Tax Planning

Withholding Setup for Your First Attending Paycheck

By the Attend Wealth team · Updated August 2026 · 7 min read

The W-4 you fill out on your first day is designed for someone whose income this year resembles their income last year. Yours does not, and the default will be wrong in a predictable direction.

Quick answer

For 2026 there are seven federal rates, topping out at 37% above $640,600 for single filers and $768,600 for married filing jointly. The standard deduction is $16,100 single and $32,200 married filing jointly. A new attending starting mid-year is usually over-withheld in the first partial year and under-withheld in the first full year, because payroll annualizes each paycheck as if it represented the whole year.

The 2026 numbers you are working with

The IRS released 2026 inflation adjustments in October 2025. Tax parameters rose roughly 2.7% on average, indexed using the Chained CPI. There are seven rates: 10, 12, 22, 24, 32, 35, and 37 percent. The top rate applies above $640,600 for single filers and $768,600 for married couples filing jointly.

The standard deduction for 2026 is $16,100 for single filers and married filing separately, $32,200 for married filing jointly, and $24,150 for heads of household. An additional $2,050 applies if you are 65 or older or blind.

Why payroll gets a new attending wrong

Payroll withholding annualizes. It looks at a single paycheck and computes withholding as though every paycheck this year will be the same size. For someone with steady income that works well.

A physician who starts in August has seven months of resident income and five months of attending income. Payroll on the attending job annualizes the attending paycheck, over-withholding relative to the actual blended year. Then the following January, the first full attending year begins, and other factors, particularly a working spouse, start pushing the other direction.

The two-earner problem

The most common cause of a large April balance for physician households is two W-4s each computed as if that job were the household's only income. Each job withholds as though its own income sits alone in the lower brackets, and the combined household income lands well above where either calculation assumed.

The W-4 has a step for this, and there is an IRS withholding estimator that handles it properly. Both are routinely skipped. If your household has two incomes and you have never used either, that is likely the single highest-value form you will fill out this year.

  • Use the IRS Tax Withholding Estimator with both spouses' income entered
  • Complete the multiple-jobs step on the W-4 rather than leaving it blank
  • Re-run the estimate in January of your first full attending year
  • Account for bonus and moonlighting income, which is often withheld at flat supplemental rates
  • Revisit after any contract change, spouse job change, or new child

Bonuses are withheld differently

Signing bonuses and other supplemental wages are frequently withheld at a flat supplemental rate rather than at your marginal rate. For a physician whose marginal rate is 35% or 37%, a bonus withheld at a lower flat rate creates a shortfall that shows up at filing.

If you received a large signing bonus, check what was actually withheld against what your marginal rate implies, and adjust W-4 withholding for the rest of the year to close the gap.

How this connects to retirement contributions

Withholding and deferral interact. Maxing a 403(b) at $24,500 and a 457(b) at another $24,500 reduces taxable income by $49,000, which changes what you should be withholding. Physicians who set withholding in January and then start large deferrals in March often end up over-withheld.

Set the retirement contribution strategy first, then compute withholding against the resulting taxable income, rather than the reverse.

Related physician planning questions

What are the 2026 federal tax brackets?

Seven rates: 10, 12, 22, 24, 32, 35, and 37 percent. The top 37% rate applies to taxable income above $640,600 for single filers and $768,600 for married couples filing jointly. Parameters rose about 2.7% from 2025, indexed by Chained CPI.

What is the 2026 standard deduction?

$16,100 for single filers and married filing separately, $32,200 for married filing jointly, and $24,150 for heads of household. An additional $2,050 applies if you are 65 or older or blind.

Why do new attendings owe money at tax time?

Most often because of two-earner households where each W-4 is computed as though that job is the household's only income, and because bonuses are withheld at flat supplemental rates below a physician's marginal rate. Payroll also annualizes each paycheck, which distorts partial-year transitions.

How should a new attending set up their W-4?

Use the IRS Tax Withholding Estimator with all household income entered, complete the multiple-jobs step rather than leaving it blank, and re-run the estimate in January of your first full attending year. Set your retirement deferral strategy first, since large 403(b) and 457(b) contributions change taxable income substantially.

How are signing bonuses withheld?

Typically at a flat supplemental wage rate, which is often below a physician's marginal rate of 35% or 37%. That gap becomes a balance due at filing unless you adjust withholding for the remainder of the year.

Related insights

Sources

Figures current as of August 7, 2026. Contribution limits, tax thresholds, and federal loan program rules change; verify against the primary source before acting.

See how this fits into a physician-focused plan.

Attend Wealth helps physicians connect planning, taxes, investing, insurance, and retirement decisions into one strategy. If you want help applying this topic to your own loans, taxes, investments, or retirement plan, schedule a complimentary conversation.

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