Tax Planning for Physicians in Ann Arbor, MI (2026)
Physicians in Ann Arbor pay federal tax at up to 37% plus Michigan income tax (a top rate of 4.25%), and local rules add another layer. Here is how the 2026 rules apply to doctors, dentists and practice owners in Ann Arbor, MI.
2026 at a glance for Ann Arbor, MI physicians
| Michigan income tax | Top rate of 4.25% (2026) |
|---|---|
| State tax on $400,000 of state taxable income | $17,000 single / $17,000 married filing jointly |
| State tax on $1,000,000 (married filing jointly) | $42,500 |
| City income tax | None |
| Pass-through entity tax | Available (elective) |
| Top federal rate | 37% (from $640,600 single / $768,700 joint) |
State tax figures apply Michigan's 2026 brackets to state taxable income and ignore credits, deductions and local taxes.
Local taxes in Ann Arbor
Ann Arbor is not among the Michigan cities that levy an income tax, so physicians who live and work there pay only the state's flat 4.25% rate. Those who also work in Detroit owe Detroit's 1.2% nonresident tax on Detroit earnings.
State rules that apply in Ann Arbor
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.
- Michigan's flat rate is 4.25%, but Detroit, Grand Rapids, Lansing and other cities add their own income tax.
- Physicians who live outside Detroit but work at Detroit hospitals pay the 1.2% nonresident rate on wages earned in the city.
Where the savings usually come from
For most Ann Arbor 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 Michigan cities: Detroit, Grand Rapids, Lansing.
- State rules: Michigan physician tax guide and all 50 state guides.
- By specialty: Orthopedic Surgeons, Emergency Physicians, Plastic Surgeons, 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.
Frequently asked questions
Does Ann Arbor have a city income tax?
Ann Arbor is not among the Michigan cities that levy an income tax, so physicians who live and work there pay only the state's flat 4.25% rate. Those who also work in Detroit owe Detroit's 1.2% nonresident tax on Detroit earnings.
What state income tax do physicians in Ann Arbor pay?
Michigan has a top rate of 4.25% for 2026. On $400,000 of state taxable income, the 2026 brackets produce about $17,000 for a married couple filing jointly, before credits.
Can GenWealth 360 work with physicians in Ann Arbor?
Yes. GenWealth 360 works with physicians, dentists and practice owners nationwide, including Ann Arbor, through virtual meetings. Our office is in Long Beach, California.
Get a tax plan built for your situation
GenWealth 360 builds proactive, tax-first plans for physicians, dentists and medical practice owners in all 50 states. Start with a conversation about your income, entity and goals.
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Sources
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.