Your tax structure and deductions as a self-employed physician differ from those of a salaried physician. You’ll need a clear grasp of what costs to track, what goods are deductible, and how to prepare for tax season if you’re transitioning from a salaried employee to an independent, self-employed physician. 

What distinguishes self-employed physicians from salaried medical professionals when it comes to filing taxes?

The main difference in filing taxes as a self-employed physician is what is filed. Since the hospital/clinic you work for does not deduct payroll taxes on your income, you are responsible to ensure the taxes are paid on time. You will report the total income paid from all sources as professional income and deduct appropriate expenses to calculate your taxable income for a given year. 

If you’re a salaried physician, the hospital.clinic would be responsible for deducting taxes at source and you wouldn’t have to worry about business expenditures. As a self-employed physician, however, you will be responsible for paying all of your own taxes, keeping track of your costs and receipts, and ensuring that all of your bookkeeping is in line. Since you’ll be responsible for paying all of your taxes after you file, speak with an accountant to be sure you know what you’re getting yourself into come April. If you don’t have a rough idea of how much you’ll have to pay, you can find yourself not saving enough and getting an unwanted surprise. Because a self-employed physician’s accounting demands might be extensive, it’s critical to hire a professional to assist you.

What are the expenditures that self-employed medical practitioners are allowed to claim?

When it comes to spending, as a salaried physician, you probably never considered the tax ramifications on the business. As a self-employed physician, you’ll have a range of costs to keep track of, as they’re all tax deductible. Many of these expenses are similar to those of a medical corporation, but there are some that are unique to self-employed physicians. For example, if you work from home, you can deduct a percentage of your property taxes, home insurance, home utility expenses, and phone/internet bills based on the square footage of your home office. Other expenditures that self-employed medical practitioners are able to claim include:

  • Fees for accounting services 
  • Fees for legal representation 
  • Expenses for office space and leasing 
  • Medical equipment (medical and surgical supplies) 
  • Conferences and seminars for professional development 
  • Memberships and licences
  • Salary and perks for all employees 
  • Expenses for travel 
  • Insurance is a type of protection (practice overhead, property, extended health, business interruption, vehicle, malpractice, etc.) 
  • Meals and Entertainment: You can claim 50% of meals paid for with coworkers or partners when professional topics are discussed, as well as occasional entertainment.

What you really should focus on year-round

For self-employed physicians, here are some accounting and tax suggestions: 

Receive Your Receipts and Keep Them Safe

Keep all business receipts for seven years if you want to claim them on your taxes. Even as a self-employed physician, your practice can be audited for up to seven years. Keep all of your tax documents, receipts, and other relevant information organised and accessible in annual folders.

Remain Organised 

When it comes to getting the most out of your accounting, organisation is crucial. Organise your receipts, create clear folders and file systems to manage your costs, and make sure your bookkeeping is spotless.

Monitor Your Profits

As a self-employed physician, keep track of your earnings on a monthly basis. To guide your financial planning, you’ll need to know what tax bracket you’ll be in and be able to forecast your future income. 

Prepare in Advance

Nobody likes to be surprised with a large tax bill they hadn’t budgeted for. To ensure that you’re prepared for tax season, start saving for what you intend to pay in taxes at the beginning of the year. Having an accountant on retainer to give you with a financial plan and check ins every year is also beneficial.

When it comes to self-employed physician taxes and accounting, Medtax’s accountants are well-equipped to assist you to avoid typical mistakes, and we can assist you in maximising your return and claiming as many deductions as possible to reduce the amount of tax you pay. If you’re a self-employed physician, schedule a consultation now to guarantee you get the greatest financial planning and accounting experience possible.

If you’re looking for a trustworthy accountant, go no further than our team at medtax.ca! Contact us today.

Sign up for free access to

“Top 70 Tax Deductions”
for Medical Professionals

Get the latest top tax deductions instantly, delivered straight to your email.


Get a free, personal consultation.

Call us today at (905) 815-6559