Medical practice owners regularly ask which costs are truly deductible on their taxes.
The bottom line is that the IRS allows deductions for ordinary and necessary expenses that help you run your practice.
However, not every bill that lands in your inbox is deductible, and the rules can be more nuanced than you might expect.
Here is a practical guide that will help you distinguish deductible expenses from non‑deductible ones, keeping more of your hard‑earned money.

Grasping the Tax Code
The key provision that governs 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."
In the context of medical practice, this translates to any expense that is ordinary (typical in your profession) and necessary (aid in generating income).
The IRS also treats certain health‑related expenses differently, but most routine practice costs fall squarely under Section 162.

Types of Deductible Expenses
Rent for the space where you see patients, hold staff meetings, or keep your medical records is fully deductible.
Bills for utilities (electricity, water, heating, internet, phone lines) that back the day‑to‑day functioning of your clinic may be deducted.
Office property taxes and insurance premiums 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.
Contributions by the employer to health insurance, retirement plans, and other employee benefits are business expenses.
Costs for staff training and continuing education to keep your practice current are also deductible.
Fees paid to state medical boards, licensing bodies, and specialty societies are deductible.
Membership dues for professional organizations that offer continuing education or networking opportunities can be written off.
Fees for 法人 税金対策 問い合わせ legal and accounting services supporting compliance and financial management are deductible.
Expenses for brochures, business cards, website development, online advertising, and local media 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.
Health insurance premiums paid by a self‑employed practitioner may be deducted as an income adjustment.
Travel costs for continuing education seminars, conferences, or supplier meetings are deductible.
Meals directly tied to business, such as a lunch with a potential collaborator, are 50% deductible.
Keep thorough records to substantiate these costs.
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.
Office consumables such as pens, paper, toner, and other items are deductible.
Software subscriptions, cloud services, and EHR systems are also 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.

Expenses That Are Not Deductible
Identifying what is not deductible is just as vital:
Personal costs—like meals with friends, personal travel, and non‑business hobbies—are not deductible.
Donations to political parties or campaigns are not deductible.
Penalties from the IRS or other regulatory agencies 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.

Tips for Keeping Records
The IRS values thorough records. Here’s how to maintain your books properly:
Separate Accounts: Maintain a dedicated bank account and credit card exclusively for 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, purposes, and amounts.
Depreciation Schedule: Use a spreadsheet or accounting software to track depreciation of large assets.
Annual Reviews: Review all expenses at year‑end against IRS categories to catch any missed deductions.

Strategies for Filing Taxes
Section 179 Deduction: Purchasing qualifying equipment may let you expense the entire cost in the purchase year rather than depreciating over time.
Bonus Depreciation: New tax law enables accelerated depreciation on selected assets, providing a larger early deduction.
Qualified Business Income Deduction: If your practice qualifies, you might reduce taxable income by up to 20%.
Account for COVID‑19 Credits: If you received the CARES Act or other pandemic‑related tax relief, ensure you’re not double‑counting deductions.

Consult a Professional When in Doubt
The tax code constantly evolves. A CPA or tax attorney specializing in medical practices can assist you:
Identify all possible deductions.
Structure your business entity (LLC, S‑corp, etc.) to maximize tax benefits.
Ensure compliance with IRS rules to avoid audits.
Keep you updated on new tax incentives for technology or patient care improvements.

Conclusion
Deductible medical practice expenses aren’t just a way to lower your tax bill—they’re a reflection of what it takes to deliver quality patient care.
Understanding which costs are deductible, maintaining meticulous records, and partnering with a knowledgeable tax professional keeps your practice financially sound while preserving service quality.
Remember: a well‑managed deduction strategy is as vital to your practice’s longevity as the clinical skills you bring to the office.