Announcement

Collapse
No announcement yet.

Licensing Exam Fees Tax Deductible?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • AlexxT
    replied
    I agree.  You don't need to be board certified to practice as a specialist, so board certification is more akin to continuing education rather than initial licensing, whereas step exams are indeed initial licensing.

    I believe that the federal trade commission limited some of the power of specialty boards in the late 1970'd, as they considered it to be restraint of trade.  ( ie they didn't like the idea that a group of guys decided that they were specialists and no one else could practice that area of medicine unless they jumped through their hoops, despite the fact that all doctors have a license allowing them to "practice medicine and surgery")  That's when doctors were allowed to advertise as well, despite the ban by medical societies up to that point.

    Leave a comment:


  • Docbeans
    replied
    Johanna, I think I do understand- any CME activity that I do now (that I am already past training and board certification) is deductible because it is not part of the initial process of becoming a doctor or getting licensed to treat. Thank you for the help!

    Leave a comment:


  • jfoxcpacfp
    replied


    You have to pass Steps 1-3 of the USMLE to get your initial license as a doc. You can then operate on brains, see kids, or do colonoscopies. Most docs then decide to become board certified by finishing a residency and taking another test. But these aren’t required to be a licensed, practicing doctor. So the board certification courses and fees should be deductible as they are not for your initial training and licensing.
    Click to expand...


    Yes, I understood that already. But was that what Docbeans' question was about? That was my confusion.

    Leave a comment:


  • The White Coat Investor
    replied




     





    deduct all board related ex 
    Click to expand…


    Agree with WCI.  STEP exams are the “initial licensing”
    Click to expand…


    Please help me understand. The question I thought we were addressing was CME for Docbeans – how do the STEP exams figure in? I don’t want to give inaccurate information, for sure; thx,
    Click to expand...


    You have to pass Steps 1-3 of the USMLE to get your initial license as a doc. You can then operate on brains, see kids, or do colonoscopies. Most docs then decide to become board certified by finishing a residency and taking another test. But these aren't required to be a licensed, practicing doctor. So the board certification courses and fees should be deductible as they are not for your initial training and licensing.

    Leave a comment:


  • jfoxcpacfp
    replied
     





    deduct all board related ex 
    Click to expand…


    Agree with WCI.  STEP exams are the “initial licensing”
    Click to expand...


    Please help me understand. The question I thought we were addressing was CME for Docbeans - how do the STEP exams figure in? I don't want to give inaccurate information, for sure; thx,

    Leave a comment:


  • childay
    replied


    deduct all board related ex
    Click to expand...


    Agree with WCI.  STEP exams are the "initial licensing"

    Leave a comment:


  • shantster
    replied




    My opinion is steps 1, 2, and 3 are not deductible but your board exams and future licenses and DEA registrations are.
    Click to expand...


    Thanks. For some reason my post two nights ago didn't make it on. Since the boards are considered "voluntary" (even listed as such on the site to register for our boards before they take an absurd amount of money), I'm planning to deduct all board related expenses from my schedule C this year.

    Leave a comment:


  • The White Coat Investor
    replied
    My opinion is steps 1, 2, and 3 are not deductible but your board exams and future licenses and DEA registrations are.

    Leave a comment:


  • Docbeans
    replied
    Thanks Johanna... I should have clarified, I meant board prep for recertification  

    Leave a comment:


  • jfoxcpacfp
    replied




    To ask a related q: What kind of CME activities are deductible by an independent contractor as business expense?.. Board Prep material? UpToDate subscription? Professional Organization membership? Journal subscription in one’s own speciality? This education definitely maintains or improves skills needed in our present work.

    Thanks!
    Click to expand...


    All of the above. I expense all CPE (CPA) and CE (CFP and NAPFA). With the exception of Board prep, you could consider all the equivalent of CME. Board prep - you can still practice w/o passing, correct? i.e. you're still a doctor? Deduct.

    Once you are licensed in your profession, unless you are changing careers, education is for the most part deductible. Remember: "ordinary and necessary". If I decided to go back to school for my MBA, it would be fully deductible. (even so, not enough incentive for me to return to school.)

    Leave a comment:


  • Docbeans
    replied
    To ask a related q: What kind of CME activities are deductible by an independent contractor as business expense?.. Board Prep material? UpToDate subscription? Professional Organization membership? Journal subscription in one's own speciality? This education definitely maintains or improves skills needed in our present work.

    Thanks!

    Leave a comment:


  • shantster
    replied




    Could you work as a physician without the oral boards? According to the initial post by  Gas_Doc, it appears you could technically do procedures, but I don’t believe that is enough to get your first job (or open an office?). I apologize for not noting your status as a resident after observing that this thread was begun by a physician.

    IF your expenses meet the above definition (I wouldn’t go so far as to give an opinion without a contractual agreement as your CPA), then the travel would be deductible. You need to make that call and/or discuss with your CPA. I hope that helps.
    Click to expand...


    It's the same situation that Gas_Doc proposed. I am licensed to practice medicine and work as a physician (based all parts of USMLE, completed intern year, obtained my unrestricted license). The oral boards are for the second half of my subspecialty certification boards. We do not have to pass these boards in order to practice as a physician in our specialty. In fact, on the website for the boards, they state that people with certification "voluntarily participate in lifelong learning to keep their skills and knowledge current."

    Leave a comment:


  • jfoxcpacfp
    replied
    Could you work as a physician without the oral boards? According to the initial post by  Gas_Doc, it appears you could technically do procedures, but I don't believe that is enough to get your first job (or open an office?). I apologize for not noting your status as a resident after observing that this thread was begun by a physician.

    IF your expenses meet the above definition (I wouldn't go so far as to give an opinion without a contractual agreement as your CPA), then the travel would be deductible. You need to make that call and/or discuss with your CPA. I hope that helps.

    Leave a comment:


  • shantster
    replied





    How do you differentiate between “new profession” and “business as a doctor?” Does the broad term of “physician” count as my “profession” or does my specialty count as the “profession?”   If the former, I do understand how the expenses to get to intern year/residency would be considered the “new profession” and specialty boards “business as a doctor.” 
    Click to expand…


    The former. Your profession to the “outside world” (which would include the IRS) is being a physician. Your specialty is not a separate profession, at least as defined by tax law.

    Here is the IRS bright line definition:



    Qualifying Work-Related Education





    You can deduct the costs of qualifying work-related education as business expenses. This is education that meets at least one of the following two tests.


    • The education is required by your employer or the law to keep your present salary, status, or job. The required education must serve a bona fide business purpose of your employer.

    • The education maintains or improves skills needed in your present work.



    However, even if the education meets one or both of the above tests, it isn’t qualifying work-related education if it:


    • Is needed to meet the minimum educational requirements of your present trade or business, or

    • Is part of a program of study that will qualify you for a new trade or business.



    You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree.
    Click to expand...


    Thank you for that detailed explanation. I wish I would have waited a few weeks to pay for my boards to get that on this year's taxes when I could deduct it.

    For my oral boards coming up, I will have to spend a bunch of money on airfare, car rental, and hotel as the test is not in a convenient location. Would this be considered "work-related business expense?" I would not be able to take the boards without that travel.

    Thank you!

    Leave a comment:


  • jfoxcpacfp
    replied


    How do you differentiate between “new profession” and “business as a doctor?” Does the broad term of “physician” count as my “profession” or does my specialty count as the “profession?”   If the former, I do understand how the expenses to get to intern year/residency would be considered the “new profession” and specialty boards “business as a doctor.”
    Click to expand...


    The former. Your profession to the "outside world" (which would include the IRS) is being a physician. Your specialty is not a separate profession, at least as defined by tax law.

    Here is the IRS bright line definition:



    Qualifying Work-Related Education





    You can deduct the costs of qualifying work-related education as business expenses. This is education that meets at least one of the following two tests.


    • The education is required by your employer or the law to keep your present salary, status, or job. The required education must serve a bona fide business purpose of your employer.

    • The education maintains or improves skills needed in your present work.



    However, even if the education meets one or both of the above tests, it isn't qualifying work-related education if it:


    • Is needed to meet the minimum educational requirements of your present trade or business, or

    • Is part of a program of study that will qualify you for a new trade or business.



    You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree.

    Leave a comment:

Working...
X