Can Doctors Claim a Tax Deduction on Holidays?

As a doctor, it is likely that you will have to travel from time to time for work – whether it is to visit your patients, attend a conference, or undertake training to upskill and expand your knowledge.

Like a lot of doctors, you might want to turn a work trip into a little bit of a holiday. Whilst there is no harm in doing this, it is important that you understand which expenses you can and can’t claim back as a tax deduction.

Many doctors and other business travellers make the mistake of trying to claim for the expense of their entire trip. However, for you to be able to claim an expense back as a tax deduction, it must be directly connected to the duties that you carry out as part of your employment. Although you should be able to claim a tax deduction for some of the expenses you incurred whilst you were travelling for work, you will not be able to do this for expenses you incurred as part of your personal or private travel.

Here are some of the main expenses you might be wondering about claiming back from your business travel:

• Flights: As a doctor, you might need to book flights to travel for business or training. If the main reason for your travel is business, and the private component to the travel is incidental to this (e.g. networking event during the conference), you can claim the full cost of the airfare as tax deduction. However, for a dual purpose trip involving work related events and a private holiday, you can only claim a deduction for the work related portion of the airfare.

• Accommodation: You may also be able to claim a tax deduction for the cost of your accommodation, as long as you are travelling for business purposes. You can only claim a deduction for the portion of your accommodation whilst you are on the work related trip – not any additional nights or accommodation you may pay for as part of your holiday.

• Meals: If you are required to stay overnight away from home whilst working, you may be able to claim some of your meals as a deduction. Meals that you consume in your downtime or as part of your holiday also cannot be claimed.

• Transport: If you travel for work, you may be able to claim a deduction for the cost of petrol, car hire, bus or train tickets, or taxi fares. You will only be able to claim for transport that is directly connected to your employment duties or business activities (so not any transport that you might take whilst you are on a holiday).

• Travel Companions: You may wish to travel with a spouse, partner, or other family members. However, you will not be able to claim a tax deduction for their travel expenses unless they are directly involved in the business purpose of the trip. You cannot claim visas, passports, and travel insurance policies as tax deduction.

Note that if an employer pays travel allowances and this is included in the employee’s payslip/income statement, the employee is able to claim back travel costs as a tax deduction, up to the full travel allowance received where it is within the ATO thresholds for overnight trips.

Whilst this blog post provides a general guide, it’s important that you consult with a professional financial advisor who is familiar with the tax deductions that doctors can claim, to ensure you are claiming all the deductions you are entitled to.

To find out more about what you can and can’t claim back on your tax when it comes to business travel, book an appointment with Medical Wealth Management today.