Tax Reduction Strategy Series – Part II
We continue our series on three key steps physicians can take to reduce thier tax burden with today’s focus on Tax Deductions.
Strategy 2: Increase Your Deductions
The biggest reason most people pay more taxes than is necessary is their failure to capture all of the tax deductions available to them. Through itemized deductions, physicians can lower their AGI even further.
Although, in recent years, many deductions for high-earning physicians have been limited through “phase-out” rules, there are still plenty of opportunities.
- Relocation expenses1
- Job search expenses 1
- Professional dues, subscriptions1
- Investment, tax preparation and legal fees
- Mortgage interest and points2
- Property taxes 2
- State and local income taxes2
- Car registration fees1
- Medical expenses (for expenses above 10% of your AGI; 7.5% for individuals 65 and older)
- Casualty and theft losses
- Unreimbursed business expenses of an employee 1
- Out-of-pocket charitable contributions (up to 50% of your AGI)
In order to deduct any of these expenses, the total must exceed your standard deduction and personal exemptions. But, if you have a system for keeping records and receipts, you’ll likely find your deductible expenses to be higher than you think.
Other posts in this series:
Strategy 1: Reduce Income
1) Subject to the 2% of AGI floor
2) Subject to the new phase out rules in which
Every individual’s tax situation is unique; therefore, this article is intended to be informational only and not as specific tax advice. Please consult a tax professional.