As a general rule, you can deduct from income any expense incurred to earn income. While there are exceptions and limitations, keeping this principle in mind will help you determine if an expense is deductible for tax purposes. Always consult your tax advisor to confirm whether specific amounts are deductible.
If you have questions about additional deductions or need tailored advice, feel free to contact one of our experts. We’re always here to assist with all your tax-related inquiries.
Below are some industry-specific deductions physicians can likely claim on their tax returns, depending on their unique circumstances.
Professional/Educational Fees
As a member of professional organizations, you likely pay annual fees and insurance premiums to practice medicine. These amounts are 100% tax-deductible in the year paid and may include:
- PD courses
- Research journal subscriptions
- CMPA insurance premiums
- CPSO, OMA, RCPSO, or other membership dues
Travel Expenses
Expenses incurred while traveling for work-related purposes can often be deducted. Examples include attending a conference or temporarily relocating for work (e.g., locum placements).
You may deduct:
- Airfare or vehicle expenses related to the trip
- Hotel/lodging expenses
- Meals and groceries while away from home
- Entertainment expenses (e.g., meals with colleagues)
- Conference fees
- Taxis/ridesharing services
Home Office Expenses
If you work from home regularly and don’t have an office at your clinic or hospital, you may be able to deduct a percentage of your home expenses. The percentage is typically calculated based on the square footage or number of rooms in your home used exclusively for work.
Deductible home office expenses may include:
- Mortgage interest
- Rent
- Utilities
- Property maintenance/repairs
- Condo fees
Make sure to consult your accountant to maximize your claim.
Vehicle Expenses
Vehicle expenses are deductible only when they are directly related to earning business income. For instance, driving to house calls, between clinics, to a conference, or to meet with your accountant qualifies. However, commuting to and from your clinic or hospital is considered personal and cannot be deducted.
To calculate your vehicle expense deduction, track the total kilometers driven for work and use the prescribed rate set by the CRA.
Specific deductible vehicle expenses may include:
- Lease payments
- Interest on car loans
- Gas
- Toll charges
- Parking fees
- Repairs and maintenance
- Insurance
Office Expenses
Expenses directly related to your work are deductible and may include:
- Scrubs and lab attire
- Office supplies
- Medical tools and equipment (e.g., stethoscopes)
- Cell phones
- Laptops and tablets
- Office furniture
- Gifts for staff or colleagues
- Billing agent fees
- Locum fees paid
- Office rent or shared clinic overhead
- Health insurance premiums
- Meals and entertainment for staff or colleagues
Incorporate an MPC
Physicians may benefit from incorporating their practice as a Medical Professional Corporation (MPC). Incorporation offers several advantages, including:
- Tax savings from income splitting
- Tax deferral by retaining and investing income within the corporation
- Flexibility to accelerate or defer income reported on your personal tax return
Consult with a financial advisor or tax professional to assess whether incorporation is right for your practice.
Need Help Navigating Physician Tax Deductions?
Taxes for medical professionals can be complex, but you don’t have to navigate them alone. If you have questions or need personalized advice, contact one of our experts. We’re happy to help!
