Tax Planning for Physicians in Louisville (2026)

Louisville Metro (all of Jefferson County) levies an occupational license tax on wages and on the net profits of businesses and self-employed professionals. With Kentucky's state rate down to 3.5%, the local tax is a large share of a Louisville physician's total.

2026 at a glance

Planning priorities

• The tax applies to gross wages, not taxable income, so pre-tax 401(k) deferrals do not reduce it.
• Some suburban cities in Jefferson County, such as Jeffersontown and St. Matthews, add their own occupational taxes.
• Practice owners file a net profits return with the Louisville Metro Revenue Commission in addition to state returns.
• Indiana residents who work in Louisville pay the 1.45% nonresident rate.

See the full Kentucky physician tax guide.

More physician tax guides

• Other Kentucky cities: Lexington, Bowling Green, Covington.
• State rules: Kentucky physician tax guide and all 50 state guides.
• By specialty: Ophthalmologists, Hospitalists, Radiologists, Dermatologists and every specialty.
• Core strategy: tax planning for physicians, tax planning for medical practice owners, advanced strategies for high-income physicians and S corporation tax planning for physicians, plus the physician tax glossary.

This article is for general educational purposes and is not tax, legal or investment advice. Tax law changes often and its application depends on your facts. Figures reflect 2026 rules as published by the sources listed above. Consult a qualified professional before acting. See our editorial policy.