Deducting Cost of Boards

[periopdoc]

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Thinking about deducting the cost of anesthesia oral boards this year. When I took them, I was moonlighting in a job that did not require board certification so this is not an expense that was required to do my job, it was an expense that improved my skills.

What do you think.

I am definitely deducting all expenses associated with TEE certification since it wasn't required for my current job when I signed the contract. Too bad I can't deduct lost wages do to pursuit of TEE training.

- pod

 

[sevoflurane]

Not sure about W-2's, but for 1099 you can definitely have it as a deduction as it is a business expense.

 

[jwk]

Thinking about deducting the cost of anesthesia oral boards this year. When I took them, I was moonlighting in a job that did not require board certification so this is not an expense that was required to do my job, it was an expense that improved my skills.

What do you think.

I am definitely deducting all expenses associated with TEE certification since it wasn't required for my current job when I signed the contract. Too bad I can't deduct lost wages do to pursuit of TEE training.

- pod

Those are perfectly legitimate costs of business, and would be deductible. How you deduct them is the key.

I can't speak to the ins and outs of LLC's and partnership income taxes, but if your income is via a 1099 and you're using Schedule C, you simply deduct them along with your other business expenses. You're only taxed on the net profit after expenses, not the gross income beforehand. Your expenses are taken right off the top. If you have $100,000 in 1099 income and $5,000 in business expenses, your profit (taxable income) is now down to $95,000.

Trying to deduct them if you're a W-2 employee only is the least desirable. Your business-related expenses in that case are deductible, but only to the extent they exceed more than 2% of your adjustable gross income. So let's say you have an AGI of $100,000, and $5,000 in business expenses. 2% of your AGI is $2,000, so that means only $3000 of it is deductible AND it's taken on Schedule B along with your other itemized deductions. Even worse, if you didn't have enough itemized deductions to even exceed the standard deduction, those business expenses might end up not really being deductible at all.

I'm lucky enough to have both 1099 income from moonlighting along with my W2 income from my regular employer. That means that any of my employment related expenses (licensing, certification, education meetings and associated travel and meals, etc.) are all deductible right off the top of my 1099 income. If I only make $2000 in 1099 income, and have $5000 in expenses, I can legitimately show a $3000 loss, which reduces my AGI. It's one of the biggest perks of having 1099 income sources instead of all W-2.

 

[pgg]

Those are perfectly legitimate costs of business, and would be deductible. How you deduct them is the key.

I can't speak to the ins and outs of LLC's and partnership income taxes, but if your income is via a 1099 and you're using Schedule C, you simply deduct them along with your other business expenses. You're only taxed on the net profit after expenses, not the gross income beforehand. Your expenses are taken right off the top. If you have $100,000 in 1099 income and $5,000 in business expenses, your profit (taxable income) is now down to $95,000.

Trying to deduct them if you're a W-2 employee only is the least desirable. Your business-related expenses in that case are deductible, but only to the extent they exceed more than 2% of your adjustable gross income. So let's say you have an AGI of $100,000, and $5,000 in business expenses. 2% of your AGI is $2,000, so that means only $3000 of it is deductible AND it's taken on Schedule B along with your other itemized deductions. Even worse, if you didn't have enough itemized deductions to even exceed the standard deduction, those business expenses might end up not really being deductible at all.

I'm lucky enough to have both 1099 income from moonlighting along with my W2 income from my regular employer. That means that any of my employment related expenses (licensing, certification, education meetings and associated travel and meals, etc.) are all deductible right off the top of my 1099 income. If I only make $2000 in 1099 income, and have $5000 in expenses, I can legitimately show a $3000 loss, which reduces my AGI. It's one of the biggest perks of having 1099 income sources instead of all W-2.

Yes, exactly this.

I get a W2 from my day job, and 1099 from moonlighting. I chop all of my professional expenses off the 1099 pay. Most of my oral board costs were covered by the Navy, but I'm claiming everything that wasn't. ASA dues, malpractice insurance, CME costs, disability ins, that stethoscope I bought to replace the one someone ripped out of the OR, my extra-long scrubs, everything I bought related to my job or profession goes on the 1099 side.

 

[periopdoc]

Sweet. That's what I thought. I was 1099 for moonlighting, W2 for the first year of this gig, then I go to K-1 which I haven't looked into yet.

Of course, if a condition of your being hired to that 1099 job is that you ultimately become certified before X number of years expires, then the cost of the boards is not deductible. If they add it as a requirement for retaining the job after you have already signed the contract then it is deductible.

- pod

 

[kmurp]

We are a. C corp and so we tend to make all of these things a benefit paid by the corporation and therefore pre-tax. This works well as long as everyone generally wants the same benefits. In general, we do: Asa membership, health, cme etc. At times though, some may wish more of these things than others and there can be disagreement as to what to allow.
I sometimes wonder about reorganization to allow members this flexibility.

 

[hoyden]

You can deduct, but having to pay AMT anyway is not going to help much...

 

[urge]

Wow, many of you seem to moonlight. Im interested in moonlighting but with a full time job with calls and 4 weeks of vacation it is hard. How do you guys do it? Vacation time? Weekends? Im thinking bout 1 saturday a month, but cannot find anyone looking for that.

 

[periopdoc]

I moonlighted during fellowship (theoretically speaking of course) 😎 1 weekend per month. It was in house Sat 7am to Mon 7am then I would run to the big house to start my weeklong call shift there. It led to some long weeks, but it was worth it financially.

I could do it now if I were to work on the weekend before my vacation, but at my current tax rate it isn't really worth it.

I am lucky enough to have a bit more vacation than that so it wouldn't hurt so bad to lose a bit.

- pod

 

[pgg]

Wow, many of you seem to moonlight. Im interested in moonlighting but with a full time job with calls and 4 weeks of vacation it is hard. How do you guys do it? Vacation time? Weekends? Im thinking bout 1 saturday a month, but cannot find anyone looking for that.

I moonlight from my military hospital, which unpredictably ranges from about 30 hrs/week to 90 hrs/week with q2 call, depending on which ship got back from deployment ~9 months ago, who's on leave, who's deployed, or who's in jail at any given moment.

I live about 3/4 of a mile from a civilian hospital that desperately needs anesthesiologists, so I can fit a few hours here and there in pretty easily whenever I'm available.