Tax Planning Basics for Physicians
Keep more of what you earn as a doctor
Building Tax Awareness Early
Physicians face some of Canada's highest marginal tax rates - up to 54% in some provinces. Even before incorporation becomes viable, understanding basic tax planning can save $10,000-$30,000 annually through proper deductions and contribution strategies.
Start with fundamentals: understand the RRSP vs TFSA decision, track deductible expenses meticulously, and learn quarterly instalment requirements. Proper budgeting helps ensure funds are available for tax obligations.
2026 Tax Planning Thresholds
| Strategy | 2025 Limit | Tax Savings at 50% | Key Deadline |
|---|---|---|---|
| RRSP Contribution | $33,990 (max) | $16,995 | Mar 2, 2026 |
| TFSA Contribution | $7,500 | Tax-free growth | Anytime |
| FHSA Contribution | $8,000 | $4,000 | Dec 31 |
| RESP Grant Max | $500/child (on $2,500) | 20% free money | Dec 31 |
| Moving Expense Deduction | Actual costs (40km+) | Varies | Tax filing |
Tax Planning Fundamentals
RRSP Optimization
Maximize contributions to reduce taxable income, especially in high-earning years.
Deduction Tracking
Document professional dues, CME expenses, equipment, and deductible costs carefully.
Instalment Planning
Set aside funds for quarterly tax instalments to avoid interest and penalties.
Income Timing
Consider timing of income and deductions to smooth tax burden across years.
Common Mistakes
- • Not maximizing RRSP contributions in high-income years
- • Missing deductible expenses from poor record-keeping
- • Ignoring instalment requirements and paying penalties
- • Not claiming moving expenses for training relocations
- • Waiting too long to incorporate when eligible
- • Not tracking vehicle use for work-related travel
Keys to Success
- • Contribute maximum RRSP at 50%+ marginal rates
- • Use accounting software to track all deductible expenses
- • Set aside 25-30% of income for taxes if self-employed
- • Work with physician-specialized accountant
- • Review incorporation timing at $150K+ income
- • Use TFSA for tax-free investment growth
More in Early Career
Continue exploring topics in this category
Explore Other Topics
Discover more resources for your financial journey
Turn Your Wealth Into Meaningful Impact
Whether you want to build a legacy, involve your family, or support causes close to your heart, our team will guide you every step of the way.
Let's design a philanthropic strategy that reflects your values - today and for generations to come.