The 3 Largest Expenses Doctors, Physicians and Surgeons Can Deduct from a Professional Corporation

(upbeat music) – Two of the most common
mistakes I see many doctors make is either not deducting
enough business expenses on their tax returns or
deducting too many expenses and thus exposing themselves
to the risks of a CRA audit. My name is Junaid Usmani and I’m a Partner at SRJ Chartered Accountants. In this video, I’m gonna
talk to you a bit about what expenses you should
claim on your taxes and what expenses you should not claim. The biggest source of
deductions for many physicians would be their automobile expenses, as well as membership
fees, professional fees, and potentially some overhead costs you might pay to the clinic
that you work out of. To kick things off let’s take
a look at automobile expenses. To determine how you can
write off automobile expenses, first we need to determine the
business use of your vehicle. You can only write off
your vehicle in relation to the percentage that you
actually use it for business. Thus it might be important
for you to keep a log of all the business driving you do. This log will come into
play when you’re working at multiple clinics, or perhaps
going from one hospital to a conference, or
something of that nature. This is all considered
business use of your vehicle. Specific expenses that you
could then include within your automobile expenses
would be things like, gas, insurance, your
monthly payments whether you’re leasing or financing a vehicle, maintenance costs, parking and 407. Another large business
expense that you can write off would be all
those membership fees that you pay on an annual basis. All those dues to the
CPSO, the OMA, the CMPA, and whoever else wants to take
your money on a yearly basis. That’s all eligible to be written
off as a business expense. Legal and accounting
fees are also considered professional fees and
thus can be written off as a cost of doing business. Another important item
that can be written off are the overhead fees that you may pay to the clinic that you work out of. There’s a large list of
other business expenses that can also be written off, and
that would include things like, insurance costs related to your practice, meals and entertainment
costs when wining and dining whether it’s colleagues or patients, marketing costs for the business, cell phone and internet
expenses, office supplies, travel costs related to a
conference you may attend, rent and salaries for
the office you maintain, and potentially even some
home office expenses as well, should you qualify. Now with all of these write
offs, it’s also important to note that there are
certain items that you are specifically prohibited from deducting on your taxes such as golf. Yes, no matter how much networking you may do on the golf course or how lucrative it may
be for your business, you cannot write off golf fees. Also, those shopping
sprees for a new wardrobe are not deductible either. The rule of thumb when
making this determination is, if you incur an expense
with the intention of making more money or helping
you do your job better, then that can be deducted
as a business expense unless it’s specifically prohibited by the CRA, such as golf. Check out the link below
for a detailed checklist of what expenses you
can and cannot write off for business purposes. Or if you still have questions feel free to schedule a call
with one of our partners.

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