As a medical professional, diagnosing and treating health issues in your patients comes as second nature. However, how often do you stop and assess the relative ‘health’ of your personal finances? If you work in the healthcare sector and don’t keep the right records or are not aware of what you can claim at tax time, you may be missing out on reclaiming money that has been taken out of your wages in tax throughout the financial year.  Regardless of whether you are a GP, surgeon, nurse or chiropractor, there is a high chance that you are eligible for a pretty long list of deductions that could help lower your taxable income on a yearly basis.

In this blog, we explore a list of the best tax deductions for medical professionals in Australia, including some useful information about best records keeping practices that will help to keep you on top of your finances.

What do I need to know about claiming deductions?

Generally, there are 4 important things to know about claiming deductions as a medical professional:

1. Expenses need to come out of your pocket (ie, they cannot have been reimbursed by your employer);
2. The expenses you claim are directly related to you carrying out your duties as a medical professional;
3. You need to keep a record of the expense such as a receipt or invoice in order to claim deductions at the end of the financial year; and
4. You will need to distinguish between what part of the expense was used for personal use and what part of the expense was related to work – especially with vehicle and mobile expenses.

Tax deductions for medical professionals

It is no secret that each tax return is different, with varying roles and responsibilities depending on the year. However, there are a range of common deductions for medical professionals in Australia including:

1. Work related motor vehicle / travel expenses

Did you know that you are eligible to claim work-related motor vehicle expenses as a medical professional? Whether it’s driving from your practice to a local hospital or work or making house calls in between shifts, it is important to ensure you claim your associated travel expenses. This can include public and commercial transport or the cost of using your own personal vehicle for work-related travel. If you are using your own personal vehicle to drive a significant distance for work (over 5,000km per year), you should always keep a logbook of distance travelled over a period of at least 12 weeks, plus keep all car related receipts including petrol, servicing, tyres etc.

Other work related travel tax deductions for medical professionals may include, but are not limited to:

• Taxi or rideshare fares
• Parking fees
• Bus fares
• Train fares
• Rental car expenses
• Plane tickets
• Road toll expenses.

Note: One important thing to note is that the ATO will not allow you to claim a deduction for the car or travel expenses incurred for trips between your home and your principal place of work (and vice versa).

2. Work related self-education

Have you signed up for a class or course to further your skills and career as a medical professional in the last financial year? If so, you may be able to claim a deduction for self-education and study expenses if the education relates to your employment activities, including compulsory professional development to maintain your medical registration.

Education related tax deductions for medical professionals may include, but are not limited to:

• Course materials and Fees
• Phone bills
• Internet
• Travel costs
• Accommodation and meals
• Tools and equipment
• Books and training manuals.

Note: You can only claim self-related work education deductions if your study directly relates to your current position. For example, you can’t claim a nurse training course if you are not already a nurse.

3. Tax deductible uniform expenses

If you wear protective clothing, or other specialised outfits for work, you may be able to claim these expenses as deductions come tax time. This includes any expenses for repairing and cleaning any work clothing items that are either part of a uniform or that have protective benefits (ie face masks, gloves, hairnets). Don’t forget to include any special footwear or other protective items you might have needed to purchase for work.  

Note: The ATO will not allow you to claim a tax deduction for ordinary clothing that you wear to work. 

4. Work related tools and equipment

If you’ve purchased tools or equipment such as a stethoscope, medical bag or blood pressure monitor for work, it is important that you don’t miss out on these valuable tax deductions. 

Other work-related tools and equipment tax deductions for medical professionals may include, but are not limited to:

• Technology (computers, hard drives, headphones etc)
• Technology leasing costs
• Work related phone expenses
• Software and stock licensing fees
• Office stationery
• Protective items 
• Equipment and tool repair costs 
• Equipment and tool insurance.

5. Medical registrations and journal subscription

Professional membership fees with medical associations such as the Australian Medical Association or Australian Health Practitioner Regulation Agency (AHPRA) are considered a tax-deductible expense, including the renewal practising certificates and medical registration fees. Beyond this, your work-related medical journal subscriptions are also considered tax deductions for medical professionals.

6. Other tax deductions for medical professionals

Depending on your field of work and individual circumstances, some other tax deductible expenses for medical professionals in Australia include, but are not limited to: 

• Professional indemnity insurance
• Income protection insurance
• Tax agent fees
• Work related portion of phone expenses
• Home office expenses (if you work remotely).

Learn more about deductions for work related expenses on the ATO website. 

Record keeping for medical professionals

It is imperative to know that if you don’t keep records of your work-related expenses, you simply cannot claim them as a deduction. As such, records keeping plays an integral role in ensuring that you are properly reimbursed at the end of each financial year. Recording your expenses and sorting them into categories of expenses as they occur instead of retrospectively not only helps to keep you on top of things,  but will save you a ton of time and effort when it comes to organising everything at tax time. 

Note that it is not compulsory to keep physical receipts, as long as you have a digital copy (such as a photo of a receipt or an email receipt) provided it is legible.

How we can help

At AFS & Associates, we work with a variety of medical professionals and health specialists to deliver high quality accounting and advisory services. We help you maximise taxation opportunities and provide proactive finance planning and structuring. Our team remains abreast of regulations, software, trends and compliance requirements, providing targeted advice and solutions that reflect the unique needs within this sector.

Regardless of whether you are a GP, surgeon, dentist, psychologist, physiotherapist, podiatrist or chiropractor, we offer tailored solutions for fostering success, including:

• Accounting support
• Business advisory services
• Taxation advice
• Business structure setup and advice for starting your own practice or clinic,
• Practice management assistance
• Succession planning
• Wealth creation
• Budgeting
• Lending advice
• Software setup and support.

If you would like to talk to our specialist team please call AFS on (03) 5443 0344 or simply head to our contact page today.