Now that tax season is over, it’s time for physician practices to start saving receipts and filing records again.
There are more than 400 possible deductions that practices can take, although most physicians only know of a few common ones.
“Most docs are taking somewhere in the neighborhood of 40 deductions,” said Drew Miles, founder of Pathfinder Business Strategies. “We’re finding things they’re spending money on that can help save (on taxes). Rent, copy machines, vehicles, etc. ... can be deducted.”
Services like Pathfinder can help physicians develop a plan for organizing deductible expenses and filing taxes, Miles said.
Although business taxes need to be filed by March 15 each year, physicians – especially those who are self-employed – can choose to pay their taxes in quarterly installments instead of in a single lump sum.
“What we’re finding is that doctors are, on average, paying about 31 percent in taxes,” said Miles. “But the richest people in the country pay less than 10 percent.”
According to Miles, some Pathfinder customers are now paying only eight or nine percent of their income in taxes, and while 10-15 percent is commonplace, less than 10 percent is the goal.
“Our country’s poor economic status isn’t likely to change soon, so it’s much more important for doctors to take advantage of tax breaks they’re legally entitled to,” said Miles.