Tax Planning

Tax Deductible Business Related Expenses for Sole Proprietors

  • Accounting and Tax Preparation Fees
  • Board Fees and Board Review Courses
  • Business Gifts (limited to $25 per gift per person)
  • Cell Phone and Mobile Apps
  • Cleaning/Laundry of Medical Uniforms
  • Computers and Related Supplies
  • Continuing Medical Education
  • Conferences and Conventions
  • Dues to Medical Associations
  • Legal and Professional Fees
  • Malpractice Insurance
  • Medical Books and Journals 
  • Medical Equipment and Supplies
  • Medical License and DEA Fees  
  • Medical Uniforms 
  • Telephone/Fax/Internet Access 
  • Auto Expenses
    • Standard Mileage Rate - 58¢ per business mile for 2019
    • Auto Lease Payments
    • Car Washes & Detailing
    • Gas & Oil
    • Insurance
    • Repairs & Maintenance
    • Registration
    • Tires
  • Meals
    • 50% Deductible when business related
    • 50% Deductible when away on over-night travel
  • Travel
    • At least 24 hours away from home
    • Transportation and lodging expenses related to business are 100% tax deductible

Student Loan Interest Deduction

  • Individuals may deduct up to $2,500 of interest paid in the current year on student loans 
  • Student loan interest is deducted as an Adjustment to Income on Form 1040
  • Voluntary interest payments are tax-deductible
  • Limited to the first 60 months for which interest payments were required
  • Phase-out (Adjusted Gross Income - AGI)
    • Single    Taxpayer $ 65,000 - $80,000
    • Married Taxpayer $135,000 - $165,000

Itemized Deductions include:

  • Medical and dental expenses (subject to 7.5% of AGI limitation)
  • State and local taxes (capped at a combined $10,000 for income, sales, and property taxes)
  • Home mortgage interest (up to $750,000 of mortgage debt incurred to buy or improve a first or second residence)
  • Charitable contributions - cash and non-cash

Adjustments to Income include:

  • Individual Retirement Account (IRA) contributions
  • Student loan interest
  • One-half self-employment tax
  • Self-employed health insurance
  • SEP IRA Contributions

2019 Tax Guide

Record Keeping

  • Set up a filing system
  • Consider using a designated credit card for only business related expenses. Request an annual summary statement each year.
  • Digitize documents whenever possible, i.e. bank and investment statements, credit card statements, etc.
  • Shred documents you don’t need
  • Maintain financial records for seven years
  • Maintain a mileage log or mobile app to keep track of moonlighting activities, business meals and travel, automobile mileage, etc.
  • Meals and Entertainment - document business purpose and relationship of parties for all transactions
  • Consider setting up a separate checking account for business purchases and expenses  

Independent Contractor Status

  • No taxes are withheld by employer
  • Net income is subject to self-employment tax of 15.3%
  • Contractor may be required to make quarterly estimated tax payments:
    • 1st Quarter - April 15, 2019
    • 2nd Quarter - June 17, 2019
    • 3rd Quarter - September 16, 2019
    • 4th Quarter - January 15, 2020

Coverdell Education Savings Accounts

  • Maximum $2,000 per year contribution per child
  • Contributions are not tax-deductible
  • Account growth is tax-free
  • Account must be used for higher education purposes by age 30
  • Phase-out (Adjusted Gross Income - AGI)

    • Single    Taxpayer $  95,000 - $110,000
    • Married  Taxpayer $190,000 - $220,000

Limitations and restrictions apply. Tax rules are subject to change. This is for informational purposes only. Individual situations will vary. Please speak with a qualified tax advisor for information specific to your situation.