NonTradHopeful

7+ Year Member
Jan 13, 2010
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Pre-Dental
...are your student loan payments deductible from your business expenses if you own a practice?

For example, say you graduate from d-school with $200k in debt, then you work as an associate for a couple years. After associateship, you open your own practice. Can your monthly student loan payments be deducted as business expenses from your practice, even though you took out the loans before you opened the practice? I ask because, even though you took the loan out before opening the practice, you are still incurring the expenses (monthly payments) now.

The thought just occured to me, and I was curious about it, but couldn't find much with an internet search...

Thanks in advance, guys!
 

DrJeff

Senior Member
Moderator Emeritus
15+ Year Member
Nov 30, 2000
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Dentist
...are your student loan payments deductible from your business expenses if you own a practice?

For example, say you graduate from d-school with $200k in debt, then you work as an associate for a couple years. After associateship, you open your own practice. Can your monthly student loan payments be deducted as business expenses from your practice, even though you took out the loans before you opened the practice? I ask because, even though you took the loan out before opening the practice, you are still incurring the expenses (monthly payments) now.

The thought just occured to me, and I was curious about it, but couldn't find much with an internet search...

Thanks in advance, guys!
Short LEGAL answer is no

Could you theoretically funnel it through your practice, probably, but if the IRS comes a calling, you'd likely have some issues (especially if you don't have Federal Qualified Health Center Status) :eek:

The other fun thing about your loans and deductability from your taxes, is that for a large percentage of dentists with school loans, you'll quickly loose the ability to deduct the interest from them off your taxes as your income will likely exceed the maximum threshold that the IRS allows for interest deductability (kind of a bad/good thing - bad because you loose the deduction, but good because it's do to you making a bunch of $$ )
 

NonTradHopeful

7+ Year Member
Jan 13, 2010
270
1
141
Status
Pre-Dental
Short LEGAL answer is no

Could you theoretically funnel it through your practice, probably, but if the IRS comes a calling, you'd likely have some issues (especially if you don't have Federal Qualified Health Center Status) :eek:

The other fun thing about your loans and deductability from your taxes, is that for a large percentage of dentists with school loans, you'll quickly loose the ability to deduct the interest from them off your taxes as your income will likely exceed the maximum threshold that the IRS allows for interest deductability (kind of a bad/good thing - bad because you loose the deduction, but good because it's do to you making a bunch of $$ )

Thanks for the info, Dr. Jeff. I find it interesting that we can't do that, since many corporate jobs in the early 90's offered loan repayment as an employment benefit...and those companies just write those off as an employee expense. I guess I thought that benefit would extend to people who own their own business as well, but I guess I was wrong.

Gotta love the tax man...