Worried About Missing Medical Practice Tax Deductions
You entered the healing arts to take care of patients, not to spend hours or days figuring out your taxes. Although paying your taxes is inevitable, taking all the medical practice tax deductions you’re allowed makes paying your fair share a bit more palatable. Here are some tax deductions that medical professionals often miss.
Cost of Doing Business
Recordkeeping isn’t the most gratifying part of being a doctor in private practice. But keeping meticulous records that show every penny you spent to keep your practice afloat will provide you with the biggest tax deduction.
Whether you’re running your own practice, have a partner, or are an independent contractor, you can deduct a host of expenses, including medical equipment, licensing and board examination fees, travel, and office equipment. You also can deduct the employer portion of payroll taxes you pay for staff.
If you’re an employee, you can deduct unreimbursed work expenses, but you must meet a certain threshold.
Every dollar you put into a tax-deferred retirement plan isn’t taxed until you take it out. That’s good news if you’re making the big bucks now, which puts you in a high tax bracket. When you take out money from a tax-deferred retirement account after you retire, you’ll likely be in a lower tax bracket and will pay fewer taxes on your nest egg.
If you contribute to a Roth IRA, you’ll have to pay taxes on contributions now, but the money will grow and can be distributed tax free when it’s time to retire.
Don’t miss out on the following deductions:
- Heath care: You can take the sting out of paying for your own health care insurance by deducting payments as a business expense or by contributing to a health savings account.
- Mortgage interest: You can save money by rolling your student and car loans as well as credit card debt into a bigger mortgage on your home. Not only are mortgage rates lower than most other types of debt, but mortgage interest currently is deductible, whereas the interest on other types of debt typically isn’t.
- Charity: Don’t forget to deduct on your itemized return any money or large items (e.g., car or boat) that you donate to charity. You also can deduct mileage traveling to and from a place where you donate your time.
We know that doing taxes isn’t high on your medical to-do list. That’s why we’re here. Give us a call, so we can help you make the most of the tax deductions that are rightfully yours.