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The 3 Largest Expenses Doctors, Physicians and Surgeons Can Deduct from Their Tax Returns

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The 3 Largest Expenses Doctors, Physicians and Surgeons Can Deduct from Their Tax Returns

Two of the most common mistakes I see many doctors make is either not deducting enough business expenses on their tax returns or deducting too many expenses and thus exposing themselves to the risks of a CRA audit. Let’s talk a bit about what expenses you should claim on your taxes and what expenses you should not claim.

The biggest source of deductions for many physicians would be their automobile expenses, as well as membership fees, professional fees, and potentially some overhead costs you might pay to the clinic that you work out of.

1. Automobile Expenses

To kick things off let’s take a look at automobile expenses. To determine how you can write off automobile expenses, first we need to determine the business use of your vehicle. You can only write off your vehicle in relation to the percentage that you actually use it for business.

Thus, it might be important for you to keep a log of all the business driving you do. This log will come into play when you’re working at multiple clinics, or perhaps going from one hospital to a conference, or something of that nature. This is all considered business use of your vehicle. Specific expenses that you could then include within your automobile expenses would be things like, gas, insurance, your monthly payments whether you’re leasing or financing a vehicle, maintenance costs, parking and 407.

Specific expenses that you could then include within your automobile expenses would be things like, gas, insurance, your monthly payments whether you’re leasing or financing a vehicle, maintenance costs, parking and 407.

2. Membership Fees

Another large business expense that you can write off would be all those membership fees that you pay on an annual basis. All those dues to the CPSO, the OMA, the CMPA, and whoever else wants to take your money on a yearly basis. That’s all eligible to be written off as a business expense. Legal and accounting fees are also considered professional fees and thus can be written off as a cost of doing business.

Legal and accounting fees are also considered professional fees and thus can be written off as a cost of doing business.

3. Overhead Fees

Another important item that can be written off are the overhead fees that you may pay to the clinic that you work out of.

4. Other Expenses

There’s a large list of other business expenses that can also be written off. That would include things like, insurance costs related to your practice, meals and entertainment costs when wining and dining whether it’s colleagues or patients, marketing costs for the business, cell phone and internet expenses, office supplies, travel costs related to a conference you may attend, rent and salaries for the office you maintain, and potentially even some home office expenses as well, should you qualify.

That would include things like, insurance costs related to your practice, meals and entertainment costs when wining and dining whether it’s colleagues or patients, marketing costs for the business, cell phone and internet expenses, office supplies, travel costs related to a conference you may attend, rent and salaries for the office you maintain, and potentially even some home office expenses as well, should you qualify.

Now with all of these write offs, it’s also important to note that there are certain items that you are specifically prohibited from deducting on your taxes such as golf. Yes, no matter how much networking you may do on the golf course or how lucrative it may be for your business, you cannot write off golf fees. Also, those shopping sprees for a new wardrobe are not deductible either.

The rule of thumb when making this determination is, if you incur an expense with the intention of making more money or helping you do your job better, then that can be deducted as a business expense unless it’s specifically prohibited by the CRA, such as golf.

Also, those shopping sprees for a new wardrobe are not deductible either. The rule of thumb when making this determination is, if you incur an expense with the intention of making more money or helping you do your job better, then that can be deducted as a business expense unless it’s specifically prohibited by the CRA, such as golf.

 

 

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