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Tax Tips for Medical Practice Owners
Tax time is a headache for many doctors, let alone medical practice owners. Even worse when you are a doctor and a medical practice owner!
Not only are you paying a lot of tax, you need to stay compliant to avoid audits and issues with the ATO while still keeping as much cash flow in your medical practice as possible.
So how do you keep on top of your tax as a medical practice owner?
Doing your tax should not just be once a year thing. You should be working and reviewing your tax position throughout the year to stay compliant and be prepared come year end.
You should be working with an accountant that specialises in the medical industry, who will understand your situation and requirements. You should have regular meetings with your accountant through the year to ensure you are on top of everything, including due dates, changes in tax laws and how they impact you and your business
Keep your records safe and easily accessible. Also, you should maintain separate files for personal and business-related documents.
Know your business structure and the rules
Every business structure has different tax responsibilities and requirements that need to be met. Medical professionals in particular have a specific set of rules that need to be followed.
Each structure also has unique features that you need to understand. Having this understanding will help you with your business and your legal requirements.
Know what deductions you are entitled to
The expenses you can claim as a deduction will depend on your practice – how it is structure and how it is run, but some common areas include:
- Professional dues or membership fees
- Professional and some personal insurances
- Medical journal subscriptions
- Medical and technical equipment
- Superannuation contributions
- The cost of managing your accounting
Being familiar with what expenses you can claim will likely see a great uplift in your return.
Keep your books up-to-date
Keeping your financials up-to-date will have multiple benefits to you: you should not be hit with any surprises, such as an unexpected tax bill, you will have current figures if you need finance, it will give your accountant the opportunity to look at your position and make suggestions to help your tax position before the end of the tax year.
You can automate things and streamline your business, use accounting software like Xero. You can also explore other practice management software that may integrate bookkeeping as one of their functions.
Get expert advice
The most important tip for a medical practice owner is to work with a medical accountant who understands your needs and your profession. Running a medical practice is unique, and a financial expert who specialises in your profession will help you identify opportunities and reduce risks.
Reach out to us if you wish to discuss your practice and your situation.