Tax Deductions For Medical Professionals

Medical professionals are responsible for delivering a range of vital services to the general public. They include GPs, pharmacists, orthodontists, psychiatrists and many more. Usually, there are many tax deductions for Medical professionals that can be claimed on their tax returns. Often, they outlay large amounts of their own money on work-related expenses, courses and equipment however with potential life or death situations at hand, it can be hard to keep track throughout the year.

At Etax, we’re here to help you and ensure you get the most out of your next tax return! Read our tax deductions for medical professionals guide to make sure you get everything you deserve back at tax time!

Tax deductions for medical professionals: most common items

Each individual tax return is different, with varying roles and responsibilities, however there are a range of common deductions for medical professionals.

Work-related travel and car expenses

Firstly, do you travel for your profession? Whether it’s home visits or between clinics, make sure you claim your associated travel expenses. This can include public and commercial transport or the cost of using your own vehicle for work-related travel.

Keep in mind, there are a few exclusions to observe and processes you will need to follow to claim these expenses.

Usually, you can’t include travel from home to work (or vice versa). And, to boost your claim if you’re using your own car to drive a significant distance (over 5,000km per year), you should document the number of kilometres in a logbook over a period of at least 12 weeks, plus keep all car related receipts (e.g fuel, services, tires etc).

Other Work-related travel tax deductions for medical professionals can include:

• Bus fares
• Train fares
• Taxi fares
• Hire car expenses
• Plane flights
• Private car use (read our blog on car expenses for full details on how and what to claim)
• Bridge and road tolls

Medical professional tax deductions Example #1: A General Practitioner (GP)

Megan is a doctor and works in a clinic but also carries out appointments in the homes of some of her patients. In order to make these in-home visits, Megan uses her own vehicle and keeps a vehicle log book of all of her car use (personal and private) over a 12-week period.

By keeping good tax records, Megan works out that 67% of her car use is work related. Therefore, Megan can claim 67% of the costs associated with her car during the year. This includes items such as fuel, registration, insurance, lease payments and more.

For more information on log book keeping, read our post here.

Work-related tools and medical equipment

Have you bought tools or equipment, like a stethoscope, scales or briefcase for your job? How about that diary you bought for jotting down your appointments? Don’t miss out on these valuable tax deductions.

Tax-deductible work-related tools and equipment for medical professionals include:

• Purchase or leasing costs of laptops and tablets
• Computer accessories such as USBs, cables and headphones
• Stationery, including diaries and notebooks
• Software and stock license fees
• Work-related phone expenses
• Protective items
• Medical equipment (eg stethoscope, scales)
• Repair costs for work-related tools and equipment
• Insurance premiums for work equipment

Medical Professional Tax Deductions Example #2: A Psychiatrist

Adam is a psychiatrist who often carries his work laptop and patient documents between his office and his home. He purchases a laptop bag suitable for carrying both which he only uses at work.

There is a clear connection between the bag and Adam’s work activities. Therefore, Adam is likely to be able to claim the cost of the laptop bag as a tax deduction.

Home office running expenses: A commonly missed medical professional tax deduction

Are your required to fulfil some of your employment duties at home, and incur an additional expense to do so? If you have kept an adequate record outlining the hours you have worked from home, you could claim working from home expenses.

From 2023, you can claim the additional running expenses of your home office in two ways:

• The amount of actual running expenses incurred by recording an established pattern of use (Actual Cost Method)
• Or, at a rate of 67 cents per hour (Revised Fixed Rate Method).

Be careful – don’t claim home office costs if, for example, you just check your emails in the evening out of habit. This tax deduction is for people who are required to work from home sometimes. If you’re not honest about this one, it can get very uncomfortable with the ATO.

Medical Professional Tax Deductions Example #3: Orthodontist

Simon works for a small dental practice and often reviews client flies and completes administrative tasks at home. He uses his work laptop in a room of his house which is a dedicated home office.

So what can Simon claim?

Simon can claim the apportioned actual running costs, such as electricity, by calculating how big his office is (as a percentage of his total house) or at a standard rate of 67 cents an hour.

Like most people, Simon uses the standard rate and calculates that he works at home for 8 hours a week for 48 weeks of the year. To work out his claim he does the following calculation: $0.67 x 8 x 48 = $257.28.

Therefore, Simon can claim $257.28 on his tax return!

Self-education tax deductions for medical professionals

As a medical professional, chances are you have some specialised knowledge within your field of work. But, did you know that you can usually claim the cost of keeping your knowledge up to date on your tax return?

Whether it be attending conferences or facilitated learning, professional development is essential to stay ahead in your career.

Common Medical professional self-education expenses include:

• The fees for short courses or university courses directly related to your work.
• Course related expenses including:
  • Internet
  • Phone calls
  • Travel costs
  • Accommodation and meals (if the course requires an overnight stay)
  • Tools and equipment required to undertake the course
  • Books and training manuals

If you plan to claim self-education expenses on your tax return, the training must be directly related to your current job. (For example, you can’t claim a surgeon training course if you are not already a surgeon!).

To learn more, check out this post for much more information on claiming self-education expenses.

Other common tax deductions for medical professionals

Other expenses you can claim a deduction for include:

• Tax agent fees. If you paid an accountant last year, don’t forget to claim those fees on your return this year.
• Professional indemnity insurance
• Medical journal subscriptions and publications
• AMA or other medical professional association membership fees
• Income protection insurance

If you’ve been reimbursed, don’t claim it.

Employers often reimburse staff for costs. And, if this is the case for you, you can’t claim the expense as a tax deduction. Remember, legitimate ATO tax deductions for medical professionals only include expenses you’ve paid for yourself where you haven’t received a reimbursement. The ATO is remarkably good at spotting people doing the wrong thing and you could be penalised later.