Tax Planning for Physicians in Annapolis, MD (2026)

Physicians in Annapolis pay federal tax at up to 37% plus Maryland income tax (a top rate of 6.5%), and local rules add another layer. Here is how the 2026 rules apply to doctors, dentists and practice owners in Annapolis, MD.

2026 at a glance for Annapolis, MD physicians

State tax figures apply Maryland's 2026 brackets to state taxable income and ignore credits, deductions and local taxes.

Local taxes in Annapolis

Maryland residents pay a county (or Baltimore City) income tax on top of the state tax. Annapolis is in Anne Arundel County, where the 2026 local rate is 2.70% to 3.20% (graduated). Anne Arundel uses graduated local rates; for single filers 3.20% applies to Maryland taxable income over $400,000. Nonresidents who work in Maryland pay a special nonresident rate instead of a county rate.

State rules that apply in Annapolis

Yes. The state has an elective pass-through entity tax (PTET) that partnerships and S corporations can use to deduct state income tax at the entity level.

• Maryland added new top brackets of 6.25% and 6.5% for 2025 and later, and the county tax stacks on top, so combined rates for high earners can approach 9.8%.
• Maryland also added a 2% surtax on net capital gains for higher-income taxpayers, which affects practice sales and investment planning.
• Maryland practice owners can elect the state pass-through entity tax.

Where the savings usually come from

For most Annapolis physicians, federal planning drives the largest results: W-2 strategies such as 401(k)/403(b), 457(b) and the backdoor Roth; 1099 and locum planning; entity and cash balance plan design for practice owners; and real estate strategies for physicians with time to participate.

More physician tax guides

• Other Maryland cities: Baltimore, Bethesda, Rockville, Columbia.
• State rules: Maryland physician tax guide and all 50 state guides.
• By specialty: Dermatologists, Neurosurgeons, Pain Management Physicians, Orthopedic Surgeons 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.