Stop Overpaying Taxes: A Tax Strategist Reveals the Strategies Doctors Are Missing Featuring Rachel Michaelov, EP 274
Here's a question that might make you uncomfortable: How much of your hard-earned income are you handing to the IRS every quarter? For many healthcare practice owners—doctors, dentists, psychiatrists—the answer is: too much. In this episode of The Thriving Practice Podcast, Tracy Cherpeski sits down with Rachel Michaelov, an Enrolled Agent and tax strategist who works exclusively with high-earning healthcare professionals. Together, they unpack why so many brilliant, busy practice owners are overpaying their taxes blindly, sometimes by hundreds of thousands of dollars per year.
Rachel is the founder of Empire Tax Advisors and Practice Wealth Partners, firms that serve doctors, dentists, and healthcare providers nationwide. She's licensed by the IRS and holds credentials in all 50 states. But here's what makes her different from your typical CPA: she doesn't just file your returns after the year is over. She works with you proactively throughout the year to implement strategies that legally reduce your tax liability—strategies many practice owners have never even heard of.
If you're a practice owner who feels like financial stress is stealing your time, your peace of mind, and your ability to reward your team—this conversation is essential. Because the money you save in taxes isn't just a number on a spreadsheet. It's time with your family. It's the ability to build real wealth. It's the freedom to work less and serve your patients better. Let's talk about how to make that real.
Key Takeaways
• Most healthcare providers are working with CPAs, not tax strategists. A CPA often handles bookkeeping, payroll, and tax prep. A tax strategist works proactively throughout the year to implement strategies that reduce your liability before you owe it.
• Entity selection mistakes are expensive. Many practice owners end up as sole proprietors or single-member LLCs instead of S-corps, which means they pay 15.3% more in payroll taxes and face higher audit risk.
• Reasonable compensation is misunderstood. Doctors paying themselves $60,000–$70,000 a year while making $1+ million in revenue aren't protecting themselves; they're setting themselves up for audit and overpaying in taxes.
• Cost segregation and R&D credits are real strategies available right now. Most doctors have never heard of them. A cost seg study on a $1 million building can give you a $400,000 deduction with zero additional tax liability.
• Fragmented service providers cost you money and stress. When your bookkeeper, payroll processor, and CPA don't communicate, you end up with wrong numbers, wrong liability projections, and wrong strategies.
Q&A
**What's the difference between a CPA and a tax strategist?** A CPA (or dental/medical CPA) is typically reactive. They wait until year-end, gather your information, and file your return. They tell you how much you owe. A tax strategist is proactive. They review your numbers throughout the year, project your liability, and implement strategies during the year to reduce that liability before it comes due. The best situation is having someone who does both: tax strategy AND tax preparation under one roof.
**Why do so many doctors overpay in taxes even though they have a CPA?** Most CPAs are trained in bookkeeping, payroll, and return prep. They aren't trained in advanced tax strategies like cost segregation, R&D credits, accountable plans, and strategic entity selection. It's not that they're bad CPAs—it's that they specialize in a different area. The problem is that doctors often assume their CPA is handling strategy, when they're really only handling the basics. Ask your CPA directly: "Are you going to present me with specific strategies to reduce my liability?" If they don't have a clear answer, it's time to find someone who does.
**What are the three biggest tax mistakes Rachel sees practice owners making?** First: Payroll mistakes, especially reasonable compensation. Doctors often guess at their own salary or let a payroll provider decide, resulting in either overpayment through excess W-2 wages or underpayment that triggers audit risk. Second: Wrong entity selection. Many practice owners end up as sole proprietors or single-member LLCs, paying 15.3% more in self-employment taxes and facing higher audit risk. Third: Fragmented services. When your bookkeeping, payroll, and tax strategy are handled by different people who don't talk to each other, information gets lost, numbers are wrong, and strategies can't be properly implemented.
**What is cost segregation, and why haven't I heard of it?** Cost segregation is a strategy used when you buy or build a property (like your practice building). Normally, commercial buildings depreciate over 39 years. But with a cost seg study, you can accelerate certain components of that depreciation into 5 and 7 years instead. On a $1 million building, this might give you a $400,000 deduction in year one—with zero additional cost. Most doctors haven't heard of it because many CPAs don't specialize in it. It requires working with a specialist, but the payoff is significant.
Episode Highlights
• Rachel's origin story: why she specializes in healthcare professionals and why she's passionate about this work
• The real-life example: A doctor with a $1.2 million tax liability who walked away with a $24,000 refund
• Why doctors are "slaves to their job" even though they started a practice for freedom
• The hidden cost of overpaying taxes: time with family, inability to reward your team, delayed retirement
• Rachel's personal story: her father and why she's so emotionally invested in helping doctors
• Three common myths: "Successful people just pay taxes," "You can't reduce taxes if you're a W-2 employee," "If my CPA hasn't mentioned it, it must not be available"
• The framework: How to interview a tax strategist and ask the right questions
• The mindset shift: From passive ("tell me what I owe") to active ("show me my options")
Memorable Quotes
"That's reactive. And that's how people stay poor."—Rachel Michaelov
"You have a CPA all year round. How do you have a $500,000 tax liability? How does that make sense?"—Rachel Michaelov
"Don't be afraid of your CPAs. Ask questions. Where are my numbers? Can we get on a Zoom? Can you show me QuickBooks live?"—Rachel Michaelov
"I could save a client $200k in taxes in my sleep."—Rachel Michaelov
"Saving taxes is easy. You just need to go to the right specialist, and they can help you."—Rachel Michaelov
"If you're overpaying in taxes by $300,000 or $500,000 a year, what happens in retirement?"—Rachel Michaelov
"You don't have to overpay in taxes. You don't have to be reactive. And you don't have to do it alone."—Tracy Cherpeski
Rachel Michaelov doesn't believe in accepting overpayment as the cost of success. She believes that high-earning healthcare professionals deserve to keep more of what they earn, to have more time with their families, and to have the financial freedom to run their practices the way they want to. For practice owners who are tired of writing big tax checks every quarter and wondering "is there a better way?"—the answer is yes. The question isn't whether you can reduce your taxes legally. The question is whether you're willing to be proactive instead of reactive. If you're ready to find out, head to cfocall.com and schedule a consultation. Whether you work with Rachel's team or not, the conversation alone might change the way you think about your money. And that's worth the call.
Guest Bio:
Rachel Michaelov is an Enrolled Agent and founder of Empire Tax Advisors and Practice Wealth Partners, where she specializes in proactive tax strategy for healthcare professionals. With over a decade of experience—including years managing a team of accountants at a prominent CPA firm—Rachel has developed deep expertise in helping doctors, dentists, and practice owners legally reduce their tax burden through advanced strategies like cost segregation and R&D credits. As an NTPI Fellow, she's mastered IRS correspondence and complex tax scenarios. Rachel is licensed to practice before the IRS in all 50 states. Outside work, she's devoted to her family and draws inspiration from helping high-earning professionals reclaim their time and financial freedom.
Find Rachel:
Website: https://www.practicewealthpartnersco.com/
Instagram: @practicewealthpartnersinc
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