Are You Leaving Tax Money on the Table?

Karen Riccio

Disclosures

March 23, 2017

In This Article

Some Deductions You May Not Have Thought Of

Damages Due to Disasters

As natural disasters like tornadoes, hurricanes, and even severe winter storms seem to have grown in intensity and frequency, more people are losing property or sustaining extreme damage. Those in official federal disaster areas receive some level of automatic qualification. It's strongly suggested that you seek professional advice on what specifically you can and cannot deduct if you are in this situation. For example, if an insurance company reimburses you 100%, taking a deduction is obviously prohibited.

Miscellaneous

You can also deduct:

  • Financial advisory and management fees (including the cost to have taxes prepared);

  • Property taxes—not only on your primary home but on any paid-on-time shares; and

  • Qualifying personal and business legal expenses.

You may also be eligible for tax credits for such expenses as higher education, international or domestic adoptions, energy-efficient home improvements, and each child you have (in or out of daycare).

Regarding property, if you're really getting hit with big tax bills and you've taken all the deductions and credits available, you might consider buying the building where you practice. Most of the expenses of owning and maintaining it (property tax, mortgage, interest, repairs, and upgrades) are deductible, and with the cooperation of the commercial real estate market, the property may appreciate in value over time. Still, there are many ramifications to this type of big decision, so investigate carefully.

There you have it: A comprehensive look at deductions and tax credits that all doctors should be aware of—and take advantage of when possible—whether you do your taxes yourself or hire a professional. Some of these may not make much of a difference on their own, but collectively, deductions are very effective for lowering your tax bill.

If you hire a CPA, don't be afraid to ask questions. If you're going it alone, be sure to consult the IRS tax rules. IRS.gov is a wealth of knowledge, with links to some excellent do-it-yourself software.

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