When running your own business, it’s critical to understand which expenses are deductible and how to properly manage them. One key rule is that all medical-related expenses tied to your profession should be paid from your business bank account, not your personal account. Maintaining proper records is essential for compliance and audit protection. Here’s a guide to help you navigate these deductions.
What Qualifies as Deductible Medical Expenses?
Think of it this way: If you were working at McDonald’s, would you need this expense to perform your job? If the answer is no, then it likely doesn’t qualify. Below are examples of deductible expenses:
Continuing Medical Education (CME) – Courses and seminars that maintain or improve your skills.
Professional Dues – Membership fees for associations and organizations relevant to your practice.
Licenses – Necessary certifications to continue practicing in your field.
Uniforms and PPE – Scrubs, masks, gloves, and other required protective gear.
Work Tools – Stethoscopes, watches, Fitbits (if used for work purposes).
Non-Slip Shoes – For safety in medical environments.
These expenses should be ordinary and necessary for your professional activities. Keep them business-related and within reason.
What Doesn’t Qualify?
Not all items you need for work are fully deductible, especially if they cross into luxury or personal indulgence. For example:
High-End Watches – A watch is a useful tool, but a Rolex is excessive.
Luxury Luggage – If you're traveling for work, luggage is necessary, but purchasing designer brands like Louis Vuitton doesn’t count as a deductible expense.
Luxury Accommodations – Staying at the Ritz-Carlton while on assignment may be tempting, but it’s not a reasonable deduction.
Additionally, while you may sweat in the OR, getting Botox in your armpits to stop it doesn’t qualify as a business expense.
Final Thoughts
Keeping your expenses ordinary, necessary, and relevant to your profession is key. For more details, be sure to refer to our presentation on "Ordinary and Necessary" to better understand how to categorize these costs.
By following these guidelines, you’ll ensure your business expenses are properly recorded and fully compliant with tax regulations.
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