Top 10 tax deducation tips for medical professionals

·6-min read
Here's how medical professionals can make the most of their tax return. Source: Getty/Yahoo Finance
Here's how medical professionals can make the most of their tax return. Source: Getty/Yahoo Finance

Diagnosing health issues in your patients is an important part of your daily work life. But how often do you stop and assess the relative 'health' of your personal finances?

As a doctor, specialist or other type of medical professional, such as a physiotherapist or radiologist, working in a hospital or clinic, you know the importance of experience when it comes to assessing important matters, whether it's a broken leg or a set of blood test results. It's no different for your taxes.

Getting expert advice from a tax accountant is the smartest thing you can do at the end of each financial year. Not only will you save a lot of time, you'll also be putting your finances into the hands of someone who knows the tax system inside and out – which means they will make sure you get every deduction you deserve.

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To complete your return as a medical professional employed by a company, you'll first need an income statement from your employer (previously called a "payment summary" or "group certificate"). This is a summary that outlines all of your salary, wages, allowances and bonuses for the financial year.

You won't need to have an actual copy of this statement, as it should be lodged by your employer directly to the ATO. Once this has been lodged, we can download the information for you and then help you work out your deductions.

What do I need to know about claiming deductions?

As you know, you're entitled to claim deductions on any money spent during the financial year on products or services that directly related to earning your income. But there are two things you need to remember:

First, you need to have spent the money yourself (it can't have been reimbursed by your employer).

Secondly, you need to keep a record of the expense such as a receipt or invoice.

10 expenses you CAN claim as deductions

There is a wide range of tax deductions you can claim as a medical professional, such as:

  1. Car expenses, including parking costs and tolls, if you travel between different jobs locations on the same day (for example going from doing ward rounds in a hospital in the morning to a clinic at a different location to do consultations in the afternoon).

  2. The cost of purchasing a membership with the Australian Medical Association (AMA) or other medical professional associations, as well as the cost of renewing your annual practising certificate.

  3. Professional indemnity insurance related to your work activities.

  4. Any expenses connect to buying, repairing and cleaning any work clothing items that are either part of a uniform or distinctive to your company (such as a shirt with a company logo on it) or that have protective benefits (like a face mask, hair net or gloves).

  5. Any expenses related to buying and insuring equipment or tools specifically required for your work, such as a stethoscope or scales, or a bag to transport patient files.

  6. Self-education costs for attending any courses, training or seminars specifically related to your current line of work, including compulsory professional development to maintain your medical registration, post graduate study in your current area of speciality.

  7. The cost of a first aid training course if you're a designated first aid person and need to do first aid training to assist in emergency work situations.

  8. Phone and internet expenses for any work-related usage on your personal phone or device, provided they are not already covered by your employer.

  9. Working from home office expenses such as heating or cooling, depreciation and repairs to equipment.

  10. Travel expenses such as accommodation and meals if you travel for work and need to stay away from home overnight (for example, if you need to go interstate to observe a particular medical procedure) and pay these expenses yourself.

5 things you CAN'T claim on your tax

There are several key expenses you can't claim, including:

  1. Any regular clothing worn to your workplace that could also be worn outside of work (such as black pants or a white shirt) even if you only wear it for work and bought it specifically to wear to work.

  2. Childcare costs incurred while you're working.

  3. The cost of any meals or snacks consumed during the course of a normal work day, even if you are given an allowance by your employer to cover the meal expense.

  4. Any grooming costs, including hairdressing services and buying items of make-up, even if it's a requirement of your job to be well presented.

  5. Any costs incurred when travelling between your home and your workplace, even if you live a long distance away.

What records do I need to keep?

Strong record-keeping is really important at tax time, so you need to stay on top of your receipts and have a comprehensive set of receipts if you want to get a good tax refund. It's a smart idea to create an easy and reliable system to help you keep on top of this throughout the year.

Remember, you don't need to keep physical receipts, and it's acceptable to keep a digital copy (such as a photo of a receipt or an email receipt) provided it is possible to read:

  • The name of the supplier

  • Amount of the expense

  • Nature of the goods or services

  • Date the expense was paid

  • Date of the document

You also don't need to keep receipts for expenses under $10 (as long as these don't cumulatively come to more than $200) but you must note in a dairy what the money was spent on.

What happens if I make a mistake in my tax return?

It's okay, we know this can happen to anyone and strongly recommend dealing with it as soon as possible. This is always the best approach. It's essential that you take great care in putting together the information and supporting documentation when filing your tax return, and only claim deductions that are genuine to avoid penalties and possibly even prosecution from the ATO.

It's easy to make an innocent mistakes on your tax return sometimes, and if you self-lodge and realise you've submitted incorrect or unsubstantiated claims then you should contact H&R Block immediately and we will assist you in making the necessary amendments.

Still have some questions about lodging your tax return? Talk to H&R Block by booking an appointment online.

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