Free Tool — Practice Tax Deductions
Which tax deductions is your practice missing?
Every physician knows about rent, supplies, and payroll. The ones that actually move the needle are specialty-specific — and most practice owners have never seen a checklist built around how their practice actually operates. Get yours in two minutes.
Practice deductions, answered
The standard every deduction has to meet, the ones practices most often miss, and what documentation actually has to exist.
What can a healthcare practice deduct?
The governing standard is that an expense be ordinary and necessary for the business — common and accepted in the field, and helpful and appropriate for the practice. That covers the obvious categories (staff, occupancy, supplies, insurance, equipment, professional fees) and a long tail that gets missed because no one classified it as a business cost at the time it was paid. The standard is broad; the failures are usually about substantiation, not eligibility.
What deductions do practices most often miss?
Continuing education and the travel attached to it, licensing and credentialing fees, professional dues and board certifications, malpractice tail coverage, business use of a personal vehicle, and out-of-pocket costs the owner paid personally and never submitted for reimbursement. That last category is the largest in most practices, and an accountable plan is what converts those into deductible reimbursements rather than lost personal spending.
Can a physician with a clinic claim a home office?
Sometimes, but the clinic makes it harder. The space must be used regularly and exclusively for business, and it generally must be the principal place of business — which a clinic ordinarily is. The exception that most often applies is where substantial administrative or management work is performed at home and there is no other fixed location where that work is done. It is fact-dependent enough that it is worth confirming rather than assuming either way.
Is a vehicle deductible?
Only the business-use portion, and commuting between home and a regular workplace is not business use — that is the distinction that disqualifies most of the mileage owners expect to claim. Travel between practice locations, to a hospital for rounds, or to a business errand generally does qualify. The deduction requires records showing business mileage against total mileage, kept as the driving happens rather than reconstructed later.
What documentation does a deduction actually require?
Enough to establish the amount, the date, the business purpose, and for travel and vehicle use, the specific business relationship. Contemporaneous records — kept at or near the time — carry substantially more weight than a summary assembled afterward, and certain categories are held to stricter substantiation than ordinary expenses. A deduction that is legitimate but undocumented frequently does not survive examination, which makes recordkeeping the cheapest tax work available.