Tax Guidance and Tips for Physicians
Few people look forward to tax season, especially if their returns will be less than straightforward. As a physician, tax season can be especially stressful if you’re unsure how much money you owe.
While doing your taxes can be anxiety inducing, there are ways to lessen the stress. Continue reading for some tips, tricks, and tax guidance to help with refunds and payments.
What’s the Best Way to File My Taxes as a Physician?
The first question many physicians have is how to file their taxes. Generally, the two main options are filing yourself or hiring an accountant. Both choices have pros and cons.
When you file yourself, you may save money because you won’t have to pay an accountant for their services. On the other hand, a trusted tax professional can assist you in getting more physician tax deductions and paying less overall. Plus, you won’t have to take time after a busy shift to sift through documents.
Also, keep in mind that while many online tax services are free, this is only if you go with the most basic option. If you have more than one source of income, multiple saving funds, or anything more complicated, you’ll likely have to pay extra to file through a tax filing software. Since you’ll likely be paying either way, turning to a trusted professional is often the easiest and most beneficial way to handle taxes.
Understanding Physician Tax Deductions
Another significant component of filing taxes is deductions. Usually, online tax services will find some of these when you fill out your information. If you go with an accountant, they will also help you determine which tax deductions apply to your situation. Physician-focused tax professionals may be able to identify more deduction opportunities than online services.
This list of notable physician tax deductions gives a few ideas of how to save money when filing:
- Professional organizations and dues: If you belong to any physician organizations or associations, you can likely deduct the yearly fees.
- Travel fees: If you travel for work, you may get some deductions for these expenses.
- Savings for retirement: Paying for an IRA or 401K? The money you invest each year can also be deducted.
- Your mortgage: For physicians who own a home or other piece of real estate, the mortgage is also a tax write-off.
- Medical equipment: If you own or co-own your office, you can deduct the necessary medical equipment from your taxes. However, this doesn’t apply if you are hired by a company, hospital, or management group.
- Donations to charities: Do you donate to charitable causes? Whether these are related to your career or totally separate, you can count any donations as tax write-offs.
While these aren’t the only tax deductions for physicians, they are some of the most common. If you have specific questions about your financial situation and potential write-offs, it’s best to speak to a trained tax professional or check out government resources.
How to Track Deductions Throughout the Year
While it’s possible to track all your deductions at once when you file your taxes, the process is much easier if you keep track of everything throughout the year. If you own your own practice, it’s even more critical to maintain excellent financial records.
Whether you’re an employee or medical practice owner, you should hold onto and track:
- Receipts for business travel
- Information on medical expenses and insurance throughout the year
- Tax and financial information like statements for your savings accounts, retirement plans, etc.
For more information on what to track for your taxes and deductions, contact a tax planning expert.
How Changes to Tax Law May Impact Your Refund
In the last few years, several tax credits, such as the child tax credit, child and dependent care credit, earned-income tax credit, and charitable deductions, have caused the average tax refund for many households to increase. This year, many of these benefits, which increased to counterbalance the effects of the pandemic, are expiring and reverting back to their pre-pandemic state. For many households—physicians included—this may result in a smaller overall refund. This change is especially impactful now, as it’s occurring during one of the highest periods of inflation in the last few decades.
The Value of Professional Physician Tax Solutions
When you’re a physician, you want a tax professional or accountant who works specifically with healthcare professionals. While most experienced accountants can assist you in filing your taxes correctly, a high-quality, physician-focused tax preparation service can provide better tax guidance and maximize your deductions.
Income taxes and tax laws are complex, and the more investments, revenue sources, and savings you have, the more complicated things become. Seeking tax guidance from a professional allows you to focus on your specialty without worrying about taxes during your downtime.
With Physician’s Resource Services as your tax planning and preparation partner, your taxes are filed correctly the first time and comply with IRS policies.
Physician’s Resource Services Simplifies Tax Planning for Doctors
Do you still have questions about tax refunds and payments for physicians? If so, the financial professionals at Physician’s Resource Services can provide experienced tax guidance. We understand that healthcare providers are there to assist their communities with essential services and may not have the time or expertise to focus on taxes.
Physician’s Resource Services provides a wide range of financial and insurance services to assist healthcare providers of all kinds. From tax preparation to insurance help, we want to protect your financial future. Contact us today to learn more and see how we can assist you.
This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.
Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.
Share This Post
“You dedicate your life to helping patients with their physical health; Let us help you with your financial health.”
This site may contain links to articles or other information that may be on a third-party website. Advisory Services Network, LLC is not responsible for and does not control, adopt, or endorse any content contained on any third-party website.
Advisory services offered through PRS Investment Advisors, a Member of Advisory Services Network, LLC. Tax services and insurance products offered through Physician’s Resource Services. Advisory Services Network, LLC and Physician’s Resource Services are not affiliated.