Are You Leaving Tax Money on the Table?

Karen Riccio

Disclosures

March 23, 2017

In This Article

Other Potential Deductions

Work-Related Travel

You can't deduct your commuting expenses, but you can deduct work-related travel, Tinley says. The basic gist of this is that if you go back and forth between two sites, the travel between the two is deductible, but the mileage from home to your first work trip and the drive home from the second are not. While conferences and training programs might not always fit into your schedule or budget, you can deduct any business-related travel expenses. If that involves driving long distances, you will be credited 53.5 cents per mile.

Student Loan Interest

Now that student loans are catching up with mortgages as the biggest debts held by doctors, the fact that you can deduct the first $2500 that you pay in student loan interest each year (also an above-the-line deduction) can be very helpful. However, it begins to phase out for taxpayers with modified adjusted gross income (MAGI) in excess of $65,000 ($135,000 for joint returns) and is completely phased out for taxpayers with MAGI of $80,000 or more ($165,000 for joint returns). Therefore, many physicians cannot take advantage of this.

According to the IRS website, you can claim the deduction if all of the following apply:

  • You paid interest on a qualified student loan in tax year 2016.

  • You're legally obligated to pay interest on a qualified student loan.

  • Your filing status isn't married filing separately.

  • Your MAGI is less than a specified amount which is set annually.

  • You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.

Childcare Expenses/Dependent Care Credit

If you're like many families in which both spouses work and have children, this one really comes in handy. Up to 35% of the first $3000 you spend on childcare can be taken as a tax credit if you have two or more children. That's nearly $1000 that goes directly into your pocket. The IRS also allows you to take up to a $3000 deduction for caring for a parent or other dependent individual. The care must meet certain minimum qualifying criteria and be for people incapable of caring for themselves.

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