In college, I ate a lot of $1 microwave dinners.
I mention it because of what those years taught me about money, which had very little to do with the dollar amounts. When you have almost nothing, every financial event happens to you. Rent goes up, a car breaks down, a check clears late, and you react. The first real wealth I ever built was the ability to see some of those events coming and decide about them in advance.
With about two months left in 2026, it’s worth asking a similar question about this year, at a very different income level. A lot happened to orthopedic surgeons in 2026. The interesting part is how much of it you saw coming, and how much you decided about before it decided for you.
What Happened This Year
Four developments changed the landscape.
The tax rules changed substantially. Several provisions of the 2025 tax law took effect in 2026; others were already effective in 2025. The qualified business income deduction became permanent, although an orthopedic practice generally falls within the specified service trade or business rules. For married couples filing jointly in 2026, the deduction on that practice income phases out between $403,500 and $553,500 of taxable income, measured before the QBI deduction.
The law also made 100% bonus depreciation permanent for qualifying property, generally acquired and placed in service after January 19, 2025. The 2026 state and local tax deduction cap rose to $40,400 for joint filers, but an income-based reduction begins above $505,000 of modified adjusted gross income and can bring that cap back down to $10,000.
Charitable giving picked up a new hurdle: itemizers generally can deduct only contributions exceeding 0.5% of adjusted gross income. A separate limitation generally caps the federal benefit of itemized deductions offsetting top-bracket income at 35%. And under an earlier law, SECURE 2.0, affected retirement-plan participants whose prior-year wages from the sponsoring employer exceeded $150,000 generally must make age-based catch-up contributions as Roth contributions beginning in 2026.
Practice economics shifted again. The 2027 Medicare Physician Fee Schedule proposal raised another reimbursement concern. AAOS reported that CMS estimated a roughly 7% specialty-wide reduction in allowed charges from the proposed changes and described proposed relative value unit reductions exceeding 20% for certain hip, knee, and shoulder arthroplasty codes. Those were proposed changes, not a prediction of any individual surgeon’s revenue.
Consolidation remained part of the landscape. Practice combinations, affiliations, and outside investment continued to shape discussions about orthopedic practice ownership and independence. The implications depended on the group, its market, and the terms of any transaction—not simply whether a deal happened.
Rates turned. In September, the Fed raised rates for the first time in more than three years. For a practice carrying variable-rate debt, that could increase interest expense as the applicable loan benchmark resets.
Reacting Versus Executing
Here’s the reframe I want to offer. You could not personally control those developments. But you could review how your own financial structure would respond.
Consider two fictional surgeons, each with $1.1 million of income from a combination of S-corporation wages and pass-through income.
The first handled each issue as it surfaced. He read about the higher SALT cap and assumed it helped. He left his annual pretax 401(k) contribution at $16,000. His practice did not evaluate an available state pass-through entity tax election. His charitable giving went out by check in December, the same as always.
The second had decided in advance to revisit those decisions.
Her practice evaluated and made an eligible pass-through entity tax election. In an illustrative state imposing a 6% entity-level tax on $600,000 of pass-through income, that produces a $36,000 entity-level tax payment. If fully deductible and allocated to her, that deduction could reduce federal income tax by approximately $13,320 at a 37% marginal rate. IRS guidance permits qualifying state income-tax payments by S corporations and partnerships to be deducted at the entity level.
She also increased her regular pretax 401(k) contribution from $16,000 to the 2026 limit of $24,500. That additional $8,500 could reduce current-year federal income tax by $3,145 at a 37% marginal rate. This is tax deferral, not tax elimination: pretax retirement contributions and their earnings generally are taxable when distributed.
Together, those two decisions could reduce current-year federal income tax by approximately $16,465 under the illustration’s assumptions.
Those assumptions matter. The example assumes a valid and timely state PTET election and payment, full allocation of the $36,000 deduction to the surgeon, no offsetting loss of personal SALT deductions, sufficient taxable income remaining in the 37% bracket, and eligibility to make the additional pretax contribution. State rules, plan provisions, and individual tax circumstances can change the result.
She also reviewed whether concentrating two years of charitable giving into one year made sense. Bunching contributions may reduce repeated exposure to the new 0.5%-of-AGI floor. A donor-advised fund can support that timing strategy while allowing grants to charities over time, but contributions are irrevocable, deduction limits apply, and fund fees matter. No charitable-giving savings are included in the $16,465 illustration.
Same income. Same headlines. Different decisions.
The point is not that every surgeon has a $16,465 opportunity waiting. It’s that a headline does not tell you whether a change helps you, hurts you, or requires action.
The first surgeon won’t get a letter telling him which opportunities he missed. His return will simply reflect the decisions he made—and the ones he never revisited.
Your Own One-Page Review
Before the year closes, try this. Draw a line down the middle of a page. On the left, list what happened to you financially this year. On the right, list what you decided in response—or had already planned for.
Then look at the two columns.
If the right column is short, treat it as information, not a judgment. It may point to the decisions worth reviewing with your financial planner and tax adviser before year-end, and the structure worth putting in place for 2027.
The Lesson Underneath
I come back to this belief constantly: wealth is control. Not control over Congress, reimbursement policy, interest rates, or markets. Control over the decisions you can make.
Structure is how you exercise that control: deciding in advance what you will review, when you will act, and how your money should respond when the world shifts.
Luck plays a part in every financial life, mine included. Preparation is the part you get to choose.
The $1 dinners taught me that when I had very little. The same lesson still matters at a very different income level.
Looking back at your own 2026, which column is longer?
Capably Yours,
Jared
DISCLAIMER
This article is for informational and educational purposes only and does not constitute investment, tax, or legal advice. It does not take into account the specific objectives, financial situation, or needs of any particular person. You should consult your own tax, legal, and investment professionals before acting on any information contained herein. Capable Wealth, a New York registered investment adviser, provides advisory services only where properly licensed or exempt from licensing.