Tax Deductions for Doctors: What You Can Actually Claim

For many doctors, tax deductions continue to be a bit of a confusing grey area, with conflicting advice received from friends, family, colleagues, and the internet when it comes to what you can and can’t claim as a tax deduction.

In short, a tax deduction is an expense that you paid for yourself as part of your employment, which you can then “claim back” on your tax return to reduce the amount of tax you are required to pay on your income. This might either reduce your tax bill or increase your tax refund, depending on the amount of tax you have owing.

There are a few different types of tax deductions that cause confusion for many doctors:

1. Travel expenses

Travel expenses are the expenses that you incur by travelling between work sites (for example, two or more hospitals or clinics).

If you are a doctor who travels between work sites, you may be eligible to claim some or all of these travel expenses back, as long as you meet four conditions: the travel must be necessary; it must form part of your employment duties; your employer must require you to travel; and it must be undertaken in work hours.

What this means is that to be able to claim your travel expenses as a tax deduction, you must be travelling between workplaces as part of your role – not just travelling to and from work and home.

2. Meal and accommodation costs

Broadly speaking, if you travel for work, accommodation and meal costs may not be deductible, except for in certain circumstances. For example, both of these deductions may be allowable if your employer requires you to stay overnight away from home for a short period of time.

However, you also cannot generally claim lunches and other food that you purchase normally whilst you are at work (as these are considered to be private expenses – i.e. not tax deductible).

3. Work shoes and clothing

You may be able to claim work shoes and clothing if they are protective or specific to your occupation. For example, you may be able to claim a deduction for scrubs or non-slip shoes, or other personal protective equipment (PPE). However, you will not be able to claim your normal clothes or clothes you wear during consulting hours.

4. Laptops, phones, and other electronic devices

Generally speaking, you should be able to claim back a portion of the cost of laptops, phones, and other electronic devices in your tax return. However, you can only claim a percentage of this for business use.

There are a range of other deductions that you may also be eligible to claim. These may include:

• Work-related education expenses (e.g. textbooks, courses, photocopying and printing, student fees, materials, and study furniture)

• Equipment (e.g. medical supplies, equipment, and tools)

• Other work-related expenses (e.g. professional association membership fees, union fees, journal subscription fees, insurance fees, and medical registration fees)

• Accounting fees (e.g. the cost of using the services of an accountant or tax agent to prepare and lodge your tax return)

• Any charitable gifts or donations you’ve made

In short, you can claim a tax deduction for work related expenses that relate directly to your ability to earn your income, where you spent the money yourself and weren’t reimbursed by your employer. However, you will also need to have a receipt to back up your claim. For this, we recommend scanning your receipts in and storing them on your computer or in the cloud, rather than keeping paper receipts (which can fade over time). This will ensure that they remain clear and legible, and are easily accessible should you need them to back up your tax claim.

Working with an experienced accountant or tax professional for doctors like Medical Wealth Planning is by far the best way to check what you can and can’t claim back on tax, and to make sure you’re claiming deductions you’re entitled to. We have a proven track record of helping our clients to maximize their claimable deductions, and minimize their tax return. To find out more about our services and how we can help you with your next tax return, please book an appointment with our experienced team of taxation and accounting professionals.