Tax Writeoffs: Can NPs Deduct Licensure, Certification, and CME Costs?

It's all about what you can get back when it comes to filing your taxes. Deductions are a fine line and you certainly don't want to raise any red flags with the IRS. But, you do deserve a fair assessment when it comes to what you owe Uncle Sam (or he owes you!). Many expenses nurse practitioners incur throughout the year may be written off when you file your taxes. What's legitimate and what's not?

In general, when it comes to deducting business-related expenses, the IRS uses the "ordinary and necessary" rule. Is the expense considered common and accepted in the nurse practitioner profession? The expense doesn't need to be indispensable to your ability to practice but rather one that is considered "appropriate". Hiring a pilot to shuttle you directly to your hospital's helipad every day for work, for example, wouldn't be considered "ordinary" or "appropriate". Additionally, if your employer reimburses you for work-related expenses, you can't write them off on your taxes. 

Licensure and Certification Fees

As long as your employer does not reimburse you for the cost of your nurse practitioner licensure and certification you can deduct these expenses. There are a few conditions to this write off. Unreimbursed work-related expenses are considered "miscellaneous 2 pecent expenses". To deduct these expenses, their sum must exceed 2 percent of your adjusted gross income before you can write them off. If, for example, your adjusted gross income is $100,000, your unreimbursed work-related expenses must amount to more than $2,000 to claim the deduction. 

Continuing Medical Education Course Costs

Registration or enrollment fees required to attend CME courses may also be written off provided that these expenses are not reimbursed by your employer. These costs, like all others in this list, fall under the "miscellaneous 2 percent rule". 

Continuing Medical Education Travel and Lodging

If you're jet setting for your next CME conference, you're in luck. You can write off travel and lodging as well as 50% of the cost of your meals. Just make sure your travel expenses are legitimately incurred on professional development. A one-day CME course in Cancun followed by a six-day scuba diving excursion doesn't count. Remember the "ordinary and necessary" rule. 

If your event is local, you may still deduct the cost of travel to and from your CME conference. This year, the IRS allows a write off of 56 cents per mile.

Miscellaneous Practice Expenses

Other expenses you incur in your daily practice as a nurse practitioner may be deductible. If you take call, for example, you may be able to write-off your cell phone bill. Medical supplies such as a stethoscope or otoscope purchase may be deducted as well. Be careful with miscellaneous expenses. Some items like deducting your home internet costs may raise a red flag with the IRS. It's advisable to talk with a CPA when it comes to miscellaneous write-offs. 

Don't forget to save your receipts so you can legitimize your work-related deductions should the need arise!

 

You Might Also Like: Tax Implications of Your Nurse Practitioner Job Offer