Tax Planning for Physicians in Washington (2026)

Physicians in Washington face no wage income tax (capital gains tax only) on top of the 37% federal bracket and payroll taxes. This guide summarizes the 2026 Washington rules that matter most to doctors, dentists and practice owners.

Washington income tax rates for 2026

Washington does not tax wages or self-employment income. It does tax long-term capital gains above a large annual standard deduction at the rates below.

Pass-through entity tax (SALT workaround)

No elective pass-through entity tax is available, so owners deduct state income tax only through the individual SALT deduction.

Local income taxes

Washington has no wage income tax, but it taxes long-term capital gains above a large standard deduction (7%, with a higher rate on gains above $1 million), and practices pay the Business & Occupation tax on gross receipts. Seattle also levies its own business taxes.

Planning notes for Washington physicians

• Washington does not tax wages, but its capital gains tax applies to large gains on stocks and some business interests, so practice sale structure matters.
• Washington's Business & Occupation tax is based on gross receipts rather than profit, which affects practice owners even in years with thin margins.

Federal strategies that apply in every state

State tax is only part of the picture. The federal rules drive most of the savings for physicians in Washington:

• W-2 physician tax strategies: maximize 401(k)/403(b), 457(b), HSA and the backdoor Roth.
• 1099 physician tax planning: solo 401(k), deductions and the S corporation decision.
• Practice owners: entity, compensation, cash balance plans and exit planning.
• Real estate and cost segregation for physicians with time to participate.

City guides for Washington physicians

Local taxes and planning notes for physicians in Seattle, Spokane, Tacoma, Bellevue. Our planning is delivered virtually, so location does not limit access.

Guides by specialty

Surgeons · Anesthesiologists · Radiologists · Orthopedic Surgeons · Cardiologists · Dentists · Dermatologists · Emergency Physicians · Gastroenterologists · Ophthalmologists · Neurosurgeons · Plastic Surgeons · Psychiatrists · Hospitalists · Pain Management Physicians

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.