By Dr. Jim Dahle, WCI Founder
I have found tax literacy among doctors to be particularly low, so much so that many doctors get sucked into questionable investments and “tax shelters” to save minimal amounts on taxes. But there are ways for medical practitioners to find plenty of tax deductions. Today, let's take a look at effective ways for doctors to get tax exemptions so that they can reduce their overall tax bills.
#1 Tax-Deferred Retirement Plans
Tax-deferred retirement plans are the biggest tax deduction I see doctors routinely missing out on. I'd guess less than one-quarter of doctors actually max out all the retirement account options available to them. Some simply don't save enough money (a related, but separate, issue), and others simply don't realize just how much money they can squirrel away into these things with huge tax benefits.
Every dollar put into a tax-deferred retirement account isn't taxed this year. If you're in the highest tax bracket and have hefty state and local income taxes, you could have a marginal tax rate approaching 50%. That means for every $2 you put in a retirement account, you save $1 on your tax bill. That's pretty darn good.
If you're a contractor paid on 1099s, you could contribute 25% of your income to a SEP IRA, up to a maximum of $61,000 [2022]. With a solo 401(k), you can contribute $61,000 [2022], but if you're over the age of 50, you can also contribute a catch-up of $6,500 (that option is not available on the SEP IRA).
If you're an employee paid on W-2s, you may be limited to as little as $20,500 into a 401(k) [2022], but many 401(k)s will match you or at least allow you to self-match up to the $61,000 limit. If yours doesn't, I suggest you talk to your employer.
A defined benefit plan can allow you to shelter additional money from taxes, sometimes as much as another $30,000, $50,000, or even more.
#2 The Backdoor Roth IRA
This one doesn't give you a tax break, and it has recently been in the crosshairs for some lawmakers. But it does allow you to shelter retirement investments from any future taxes. The Backdoor Roth IRA is a far better option than many insurance-related tax shelters that salespeople often push on you. You can put up to $6,000 into a non-deductible IRA [2022] for you and $6,000 for your spouse (plus an extra $1,000 if 50+). Then you can instantly convert them to a Roth IRA. You'll pay the taxes this year but then it grows tax-free. There is one catch: you can't have any other SEP IRA or traditional IRA due to the pro-rata rule, but there are ways around this for most, such as rolling those IRAs into your 401(k). For a step-by-step tutorial on the Backdoor Roth IRA, read “The Backdoor Roth IRA Tutorial.”
#3 Healthcare
Health insurance is expensive, no doubt. But at least you can pay for it with pre-tax money. Your health insurance premiums could be a deductible business expense, as are the contributions to a Health Savings Account (aka a stealth IRA) that you can use for co-pays and deductibles. A high-deductible health plan combined with an HSA isn't the right move for everyone, but for the healthy, you can save a lot of money on premiums and on your taxes.
#4 Business Expenses
Many self-employed doctors miss out on all kinds of tax deductions just because they don't realize what is deductible and what isn't. If you are a sole proprietor, partner, or contractor, it would behoove you to keep careful records of your business expenses. Home office, travel, meals, accommodations, office equipment and supplies, medical equipment, CME expenses, licensing fees, communication expenses, board exam fees . . . the list goes on and on and on. The main benefit of being an owner, rather than an employee, is that you can get all these sweet deductions. That's offset by the requirement to pay the employer portion of your payroll taxes, but at least those are deductible, too.
Employees generally miss out on these great deductions. Prior to 2018, it was at least possible to deduct unreimbursed work expenses on Schedule A, but it was subject to a 2% of income floor, which for most doctors was far more than they spent. Now, you can't deduct unreimbursed work expenses at all. So, it's best to get your employer to pay for them. The employer gets to pay them pre-tax, just like you would if you were self-employed. For instance, many employees have a CME fund. You can also, of course, just become an owner. Just because 95% of your income comes from your main job, where you are an employee, that doesn't mean you can't get a moonlighting job on the side and get all the deductions a contractor would have. If the moonlighting job requires a medical license, DEA license, CME, etc., then you can deduct your business expenses from that income. Technically, you're only supposed to deduct it proportionally.
Your business doesn't even have to be medicine-related. When I originally wrote this post in 2012, the income from this blog wasn't taxed at all since I deducted office supplies, internet-related fees, and phone-related fees from it. This type of entrepreneurial path has changed the lives of many doctors allowing them to claim tax deductions and, even more importantly, helping them to reap the benefits of earning passive income. Every little bit helps.
#5 Mortgage Interest
Many doctors find themselves with hefty loans, including consumer loans, car loans, credit card loans, student loans, home equity loans, investing loans, and mortgages. While I generally advocate avoiding most of these loans and/or paying down those you take out as quickly as possible, the IRS makes carrying mortgage interest tax-friendly. If you're going to have the loans, you might as well convert them into loans that have a low rate and are tax-deductible if possible. Unfortunately, mortgage and HELOC interest is not nearly as useful as it used to be. Not only is the standard deduction higher (so fewer people deduct it at all), but these days you can't deduct interest from a mortgage or HELOC that was taken out to pay for anything besides the house and improvements on it.
#6 Charity
Doctors tend to be charitable folk. If they don't give money, they often give time. Any donations to a qualified charity are tax-deductible, just like mortgage interest (assuming you have enough total deductions to justify itemizing them), or donating large items such as an old boat. You can use Turbotax's It'sDeductible to figure the value of things you give to Goodwill. You can also count the miles used to drive to and from your charity of choice and any other expenses associated with donating your time (although you can't deduct a value for your time itself).
#7 Tax-Loss Harvesting
Investors hate losing money. But in a taxable account, Uncle Sam will share your pain. You can even get a break on your taxes without having to “sell low” by doing tax-loss harvesting. You sell a losing investment, and you buy one that is highly correlated to the one you sold. For example, you might sell the Vanguard Total Stock Market Index Fund and buy the Vanguard 500 Index Fund. These two funds generally move in lockstep, but they are different investments. You can deduct up to $3,000 a year of investment losses against your ordinary income.
What other tax deductions do you use to lower your bill? Do you think itemizing these expenses is worth your time, or would you rather just take the standard deduction?
[This updated post was originally published in 2012.]
Michael, just to validate your case, I ran an illustration for a 45 year old male, best class, using John Hancock’s UL-G 12 policy two different ways:
1. Premiums payable for lifetime with death benefit guaranteed until age 121. The annual premium was $1,038. If the insured lives to age 85, the rate of return on death is 3.89%, if the insured lives to age 90, the rate of retun on death is 3.03%, if the insured lives to age 95, the rate of return on death is 2.38% and if the insured lives to age 100, the rate of return on death is 1.87%.
2. Premiums payable for 20 years with death benefit guaranteed until age 121. The annual premium was $1,801. If the insured lives to age 85, the rate of return on death is 3.34%, if the insured lives to age 90, the rate of retun on death is 2.88%, if the insured lives to age 95, the rate of return on death is 2.53% and if the insured lives to age 100, the rate of return on death is 2.25%.
Rex, not everyone has the time, energy or interest to invest their money the way that you describe. All I mentioned was that this was an option that some people choose to use as a way to get the recognition that they want to ultimately benefit a charity.
You stated “Well if that person has any hard financial times later on and misses a payment then the policy goes bust. This can be especially true for someone who doesnt have the resources to give a big gift. If you actually live longer than you thought and thus dont save enough for retirement then again the policy goes bust and the charity gets nothing but you will have paid tons over the years. If you become too ill in your last few years of life (which also may have serious financial costs), then maybe a payment will be missed by accident alone and again the policy goes bust.
Based on the premium amount, I can’t imagine things getting so bad for a physician that even if the decided upon the lifetime payment option, they couldn’t make the premium payment. However, if for some strange reason, they could not, the association could make the premium payment as they are the owner and the beneficiary. The charity could also surrender the policy for the cash value if they did not want to carry it any longer or if the insured became very ill, the charity could again make the premium payment or possibly sell the policy to a third party.
Believe me when I tell you this – it is not worth my time nor Michael’s to run around actively soliciting these types of policies.
It was just mentioned for educational purposes. You have made your point. Micahel and I have made ours. Let’s just move on to another topic.
I love the garbage just for educational purposes and im not actually voicing my opinion. I think most people see right through that. Neither of you will be able to provide any intelligent reason to use this strategy. Why bring up bad ideas, defend them, and pretend its just for information. In fact there is never an intelligent reason to use permanent insurance to grow money. As noted, this strategy easily could provide returns below inflation. Again the bottom line is only buy permanent insurance for a need for a permanent death benefit. My impression is that this site is for intelligent financial decisions. I could tell people buy loaded managed mutual funds to reduce the work etc but you wont find anyone pushing that here and if they do then they will get the same reception from me. It has to do with bad advice that you are pushing. In regards to your final ideas for the charity in a worse case scenario, what probably would actually happen is the policy would just lapse (since likely the charity wont know of the ill health of their member) and only the agent and company would have benefited. The percentage of permanent policies that dont stay in force until death just says it all. Why dont you just admit that its not an idea appropriate for the crowd coming to this site.
In the thread on disability insurance for retirement contributions, I gave my opinion and stated all the details of how the plan works so visitors of this site would have a better understanding of it.
I simply mentioned the life insurance idea as it is a strategy that is available and often used as a deferred giving instrument. That is the only reason.
If you think that I just post to try to have people call me to purchase products, you are sadly mistaken.
Rex, we (as well as every other reader of this blog) know where you stand on this issue.
Lawrence, a nominal 3% or even 4% return for a 40 year period is likely to be a TERRIBLE return if even a positive real return. Inflation alone will probably
be roughly in that range if not higher. Insurance salesmen seem to love to use nominal and not real returns. I am with Rex for the most part on this thread.
Besides the whole concept of trying to get more recognition than you deserve for a gift does seem absurd to me.
I agree that 3-4% for a 40 year investment is pretty poor. But then again, a 30 year treasury is only 3.15% right now. What is an insurance company supposed to invest in to get significantly higher returns?
The underlying point is not what a insurance company should invest in but whether an insurance company should be involved as a middle man at all. If they can not provide a guaranteed positive REAL return, I do not see their value. Remember, they are needing to invest in more risky assets than federal bonds (e.g. corporate bonds and real estate) to provide similar returns to what a risk-free government bond can pay while covering their expenses (employees, commissions, other expenses).
I personally intend to use a VG or other charitable donor advised fund, take the immediate tax deductions and have that money invested 50-60% in equities. No need for insurance companies, much higher expected returns.
The truth is you are both saying the same thing but from different angles.
If interest rates remain low for a long period of time, the companies will either need to invest in riskier assets and thus the guarantees arent as solid or they could go completely bust since they arent making enough of a profit and then you now need to hope the state guaranty association can help you out. At the moment, some of these companies are cutting back on gUL products bc they are concerned about that exact issue. One way they can do this is bc making the criteria for excellent health more difficult to obtain. Thus if you are actually excellent but they rate you as less than that, they on average will pay out an even lower return.
No matter how they spin it, once you understand permanent life insurance, it should never be used to grow money or as an investment. Its primary focus must always be a need or extreme strong desire to have a permanent death benefit. It doesnt matter if its a gift or some other spin, its always a bad idea.
“Its primary focus must always be a need or extreme strong desire to have a permanent death benefit.” BINGO – this is the most important issue. Without the need or desire for permanent death benefit, there are many better options to be considered.
Regarding the gUL, it isn’t so much that they are cutting back, because there are still plentyyy of companies offering it, but the pricing has definitely continued to increase over the years.
those all lead to the same thing which is poor return. How you coach it doesnt matter. You can increase the price on excellent health or put someone in a lower category or whatever. It does also cut back on sales since pricing matters. Its a subtle but probably necessary way of cutting back.
ive said that quote probably half a dozen times here. The issue becomes is almost nobody needs a permanent death benefit and once someone really talks through the issues, very few have a desire since it likely means less money for both you and your heirs if the insurance company has appropriately judged your lifespan/risk. There are some situations where you just cant take that chance like having a disabled child who has a long lifespan but for most situations it isnt necessary to have a permanent death benefit.
As a curiousity, how have these permanent life insurance policies fared since 2000 with the stock market nominally returning less than 3%? I would assume a lot of these universal life insurance policies lapsed as the premiums got more and more expensive.
Im not aware of published numbers in that date range and frankly the industry does a good job of keeping the numbers on lapses of permanent policies a secret and you have to search hard to get any reasonable info. In general about 1/3 surrender permanent policies within 5 years, over 50% by a decade and only about 25% at best keep in force until death. Insurance folks like to pretend its a good forced savings plan and the stats show the exact opposite. That is one of the reasons why with UL that you really should purchase gUL if anything at all and id highly recommend not buying any UL for most people. With that secondary guarantee as long as you pay that minimum the policy stays in force. You are purposefully not overfunding the policy bc you want to pay the minimum to get the death benefit. Thus you are not concerned with the actual cash surrender value. As i mentioned there are all kinds of problems still with this and its usually best for an older person who NEEDS permanent insurance and already has all their other stuff paid for and thus can be more confident that they wont ever miss a payment. That person then wouldnt have to worry about the poor return of the market per say although depending on what the insurance company is invested in over the long haul, the guarantee could be less firm.
Below is a link to a very good article on Universal Life with No Lapse Guarantees
https://www.lifeinsuranceadvisorsinc.com/articles/individuals/UniversalLifeNoLapse.pdf
Hi – thanks so much for this really helpful article! I do have a question, though – under “Business Expenses” you mention board exam fees. I was also under the impression that these could be deducted if one had self-employed/contractor status. Could you point me to some place where the IRS says this? I’m considering including my board exam fees under startup fees or business expenses, but would feel more comfortable if I had some evidence to point to (should the IRS come a-callin’). Any would be much appreciated!
Great question. I actually looked it up in Publication 17 where it specifically says this:
“Professional Accreditation Fees
You cannot deduct professional accreditation fees such as the following.
Accounting certificate fees paid for the initial right to practice accounting.
Bar exam fees and incidental expenses in securing initial admission to the bar.
Medical and dental license fees paid to get initial licensing.”
It doesn’t specifically say you can’t deduct medical board exam fees, but given that you can’t deduct bar exam fees, I think you can presume that you can’t deduct medical board exam fees, at least for your initial board certification. However, once initially certified and licensed, you can deduct relicensing fees (and presumably, re-certification fees)
“Licenses and Regulatory Fees
You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession.”
Future board certification exams would qualify for a deduction as “qualifying work-related education” (See pub 970).
” If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. This reduces the amount of your income subject to both income tax and self-employment tax. ”
Again, your initial education (med school) doesn’t count, but ongoing education (i.e. CME) does.
I hope that clarifies things.
Jim, it seems like you are lumping initial board certification with initial medical licensure. Since medical licensing is separate from board certification, and since being board certified is not required to practice medicine (all one needs is medical licensure and a state license) or to practice within a specialty (i.e., being board eligible works, and some places will hire a physician even when not certified), wouldn’t initial board certification fees and expenses be deductible? It seems that the “Initial” accreditation component specified by Publication 17 is met by securing initial medical/state licensure. I am asking because I have 1099 income this year and I would like to deduct my expenses for board certification. I’m sure others have a similar question. Thank you!
I think you should look at Figure 12-1 in Pub 970 before deducting your initial board certification fees. It’s a little gray, but I think you can make a good argument to deduct initial board certification fees. Worst case scenario, you get audited, the auditor disagrees with your assessment and you pay penalties and interest on that.
Yes, but ah, here’s the rub. That first part, from pub. 17, appears to assume reference to individuals who are filing as employees and not as self-employed or as sole proprietors. This is where the guidelines get murky for me. It seems to me that the tax treatment depends less on the expense itself and more on the perspective of the taxpayer, i.e. employee vs. self-employed.
The bar exam example is instructive, I guess. One can’t practice law–either in a larger firm or hanging a shingle–without incurring those fees. However, the self-employment guidelines state that a business expense (for non-employees) is anything that is “ordinary and necessary.” Those fees would count then, as one could not open a business devoted to a particular practice without those initial licensing fees. Just hazy enough.
At any rate, thanks for your response!
This specific post, “7 Tax Deductions Doctors Miss Out On | The White Coat Investor- Investing And Personal Finance Information For Physicians,
Dentists, Residents, Students, And Other Highly-Educated Busy Professionals” shows the fact that you
actually understand exactly what you’re talking about! I personally totally approve. Thanks a lot ,Barrett
Not to beat a dead horse but while agree with most of Rex said, depending on the state, a permanent life insurance policy or annuity is a great way to add more asset protection. If done reasonably, i.e. max funded, plus all other avenues like 401k plus IRA are contributed to at the max level. Of course there are other items MDs can add to increase their asset protection but I see nothing wrong with asset protection plus tax deferral being the most relevant reasons for an MD to purchase such a contract. It is up to the agent to make sure the contract is structured properly and that is usually the problem.
As a general rule, buying a permanent life insurance product or an annuity just for asset protection purposes probably isn’t a good idea. Perhaps for a doc going bare in Florida who doesn’t want to buy more home (or car) and has already maxed out wage accounts, retirement accounts etc I could buy it. But for most of us, insurance (malpractice and umbrella) is going to provide all the asset protection we need.
WCI… I think my post was pretty accurate. I did mention that other avenues are funded first, and that is how I do my planning for doctor clients here in Florida. Unfortunately, I don’t feel as though docs in private practice have access to really good, affordable malpractice coverage. I have an OBGYN in CT who had something like 20mill of coverage through her hospital and I have docs in Florida that have 250k-1 mill in FL. CT also doesn’t protect annuities or life insurance like FL does. Lawyers love to hear that their client can sue a doctor, for any reason not just malpractice. Remember, not all docs are really smart with their money and a BK could be the result of many different things, in FL the money in CSV life insurance and annuities would be protected. Before I suggest these products my doc has to be contributing the max to their retirement plan, fund IRA and spousal IRA, higher limit coverage on auto, umbrella of at least 2 million as a carrot for attorneys. When their is money left over then it can be partitioned, mostly to NQ investment account and then a small portion to max funded life or into annuity. That’s my opinion and it I think it is good planning.
Howdy just wanted to give you a quick heads up and let you know a few of
the images aren’t loading properly. I’m not sure why but I think its a linking issue.
I’ve tried it in two different internet browsers and both show the same outcome.
Which images?
Above you wrote, “Just because 95% of your income comes from your main job, where you are an employee, doesn’t mean you can’t get a moonlighting job on the side and get all the deductions a contractor would have. If the moonlighting job requires a medical license, DEA license, CME etc, then you can deduct your business expenses from that income.”
Let’s say those license fees come to $1000 per year (and I don’t get reimbursed by my employer for them). Let’s say about 10% of my total income is from consulting as a 1099 sole proprietor, 90% is from my main W2 employee job. Can I deduct the whole $1000, or just 10% ie $100 on schedule C? This is my first year doing the consulting so I’m curious what I can deduct.
The way I look at it is that you need that entire license in order to moonlight, not just 1/10 of it. So I deduct the whole thing. Here’s a link to the definitive guide. https://www.irs.gov/publications/p535/index.html
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
Hello!
Thanks so much for all the helpful info. I found you while googling about my situation, and I haven’t been able to find an answer. Basically, I took the year off to help my mom try and get back on her feet after my dad died, and then after her surgery. I did not have any income last year (living off my savings and my mom). But I did have to recertify for my boards and renew my state medical licenses. Since I didn’t have any income, I was told I didn’t have to file income taxes for 2014 this year. My question is regarding my 2014 expenses. Can I defer and deduct my 2014 medical licenses and recertification fees with my year 2015 taxes? Does any of this make sense??? I would appreciate any advice or help! Thanks!
Generally only if you pay the expense in 2015. Although I suppose a business is allowed to have a loss in any given year. Do you have a business yet?
BTW- your mom may be able to claim you as a dependent this year. That might help her taxes.
Thanks so much for your quick response! No, no business – I was an employed physician, and these fees were all definitely paid in 2014.
So, if my mom is able to claim me as a dependent, would she then be able to use my board and license fees as a deduction (education or something)?
Thank you again! I really appreciate the help 🙂
No, she wouldn’t.
So, unfortunately, it sounds like I won’t be able to use the expenses I paid for last year on any taxes. Bummer! I truly appreciate all the info though. Thank you!
Probably not unless you can justify them as a business expense on Schedule C despite having no Schedule C income. If you were moving into a 1099 position sometime this year, perhaps it would be justifiable.
Are state income taxes deductible? For a physician making $300,000 with a 6% state income tax, that would be an $18,000 deduction. That would have surely made the Top 7 list above, so I must be missing something.
That’s a good point, probably should have included it.
But $300000 x 0% = $0 so it most definitely would not make my top 7 list.
I’ve been trying to find out if the Sequestration Fee that Medicare has deducted from payments to my practice during the past year are a tax deduction on federal taxes. Can you help?
Money that you aren’t paid is already a deduction, since it wasn’t counted toward your income. That’s like trying to write off bad debt- you just can’t do it. So I’m pretty sure that fee is not deductible.
Hi WCI,
I have two questions and was not sure under which link to leave them.
1. The first is regarding home office deductions. It is actually for my wife who is a graphic designer and we have read through all the criteria she needs to meet (dedicating a separate physical area in the house, she must be doing a majority of her administrative and billing at the home office, etc.). I understand that the deduction would be for a portion of the mortgage interest, electricity and internet use but that we would have to give up these deductions and pay back when we sell the house. Is this correct?
2. The second question is regarding minimizing taxes from dividends. This year, I will owe a few thousand extra dollars in federal income taxes due to a combination of ordinary and qualified dividends (mostly ordinary). It was a much less significant amount last year. Obviously, it’s a good sign that I am growing my investments but do you have any suggestions on how to minimize the ordinary dividend portion at least?
My holdings in the taxable account are entirely VTSAX, VTIAX and VBTLX (in a 14:7:1 ratio, my tax deferred accounts have more VBTLX).
Thanks.
JS
1. I don’t think your home office deductions get recaptured upon selling the house. I’d have to look it up though. That sounds like a depreciation deduction. I suppose if you took that, you’d have to have that recaptured. Let’s see what I can find…..
How about this: https://www.bankrate.com/finance/money-guides/home-office-can-have-hidden-tax-costs-1.aspx
This says that yes, if you take depreciation that gets recaptured. Still, that’s a relatively small portion of the deduction compared to everything else (mortgage interest, utilities etc)
2. VTSAX and VTIAX don’t kick out much in ordinary dividends. You’re probably getting nailed by your bond fund. Would a muni bond fund be a better idea for you?
I do have Total Bond but it is a small amount so the dividends are small.
Here’s what I received from
VTIAX: ordinary dividends $1,960.46 and qualified dividends $1402.32
VTSAX: ordinary dividends 1908.05 qualified dividends 1908.05
Total Bond: ordinary dividend 381.96
I’m sorry your portfolio is so big that you’re making so much money you have to pay so much in taxes. 🙂 Seriously, there’s not much more you can do other than max out retirement accounts and use a muni bond fund instead of total bond. Those stock funds are some of the most tax-efficient funds out there for a taxable account. Be sure you’re claiming the foreign tax credit for the international fund.
“If you’re an employee (paid on W-2s) you may be limited to as little as $17,000 into a 401K, but many 401Ks will match you or at least allow you to self-match up to the $50K limit. If yours doesn’t I suggest you talk to your employer.”
I work as an employee and thought that the max I could put into my 401K was (now) 18500? So, you’re saying it might be possible to put even more than that in my plan? Considering how much I’m paying in taxes right now, this sounds very smart.
Did you read the date on the article? At the time it was written, $17K was correct. In 2017, the amount is $18,000. https://www.401khelpcenter.com/2017_401k_plan_limits.html#.WFWEQrYrJE4
It’s never been $18,500.
But yes, it’s possible to put more in it and it is a smart thing to do. But your plan has to allow it. So read your plan document.
I’m the managing partner for my group practice and spend 1-2 days per week working from home on the office books as well as catching up on charting. I also work one day per week doing contract work at a clinic that is a separate entity from my private practice. Is it possible to count a car lease as a business expense since I’m working from home and/or traveling to a secondary clinic site for half of the week?
https://www.whitecoatinvestor.com/business-mileage-the-holy-grail-of-tax-deductions/
2 Questions I haven’t seen answered:
Background: I get a K-1 Partnership tax form for a job as a hospitalist, which is in addition to a research fellowship.
1) Cell phone expenses – can any portion of this be deducted? The hospital uses pagers but I often supplement with cell phone usage and use it for certain parts of my job (verbal signout, etc)
2) I just recently found out that 1st author publications and posters can earn CME (https://www.ama-assn.org/education/claim-cme-credit-ama). I purchased a software package that is absolutely required to do the work necessary to get my pubs/posters completed in order to get the CME, I was not reimbursed by anyone for this software. Can I deduct this?
For #2 – I essentially need to purchase this yearly, I did not deduct last year thinking it was more related to my other job as a research fellow for which I get a W2. However, now that I realize you can get CME for research work, I am thinking there is a clear direct path of software–> poster/pub–> CME which is then clearly related to my job as a hospitalist.
Does this make sense?
Thanks for everyone’s input!
1) Yes. the portion you use for your job. If that’s 1% of your usage, then you can deduct 1% of the cost.
2) Sounds like a valid work deduction to me. You can file a 1040X if you want to claim it for last year.
Perfect, thank you!
James