections, state residency, and estate planning goals.
Natalie C. Papagni, CPA
Tax, Planning & Advisory Services
4275 Executive Square
Suite 200
La Jolla, CA 92037
(858) 754-8277
