tax strategies for chiropractorsLike it or not, when you own a chiropractic practice, you’ve got to stay of top of daily business operations. And since this is the time of year when both expenses and taxes are in the forefront of our minds, we’ve decided to center this article around tax strategies.

Tax write-offs are key to reducing the amount of income tax you’ll pay. So we have compiled 7 simple tax-saving strategies for you to consider.

1) Your Location’s Rent – For most chiropractors, their monthly property lease payment is a major expense. Fortunately, rent expenses can be deducted, as can other terms of a lease, like property taxes. Some business owners choose to make their January rent payments in December. If your chiropractic practice is using a cash basis, then it will be deducted with the current year. However, if your chiropractic business uses accrual accounting, it needs to be capitalized.

2) Business Equipment Repairs – You can deduct the cost of repairing business property or equipment, but you must distinguish between a “repair” and a capital item. To clarify, let’s look at an example. If you were to service your business’ air conditioner, it would be categorized as a repair, but if you were to buy an entirely new air conditioning unit, it would be considered a capital expense.

3) Business Travel – Many doctors must travel to attend seminars. If you’ve found yourself in this situation, you can deduct your airfare (of course, this allowance is excluded if you’ve used frequent flier miles to buy an airline ticket). You can also deduct the shuttle or taxi ride from the airport to hotel, lodging and meals (drinks, food tax and tip) Other things you can deduct during the trip include the cost of laundry, tips for drivers and bellhops, the cost of receiving a fax, and computer or cell phone rental.

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4) Business Gifts – For those  who like to thank the doctors and lawyers who send business their way, the tax codes allow for deductions of up to $25 per person per year. If your costs exceed this amount you must remember that only the $25 is deductible, the balance is not. Also note that the tax rules for “gifts” are different from those for “entertainment”. If you give someone a $25.00 restaurant gift certificate — it is deductible. However if you mistakenly code the gift certificate as “entertainment” it could be subject to the 50% rule, which would limit your total deduction to $12.50.

Note: You must keep all gift receipts, along with notes that detail the date of purchase, the recipient, the purpose and any other important facts. Since many receipts are printed on thermal paper you may want to copy or scan the receipts to prevent fading.

5) Chiropractic Marketing –  Many of your chiropractic marketing expenses can be deducted. Tally up your costs for newspaper ads, yellow page advertising, pay per click ads, website design and maintenance, and event fees. Don’t forget smaller expenses like business cards and printed advertising pieces, like brochures and exercise handouts.

6) Miscellaneous Small Expenses – Sometimes very small expenses tend to slip our minds, but over the course of a year they can really add up. Here are a few to consider:

Banking and Merchant Account Fees – Merchant account service fees and Pay Pal fees are both deductible. So are monthly bank fees, ATM charges, and online banking costs.

Professional Subscription and Dues – Dues for professional, business or civic organizations are deductible. If you are a member of American Chiropractic Association, Chamber of Commerce or the Better Business Bureau, these dues can be written off. Business and professional publication subscriptions can also be deducted.
Legal and Professional Fees – Accounting and tax preparation, along with legal and appraisal fees, are deductible.

Office Maintenance and Expenses – Cleaning and janitorial services can be deducted. Magazine subscriptions, flowers and plants, bottled water and other beverages and snacks are also deductible. General office supplies, like paper, pens, and postage, are also included in this list.

7) Incorporate Your Practice – For even more tax savings, consider incorporating your chiropractic practice. Depending upon the laws of your state, you may be able to establish yourself as a Professional Corporation. This designation is a specific type of corporation for business professionals,like architects, doctors, accountanta, and lawyers. Whether you choose to set up your business as a professional corporation, an LLC or an S Corp — you may find a corporation will provide both additional tax and liability protection.

We certainly don’t claim to be CPAs, so this article only offers basic guidelines. Be sure to review any of these recommendations with your business accountant to be sure you are in compliance with current tax laws. You may also find industry specific information about tax write-offs by visiting the IRS.gov Small Business website.

For more ways to create more profit in your chiropractic practice, return to our home page and click on a marketing strategy.

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