Tax Deductions for Doctors
Whether you're a private practice physician, locum tenens doctor, or medical consultant, understanding your tax deductions can significantly reduce your tax burden.
Common Deductions for Doctors
Continuing Medical Education (CME)
CME courses, medical conferences, board recertification, and educational materials required to maintain licensure.
Medical Licenses and Board Certifications
State medical license fees, DEA registration, board certification and recertification fees.
Professional Liability Insurance
Malpractice insurance premiums for physicians. Costs vary significantly by specialty and location.
Professional Society Memberships
AMA, specialty societies (ACS, AAP, ACOG, etc.), state medical associations, and hospital medical staff dues.
Medical Equipment and Instruments
Personal medical instruments, diagnostic equipment, and specialized tools you purchase for practice.
Medical Reference Materials
Medical journals, UpToDate subscription, textbooks, and clinical reference subscriptions.
Travel for Locum Tenens
Transportation, lodging, and meals for locum tenens assignments or traveling between practice locations.
Home Office (Telemedicine)
Dedicated space for telemedicine consultations, including equipment, internet, and portion of home expenses.
Expenses to Track
Employment Status and Tax Implications
Physician tax deductions depend on your employment structure:
Private Practice (Self-Employed)
- File Schedule C for practice income and expenses
- Deduct all ordinary and necessary business expenses
- Pay self-employment tax on net practice income
- Maximum flexibility for deductions
W-2 Employee
- Most unreimbursed expenses NOT deductible federally (2018-2025)
- Some states still allow employee expense deductions
- Accountable reimbursement plans through employer are tax-free
- 1099 side income (consulting, expert witness) allows Schedule C deductions
Locum Tenens
- Typically 1099 independent contractor status
- Full deductibility of travel, housing, and business expenses
- Per diem rates for meals when away from tax home
- Vehicle or mileage deduction for travel between assignments
Continuing Medical Education
CME requirements vary by state and specialty. Deductible CME expenses include:
- Course registration: Online and in-person CME courses
- Conference attendance: Medical conferences with CME credits
- Travel expenses: Flights, hotels, and meals (50%) for educational travel
- Home study materials: Books, journals, and online subscriptions
Documentation tip: Save CME certificates alongside payment receipts to substantiate both the educational purpose and expense amount.
Malpractice Insurance Considerations
Malpractice insurance varies dramatically by specialty:
- Low-risk specialties: Psychiatry, family medicine ($5,000-15,000/year)
- Medium-risk: Internal medicine, pediatrics ($15,000-30,000/year)
- High-risk: Surgery, OB/GYN ($50,000-200,000+/year)
If you pay your own malpractice insurance (private practice or locum tenens), it's fully deductible. If employer-provided, it's not a deduction but also not taxable income to you.
Medical Society Memberships
Professional memberships serve both networking and educational purposes:
- American Medical Association (AMA): National advocacy and resources
- Specialty societies: ACS, AAP, ACOG, ACP, etc.
- State medical associations: State-level advocacy and CME
- County medical societies: Local networking and referrals
- Hospital medical staff dues: If required for privileges
All professional dues are deductible for self-employed physicians.
Telemedicine and Home Office
The growth of telemedicine has created new deduction opportunities:
Home Office Requirements:
- Dedicated space used exclusively for patient consultations
- Regular and consistent use for telemedicine practice
- Meets HIPAA privacy and security requirements
Deductible Expenses:
- Proportional home expenses (rent, utilities, internet)
- Telemedicine equipment (webcam, microphone, lighting)
- HIPAA-compliant software subscriptions
- Electronic health record (EHR) system costs
Physician Side Income
Many physicians have 1099 income beyond their primary employment:
- Expert witness work: Legal consulting on medical cases
- Medical consulting: Healthcare company advisory roles
- Speaking engagements: Conference presentations and lectures
- Medical writing: Journal articles, textbook contributions
- Locum tenens: Temporary practice assignments
This 1099 income is reported on Schedule C, allowing deduction of related expenses even if your primary position is W-2.
Retirement Contributions
Maximize tax-advantaged retirement savings:
- Solo 401(k): Up to $69,000 for 2025 (if self-employed)
- SEP-IRA: Up to 25% of net self-employment income
- Defined benefit plan: Potentially higher limits for high earners
- Backdoor Roth: Available regardless of income level
Consult with a financial advisor familiar with physician finances for optimal retirement planning.
Track CME credits and expenses together - you need documentation for both licensing and tax purposes.
If you're a W-2 employee with a telemedicine side practice, you may deduct home office expenses on Schedule C.
Locum tenens physicians should keep detailed travel logs and per diem documentation.
Medical conference travel is deductible when the primary purpose is education - keep session attendance records.
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