Moonlighting deductions

[MSooner]

My husband started moonlighting this year and I'm trying to figure out what he can deduct. He is paid on a W-2 for his residency income (of course) and 1099-MISC for the moonlighting income.

 

I'm planning on deducting the cost of the full medical license against the moonlighting income because he got it solely for moonlighting. What I'm wondering about are these two other items:

 

• Reimbursed (by residency program) book fees for books he bought to supplement his residency training


• Here's the tough one--American Board of Radiology membership fees? Radiology residents are required to pay $650 a year to be in good standing with the ABR in order to sit for the boards PGY-4. His moonlighting doesn't require him to be Board Certified, but it is radiology-specific (as in they only hire radiologists and radiology residents to do this work)

Thoughts?

[jfoxcpacfp]

1. If he was reimbursed, there is nothing to deduct, is there? What am I missing?


2. I would prorate, whatever amount you feel comfortable with. There are no hard and fast rules on this one.

[chrisg202]

For a 1099 income, you can deduct:

Car: mileage, oil change

Cell: % of your data bill

Home office: if any, including % of internet bill used if any

Fee: tax preparation fee, registration, licensing

Meals: if you bought any meals during your shifts (you don't need receipts for meals <$75)

Laundry and dry clean for your uniforms: if any

 

that's what i can think of

[childay]

You cannot deduct the initial medical license fee

 

https://www.irs.gov/publications/p529/ar02.html#en_US_publink100027003

 

[DMFA]

childay wrote:

You cannot deduct the initial medical license fee

 

https://www.irs.gov/publications/p529/ar02.html#en_US_publink100027003

 

Click to expand...

This is true.  But what is "initial licensing" anyway?  Are in-training permits licenses?  Could you deduct one but not another?  I wouldn't deduct the initial *full* medical license since I'm pretty sure that's what they're getting at.

Board fees are deductible, at least the portion of them that isn't used for any political endeavors.  I think since it's a regulatory board and not a professional advocacy organization, it should be completely deductible.

Mileage is only deductible *between* workplaces, not including home.

[MSooner]

jfoxcpacfp wrote:

1. If he was reimbursed, there is nothing to deduct, is there? What am I missing?


2. I would prorate, whatever amount you feel comfortable with. There are no hard and fast rules on this one.

Click to expand...

That's why item #1 is confusing me. We did get a separate W-2 for the amount of the book reimbursement, though, so it is taxable income.

Then there is this from IRS form 970

"Unclaimed reimbursement.   If you don't claim reimbursement that you are entitled to receive from your employer, you can't deduct the expenses that apply to that unclaimed reimbursement."

It's probably small potatoes in the grand scheme of things anyway, though.

[MSooner]

DMFA wrote:

childay wrote:

You cannot deduct the initial medical license fee

 

https://www.irs.gov/publications/p529/ar02.html#en_US_publink100027003

 

Click to expand…

This is true.  But what is “initial licensing” anyway?  Are in-training permits licenses?  Could you deduct one but not another?  I wouldn’t deduct the initial *full* medical license since I’m pretty sure that’s what they’re getting at.

Board fees are deductible, at least the portion of them that isn’t used for any political endeavors.  I think since it’s a regulatory board and not a professional advocacy organization, it should be completely deductible.

Mileage is only deductible *between* workplaces, not including home.

Click to expand...

Argh, true. I guess next year we could definitely deduct the license renewal fee, but I'm not sure on whether or not he can deduct the cost of the initial licensure now. It was an additional license in addition to his training license that he only got to moonlight, but I see how this is a real gray area. This one isn't small potatoes--************************ Texas. :/

 

I hate tax time.

[childay]

DMFA wrote:

childay wrote:

You cannot deduct the initial medical license fee

 

https://www.irs.gov/publications/p529/ar02.html#en_US_publink100027003

 

Click to expand…

This is true.  But what is “initial licensing” anyway?  Are in-training permits licenses?  Could you deduct one but not another?  I wouldn’t deduct the initial *full* medical license since I’m pretty sure that’s what they’re getting at.

Board fees are deductible, at least the portion of them that isn’t used for any political endeavors.  I think since it’s a regulatory board and not a professional advocacy organization, it should be completely deductible.

Mileage is only deductible *between* workplaces, not including home.

Click to expand...

Professional Accreditation Fees

 You can't deduct professional accreditation fees such as the following.

• Accounting certificate fees paid for the initial right to practice accounting.


• Bar exam fees and incidental expenses in securing initial admission to the bar.


• Medical and dental license fees paid to get initial licensing.

 

You can't deduct expenses you have for education, even though one or both of the preceding tests are met, if the education:

• Is needed to meet the minimum educational requirements to qualify you in your trade or business, or


• Is part of a program of study that will lead to qualifying you in a new trade or business.

 

I would say neither license/permit fees are deductible, neither things like the STEP exams.  Not a CPA of course.  Agree board fees are okay.

 

[DMFA]

MSooner wrote:

jfoxcpacfp wrote:

1. If he was reimbursed, there is nothing to deduct, is there? What am I missing?


2. I would prorate, whatever amount you feel comfortable with. There are no hard and fast rules on this one.

Click to expand…

That’s why item #1 is confusing me. We did get a separate W-2 for the amount of the book reimbursement, though, so it is taxable income.

Then there is this from IRS form 970

“Unclaimed reimbursement.   If you don’t claim reimbursement that you are entitled to receive from your employer, you can’t deduct the expenses that apply to that unclaimed reimbursement.”

It’s probably small potatoes in the grand scheme of things anyway, though.

Click to expand...

Why would you not claim reimbursement and rather claim a tax deduction?  Would you rather have a full amount, or 25% of an amount?

[spiritrider]

chrisg202 wrote:

For a 1099 income, you can deduct:

Car: mileage, oil change

Meals: if you bought any meals during your shifts (you don’t need receipts for meals <$75)

 

You can either deduct mileage or actual costs not some of each. Also, you can not deduct commuting mileage only the extra mileage to/from the moonlighting location.

You can only deduct your own meals that are part of business travel when you travel overnight.

[csbest]

I’m a Physical Medicine & Rehabilitation physician. I occasionally do some 1099 medicolegal work (deposition, testimony, etc). Seeing as these settings require me to dress in a suit, can dress clothes be claimed as a business deduction? Thought it might be a bit of a stretch but figured I’d ask. Thanks!

[CordMcNally]

csbest wrote:

I’m a Physical Medicine & Rehabilitation physician. I occasionally do some 1099 medicolegal work (deposition, testimony, etc). Seeing as these settings require me to dress in a suit, can dress clothes be claimed as a business deduction? Thought it might be a bit of a stretch but figured I’d ask. Thanks!

Click to expand...

*Deleted since it contained incorrect information.*

[spiritrider]

The above is not correct. A business expense for clothing is all or nothing.

It must be necessary/required to accomplish the bussiness tasks and not suitable to wear in the rest of your life.

Uniforms, scrubs and white coats for physicians, yes. A suit or any other professional attire, never for anyone.

[Dreamgiver]

One more thing to think about...in many states the initial medical license is the one you get as an intern, usually paid for by the residency program. It seems to me that any license renewal after that would be deductible. Boards have nothing to do with state licensure so those are tax deductible any time you have the expense, along with DEA fees

[ACN]

With the standard deduction of 24k now, I find that 99% of married residents will never reach that threshold with itemized deductions.

During my fellowship interview year with 10+ cross country trips and boards, I reached 20k in deductions,so this new tax law makes it so much easier.