As you prepare to move into the next stage of your medical career — like starting your own practice or joining a clinic — there’s one thing you need to know that likely wasn’t covered in school: money. Specifically, business expense deductions.
If there’s one thing you don’t want in your first few years of your career, it’s being hit with an unexpected, hefty tax bill. Proactive planning can help mitigate this. The key? Knowing what you can claim, staying organized, and aligning your purchases with your business.
What can I deduct?
It’s important to understand there’s a broad range of expenses that can be deducted to reduce your taxable income. These include:
- Meals and entertainment: Just make sure you note who you were with and the business topics you discussed.
- Professional dues, licenses, and malpractice insurance: All required to do your job. This could include subscriptions to medical journals and associations.
- Office expenses and supplies: Stationary, equipment, and even monthly mobile phone costs count.
- Professional development: Costs for courses, conference, and related travel (like airfare, vehicle rental, Ubers, meals, and accommodations).
- Equipment for work: A new laptop, mobile phone, office furniture, or medical tools you purchased for work.
- Legal and accounting fees: Whether it’s help with contracts, taxes, or other business needs, these costs are deductible too.
Here’s what doesn’t count:
- Personal expenses like commuting costs, gym memberships, or meals not tied to business expenses.
- Items without proper documentation — so keep your receipts and track everything.
How can I stay on top of it?
Listen, we know managing your finances is not as exciting as working with your patients. But tracking your income and expenses is the first step to taking control of your financial health and staying organized.
Here are some tips to keeping things in order:
- Keep detailed records for every purchase
- Use an expense tracker to track money coming in, as well as the money going out
- Separate your business and personal purchases to avoid confusion (think: separate credit cards or accounts)
Set yourself up for success
Your career is only going to grow from here on out, so it’s worth setting up solid financial habits now. If you’re not sure where to start, MNP can help. Every dollar counts as you build your medical career. Let’s make sure you’re capturing all the deductions you’re entitled to.
Want to learn more? Reach out to your local advisor today.