Tax Issues for Medical Professionals
Should I Incorporate My Business? Ask us.
Income Splitting with Spouse/Family Members for Medical Professionals
New rules have resulted in a significant reduction in physicians incorporating for income splitting purposes. Inquire with us about how to pay family members through the corporation.
Meals and Entertainment Expenses for Medical Professionals
The Income Tax Act allows for a deduction of 50% of meals and entertainment expenditures from professional or business income. This includes:
- Meals with colleagues to review treatment techniques
- Meals purchased by a doctor for their interns
- Occasional entertainment expenses with partners
Vehicle Expenses for Medical Professionals
Should you buy or lease the vehicle? Ask us. hould the vehicle be registered under the corporation or personal name? Ask us. Vehicle expenses for business-related travel can be claimed with two methods. The first method is the simplified method. The vehicle expense is calculated based on the number of kilometres driven for business purposes. The second method is based on actual vehicle expenses incurred. This includes:
- Fuel and oil
- Toll changes
- Lease payments
- Depreciation on the cost of the vehicle
A log of business travel should be kept.
Business deductions and credits for Medical Professionals
- Convention expenses (for tax purposes, you are generally allowed to deduct two conventions per year)
- Annual medical licence fees and certain professional dues
- Professional development
- Capital cost allowance on specific capital expenditures (e.g., medical equipment
or leasehold improvements on your office)
- Consider applying for Scientific Research & Experimental Development (SR&ED) Tax Credits
GST/HST for Medical Professionals
Some medical services such as massage therapy and psychotherapy are GST taxable supplies. Therefore, you may need to register and collect GST/HST. Although some medical services are GST/HST exempt, some physicians may have to register for GST/HST if non-medical services are provided, such as reports to insurance companies, court opinions and presentations/speeches.
Accounting Issues for Medical Professionals
- Does your MPC have investments and want to reduce the tax? Contact us for tax planning solutions.
- Some medical practices share the small business deduction between partners. Contact us on how to mitigate this.
- Invest in life insurance
- Foreign income verification
- Receive tax free dividend CDA
- Comply with CPSO renewal, our office provides CPSO renewal services.
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