Medical professionals are a highly taxed profession and so it is important to be aware of the deductions available for the 2022 Financial Year.
Annual Memberships and Subscriptions are all deductible where related to your income activities. These include AHPRA as well as AMA, RACGP, ASMOF just to name a few.
Any self-education and CPD costs can also be claimed as a deduction where they relate to your income. This can include course fees, conference fees, computer consumables. The purchase of technical equipment may be claimed as a deduction.
The cost of professional books and stationery as well as any meals and accommodation while studying away from home are also deductible costs.
For Motor Vehicle Expenses you may claim a deduction for travel under either the Logbook Method or Cents Per Kilometer method.
For the Logbook Method to determine the portion of deductible car expenses you should keep a look book for a period of 12 consecutive weeks to determine the business use percentage. This percentage is them applied to the vehicle expenses to determine the deductible portion.
The Cents per Km method can be calculated using the current set rate per kilometer, up to a maximum of 5,000 kilometers. This is a good option where you have not kept a look book and do not have tax invoices for every vehicle expense.
Travel and Accommodation Expenses are only deductible for travel required for work, business, or education-related reasons. These expenses may include Accommodation, Airfare Fares, trains, trams, buses, taxis etc.
Any travel by locum doctors that are required to travel to remote or rural locations will unlikely be deductible where the locum work location constitutes as their main place of workplace for that assignment.
Any Uniform or Personal Protective Equipment will be deductible. Clothing where it is occupation specific can be claimed such as Lab Coat and Scrubs. The laundry/dry cleaning related to these items of clothing will also be deductible.
Where you have a strict professional dress code you cannot claim a deduction for business apparel as it is not occupation specific.
Tax returns for doctors are typically prepared and filed by accountants and the fee you paid your accountant last year is tax deductible this year.
Where you have Phone and Internet expenses these can be claimed if they were used for work or commercial activities. So you should keep a diary record of your usage in order to determine the appropriate business usage percentage to apply. The ATO requires you to retain records for a four-week sample period.
Other Deductible Expenses you should consider include certain parking fees, road tolls, specialist watches, insurance, gifts and donations etc.
To ensure you maximise your 2022 Tax Deductions we recommend discussing this further with a Medical Accountant.