Tax time is a headache for many doctors, let alone medical practice owners. Even worse when you are a doctor and a medical practice owner!
[Before you read on … Nitschke Nancarrow has recently launched DocWealth, a wealth, accounting and financial planning firm exclusively for doctors and medical practice owners. Get free resources, podcasts and insights here.]
Not only are you paying a lot of tax, you need to stay compliant to avoid audits and issues with the ATO while still keeping as much cash flow in your medical practice as possible.
So how do you keep on top of your tax as a medical practice owner?
‘Doing your tax’ isn’t just a one-time of the year thing. You should be working throughout the year to stay compliant and prepared so that tax time will be a breeze.
You should be working with an accountant that specialises in the medical industry, who will understand your circumstances and requirements. Keep in regular communication with your accounting team throughout the year to ensure you are on top of everything. Mark due dates in your calendar so that you aren’t caught off-guard by any deadlines. Keep documentation safely stored somewhere you can reference with ease. Maintain separate files for personal and business-related accounting documentation.
Know the rules specific to your business structure
A sole trader has different tax responsibilities than a trust, partnership or company. So you need to know exactly what your tax requirements are based upon your structure. Each kind of structure has unique benefits. For example, the sole trader filing process is simple, but a company structure may offer you more flexibility and opportunity.
Know what deductions you qualify for
The expenses you can claim for deduction may depend on your practice, but some common areas include:
– Licensing fees or other professional dues or membership fees
– Malpractice and liability insurance
– Medical journal subscriptions
– Medical and technical equipment
– The cost of managing your accounting
Being familiar with what expenses you can claim will likely see a great uplift in your return.
Access first class bookkeeping
You won’t be hit with any surprises when your books are up-to-date and you have a skilled accountant/bookkeeper analysing every detail. To automate things and give your more power to manage your business, use accounting software like Xero. You can also explore other practice management software that may integrate bookkeeping functionality into their offering.
Get expert advice
The most important tax tip for medical practice owners is to work with a medical accountant who understands your needs. Running a medical practice is unique, and a financial expert who specialises in your field will help you avoid common traps and access opportunities.
Contact Nitschke Nancarrow, experts in all aspects of medical practice ownership – accounting, financial planning, investment and business. We operate in Adelaide, Sydney, Melbourne and throughout Australia. Managing partner Kym Nitschke is available for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: medical practice management, Tax