Medical practice owners often wonder what costs they can actually write off on their taxes.
Essentially, the IRS allows deductions for ordinary and necessary costs that keep your practice operational.
Still, not every bill that arrives in your inbox is deductible, and the rules can be more subtle than you might think.
This guide will help you differentiate deductible expenses from non‑deductible ones, ensuring you retain more of your hard‑earned income.

Understanding the Tax Code
The principal rule governing medical practice deductions is Internal Revenue Code Section 162, which permits deductions for "any…expense…which is incurred in carrying on…a trade or business."
For medical practices, this implies any expense that is ordinary (standard in your field) and necessary (facilitates income generation).
While the IRS treats some health‑related expenses differently, the majority of everyday practice costs are firmly within Section 162.

Classes of Deductible Expenses
The rent paid for the location where you see patients, conduct staff meetings, or store medical records is fully deductible.
Utility expenses (electricity, water, heating, internet, phone lines) that sustain daily clinic operations are deductible.
Property taxes and insurance premiums for the office property are also deductible.
Medical tools, diagnostic devices, and computers directly employed for patient care are eligible.
Refillable items such as syringes, gloves, and other sterile supplies are deductible as they are considered ordinary and necessary.
Expensive equipment may require depreciation over multiple years instead of a single expense.
Wages, bonuses, and commissions paid to doctors, nurses, technicians, and administrative staff are deductible.
Employer-paid health insurance, retirement plan contributions, and other employee benefits are considered business expenses.
Costs for staff training and continuing education to keep your practice current are also deductible.
Fees to state medical boards, licensing authorities, and specialty societies are deductible.
Dues for professional societies providing continuing education or networking can be deducted.
Legal and accounting expenses that help your practice comply with regulations and manage finances are deductible.
Costs associated with brochures, business cards, website development, online ads, and local media spots are deductible.
Social media marketing, search engine optimization, and patient outreach programs also qualify as ordinary expenses.
Yet, personal or non‑business advertising is not deductible.
Malpractice insurance is a critical deductible expense.
Premiums for general liability, property, workers’ comp, and cyber‑security insurance are deductible.
Self‑employed practitioners can deduct their own health insurance premiums as an adjustment to income.
Travel expenses for continuing education seminars, conferences, or to meet with suppliers can be deducted.
Business‑related meals—like a lunch with a potential collaborator—are 50% deductible.
Maintain detailed records to support these expenses.
For significant purchases such as MRI machines or surgical suites, depreciation over 7–10 years is allowed.
The IRS offers depreciation schedules, e.g., MACRS, to spread expenses over time and retain a tax benefit.
Pens, paper, toner, and other consumables that keep the office running are deductible.
Software subscriptions, cloud services, and electronic health record (EHR) systems also count as ordinary business expenses.
Routine repairs that keep equipment functioning—like fixing a broken X‑ray machine or repairing a broken bathroom fixture—are deductible.
Significant renovations altering the office structure are handled differently and may require depreciation.

What is NOT Deductible
Identifying what is not deductible is just as vital:
Personal expenses such as meals with friends, personal travel, and non‑business hobbies are not deductible.
Political contributions, such as donations to parties or campaigns, are not deductible.
Fines and penalties: Penalties imposed by the IRS or other regulatory bodies are not deductible.
Cosmetic upgrades lacking direct business purpose: Even a fresh paint job may not qualify if it’s purely aesthetic without functional benefit.
Some health‑insurance premiums: If you’re paid a salary and also purchase health insurance separately, the portion that is not considered a business expense may not be deductible.

Record‑Keeping Strategies
The IRS values thorough records. Here’s how to maintain your books properly:
Separate Accounts: Keep a dedicated bank account and credit card for all practice expenses.
Receipts: Save every receipt, invoice, and statement. Digital scanning is fine—just keep the originals or copies in a secure folder.
Detailed Logs: Record travel, meals, and equipment purchases with dates, 節税対策 無料相談 purposes, and amounts.
Depreciation Schedule: Track depreciation of large assets with a spreadsheet or accounting software.
Annual Reviews: Conduct a year‑end review of all expenses against IRS categories to avoid missing deductions.

Tax Filing Strategies
Section 179 Deduction: If you buy qualifying equipment, you might be able to expense the full cost in the year of purchase instead of depreciating over several years.
Bonus Depreciation: New tax law enables accelerated depreciation on selected assets, providing a larger early deduction.
Qualified Business Income Deduction: Eligibility for your practice could lower taxable income by up to 20%.
Account for COVID‑19 Credits: Receiving CARES Act or other pandemic relief means double‑counting deductions could occur—watch for it.

Consult a Professional When in Doubt
The tax code is ever‑changing. A CPA or tax attorney focused on medical practices can guide you:
Identify all possible deductions.
Select a business entity (LLC, S‑corp, etc.) that maximizes tax benefits.
Keep compliant with IRS rules to prevent audits.
Keep you up to date on new tax incentives for technology or patient care improvements.

Final Thoughts
Deductible medical practice expenses are more than a tax‑saving tool—they mirror what’s needed to provide quality patient care.
By understanding which costs count, keeping meticulous records, and working with a knowledgeable tax professional, you can ensure that your practice remains financially healthy without compromising on the services you provide.
Remember: a well‑managed deduction strategy is just as essential to your practice’s longevity as your clinical expertise.