MDTAXES is a Valuable Resource to Healthcare Professionals

January 18, 2005 - The MDTAXES Network is an affiliation of CPAs throughout the country that specializes in the tax planning and preparation for young healthcare professionals. At this time of year, many young healthcare professionals are pulling long shifts at the hospital, clinic, or in private care; and are not aware of all the expenses they can deduct on their taxes - and those they cannot.

Andrew Schwartz, CPA and founder of the MDTAXES Network, has provided the following list of many of the professional expenses commonly incurred, and deducted, by young healthcare professionals. "Remember," advises Schwartz, "to be deductible, any expense must be both 'ordinary' and 'necessary' in connection with your profession."

Automobile expenses
-Deductible: The portion of automobile expenses attributable to driving between two different workplaces, or between your principal residence and a temporary job site.
-Non-Deductible: The portion of automobile expenses incurred while commuting between your principal residence and a regular place of business.

Beepers and pagers
-Deductible: The rental fees paid by you for beepers and pagers used in connection with your employment
-Non-Deductible: Any costs associated with the personal use of these items.

Cellular phones
-Deductible: The business portion of the cost of the cellular phone can be depreciation. Plus, you can deduct the business use portion of the monthly cellular phone bills.
-Non-Deductible: Any portion of the cost of the cellular phone and the monthly cellular phone bills relating to personal use.

Computer purchases
-Deductible: Depreciation on the business use percent of any computer or peripheral purchased (1) as a requirement of your employment and (2) for the convenience of your employer.
-Non-Deductible: Any computer and peripheral not specifically purchased as a requirement of employment or for the benefit of your employer.

Education, examinations and licenses
-Deductible: Expenses incurred that are required as part of your employment and maintain or improve your skills in your current profession.
-Non-Deductible: Expenses incurred that prepare or qualify you for a new trade or business.

Insurance
-Deductible: Malpractice insurance and insurance on business assets
-Non-Deductible: Health, life and disability insurance. Health insurance is deductible as an "adjustment to income" if you have net self-employment income.

Interest on school loans
-Deductible: Up to $2,500 of student loan interest paid during the year, subject to income limitations.
-Non-Deductible: Interest on school loans in excess of $2,500 per year.

Professional dues, journals and subscriptions
-Deductible: Fees paid to join professional organizations or to subscribe to their journals
-Non-Deductible: Dues paid to business, social or athletic clubs.

Temporary job assignments
-Deductible: The travel, lodging, and 50% of the cost of the meals incurred during a job rotation outside the general vicinity of where you live. The rotation must be for a specific period of less than one year, and you must intent to return to the city that you were living in prior to the rotation.
-Non-Deductible: Any expense associated with a job rotation outside the general vicinity of where you live that will last for more than a year, or for an unspecified length of time.

Supplies
-Deductible: Supplies, such as slides for presentations, that are required in connection with your employment.
-Non-Deductible: Supplies that don't fall within the definition of "ordinary" and "necessary" for a professional in your field.

Uniforms and cleaning
-Deductible: The cost of purchasing and cleaning clothing, such as lab coats and scrubs, required by your employer that isn't considered "everyday street clothing".
-Non-Deductible: Items such as suits, shirts, shoes, ties and wristwatches because they fit the description of "everyday street clothing"

Other valuable tax information specific to healthcare professionals can be found on www.mdtaxes.com. Contacting one of the MDTAXES CPAs will help ensure that you minimize the taxes you pay on your healthcare professional and self-employed earnings.

MDTAXES is a Valuable Resource to Healthcare Professionals

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MDTAXES is a Valuable Resource to Healthcare Professionals

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