Are you a doctor or medical professional working in Australia? You’re probably no stranger to the fact that the more you earn, the harder you’re taxed. As it turns out, you could actually save yourself a lot of money the next time you submit your income tax return.
[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.]
Tax deductions for doctors that are commonly overlooked:
1. Continuing Education Costs
Medical experts are required to invest in continuing education throughout their careers and it usually amounts to significant tax deductions. Many medical professionals dread the cost of educational courses and materials but they understand such are necessary to maintain their expertise and required licences.
Fortunately, you can also score a tax break by reporting expenses associated with:
– Clinical materials
– Photocopy costs
– Student service fees
– Most costs associated with attending conferences
– Travel costs
Doctors and medical experts are often members of multiple associations and subscribe to journals and other publications associated with their field. Tax deductions can include:
– Membership fees
– Journal subscription fees
– Medical registration fees
3. Work From Home? Look For These Tax Deductions
You may use the same electricity and Internet, but when your home utilities also support work-related needs, that portion can be claimed on your taxes.Work-related expenses can include heating and cooling systems, lighting, a professional at-home library, and even depreciation of office equipment.
4. Accounting Expenses
As you’re well aware, managing your tax affairs comes at a cost. Don’t forget to report the expense for consulting an accountant and for actually lodging your tax return.
Almost anyone who works in a clinical medical setting has to have some kind of specialised outfit. Safe footwear and protective items, as well as the cost of cleaning and maintaining professional wear are all expenses you can claim.
6. Travel Expenses And Vehicle Costs
If your medical occupation has you on the road, especially for remote or rural work or special functions, then you may be able to claim some costs as a tax deduction.Don’t overlook expenses such as airfares, lodging accommodation, meals and conference materials. In all likelihood, you use your personal vehicle for some work-related travel. If that’s the case, keep careful records or use with a logbook so that you’ll have evidence of the work-related trips.
All doctors need to purchase professional indemnity insurance. Thankfully, this cost is one that you can report as a tax deduction.
Other work-related insurance expense you may claim include:
– Tax audit cover
– Income protection insurance
– Cover for inquiries
8. Donations And Gifts
With some exceptions, donations of over $2 in value can be tax-deductible. If you make a contribution to an eligible charity, then records of such can save you a lot on your next tax return.
9. Personal Investments
Did you purchase an investment property over the past year with the help of a loan? That loan cost can also be a deduction.
10. Items You Need For Work
The costs related to “doing what you do” may seem obvious, don’t forget to keep careful records of how much you spend.
Not all of the following items apply to work, exclusively. But if you can calculate the percentage of use dedicated to your practice, then that expense can also be claimed as a tax deduction.
These are some of the items you can report lodge as a tax deduction:
– Medical supplies and equipment, medicine and other materials
– Bag or briefcase
– Phone and Internet costs (in proportion with work-related use)
– Expenses for attending conferences
– Safety equipment
Not sure where to find possible tax deductions? That’s okay, it’s easy to overlook simple expenses you could claim.
We recommend keeping detailed records of all your costs and purchases over the course of the year. Come tax season, it’ll be easier to review your receipts and invoices to spot those deductions.
Nitschke Nancarrow specialise in accounting and financial planning services for health and medical professionals.