Medical graduates are educated and trained to deal with many complex situations, but that doesn’t include preparing your tax returns as a working professional.
Under the Australian tax system, the more you earn, the more you are taxed. For this reason, it is important to be aware of the legal deductions that can increase your annual refund or reduce the tax you need to pay.
As you are gathering your paperwork together for your annual return, it is worth keeping the following list of potential deductions in mind:
Medical doctors are often members of multiple work–related associations and colleges or subscribe to professional journals and other publications. Fees for these memberships, colleges, medical registrations, and organisations like the AMA are all tax deductible.
All doctors need professional indemnity insurance, which is tax deductible. Other insurances that could be deductible would be income protection, tax audit cover, and any general insurance that specifically covers medical equipment.
Motor Vehicle/Travel Costs
Travel to and from your place of work IS NOT tax deductible. But outside this, a lot of medical professionals need to travel for patient visits, external medical clinics, district medical meetings, or training sessions and conferences. These trips are all potentially claimable. Keep note of the kilometres you travel, or your airfares, plus any associated costs such as accommodation and meals if you are away overnight.
Continuing Medical Education
This can be one of the most significant areas of expense for a training doctor. CME is an essential and ongoing part of being a medical professional and the fees, clinical equipment/materials, printing and stationery costs, plus travel to exams and practice exams are all potentially claimable expenses.
Work From Home
Keep a tally of the hours you spend working and studying from your home. You should be at least able to claim a set rate-per-hour allowance for the use of your home for work-related purposes.
General Items Needed For Work
Desks, software, computers, calculators, safety equipment, medical bags, medical supplies/equipment and phone/internet costs can all be required directly for your work or your related study. These could be fully or partially deductible. Did you purchase anything with the $20, 000 Instant Asset Write-Off?
General business/work attire IS NOT a claimable expense. But specialist clothing, theatre shoes, registered/logo uniforms and anything protective in nature is potentially claimable – as is the laundry/dry cleaning of these items.
Donations and Gifts
Any donations to a registered charity over $2 are tax deductible. Make sure you keep the receipts for any of these deductions. Also, it is important to realise that buying charity raffle tickets or purchasing items such as pins, scarves or stuffed toys IS NOT tax deductible – only cash donations.
If you purchased an investment property, or any other investments, and used borrowed money to do so, then the interest on that loan and many other related costs may be tax deductible. This might also include a situation where a property was originally your home, but now is rented because you have had to relocate for work.
Professional fees associated with preparing your tax return or providing you with tax related advice are tax deductible and should be included in your return.
Affinitas Accounting has been preparing tax returns for medical professionals for more than 25 years. For help with your tax return preparation, or for related financial advice, call 07 3359 5244, email or reach us on Messenger below.