Tax deductions as fellow

[bkell101]

Hey guys,

Ive search some other threads and am finding conflicting answers. Online as well.

Fellowship year is filled with expenses....which are deductible?

1. PTE Masters
2. Oral Board prep
2. Oral Boards
3. Echo Boards
4. SCA registration fee and trip expenses
5. Initial State Full license
6. Renewal state full license
7. DEA registration
8. State controlled substance

Thousands of dollars (fellowship allowance won't touch half of this). I figure submit reimbursement from my fellowship program for the ones that are not deductible. Thanks!

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[pgg]

All of it.

And possibly much more ...

http://whitecoatinvestor.com/the-out-of-state-fellowship-tax-deduction/

 

[bkell101]

http://www.mdtaxes.com/mdbusexp.html -

Deductible: "Expenses incurred that are required as part of your employment and maintain or improve your skills in your current profession."

Not Deductible: "Expenses incurred that prepare or qualify you for a new trade or business, such as medical or dental school"

I think some people are making the argument that USMLE prep and step exams are required to be a Doctor, but additional training in a subspecialty of anesthesia are not required and are just improving your skills (you could be a doctor without this).

 

[bkell101]

All of it.

And possibly much more ...

http://whitecoatinvestor.com/the-out-of-state-fellowship-tax-deduction/

Thanks! Read this article (love his book btw)....so I could take all of those deductions in the article if I did residency in Illinois and then fellowship in Ohio? But what if I do residency in Illinois and stay for fellowship in Illinois? Can I still deduct all of that?

 

[bkell101]

Also, if you read the bottom comments many people disagree with the article and it's interpretation of the IRS tax code.

 

[bkell101]

All of it.

And possibly much more ...

http://whitecoatinvestor.com/the-out-of-state-fellowship-tax-deduction/

Seems like you have some experience with this, just read your post from back in 2005! lol

 

[pgg]

Thanks! Read this article (love his book btw)....so I could take all of those deductions in the article if I did residency in Illinois and then fellowship in Ohio? But what if I do residency in Illinois and stay for fellowship in Illinois? Can I still deduct all of that?

I'd talk to a tax specialist before getting this aggressive.

The "temporary work assignment" deductions probably don't apply to most fellows who move from residency at location A, to a new location B for 1 year and become employees of the new institution (their tax home has moved too).

For some people, e.g. those who practice for a period of time, leave for fellowship for a year with the intent of returning to their same position afterwards, it may be easier to make the temporary work assignment argument. There's enough gray in the wording that I think a fair number of people could reasonably in good faith claim it.

I am a fellow this year and am taking this deduction, but I'm not typical:
1) I am maintaining a household in location A in one state while a fellow for 1 year at location B in another state.
2) My employer (the US gov) isn't changing; the institution in location B isn't paying me. My tax home stays the same.
3) I am frequently returning to location A on weekends, and have even arranged to do some token work for my previous institution there.
4) I fully expect to return to location A after fellowship.

So, nothing gray about my situation, but it's a massive deduction and maybe worth pushing the envelope for some other people.

 

[psychbender]

If it is related to your job, deduct it. My tax situation is a little unnecessarily complex (military, my wife and I are residents of two different states, I moonlight a bit locally), so I have a CPA here take care of my final tax forms. To help him out, I keep an Excell spreadsheet with all of my deductions. After speaking with him, I include every single cost of being a physician (professional membership fees, license fees, CME, review courses), along with fees associated with fellowship applications and travel (airfare, hotel, etc). Also, since all of my communication at work us via my cell phone, he told me to include my cell phone bill.

I don't legitimately have a home office, so I don't use that common deduction, but I think most of my deductions represent common practice among physicians.

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[Mman]

Hey guys,

Ive search some other threads and am finding conflicting answers. Online as well.

Fellowship year is filled with expenses....which are deductible?

1. PTE Masters
2. Oral Board prep
2. Oral Boards
3. Echo Boards
4. SCA registration fee and trip expenses
5. Initial State Full license
6. Renewal state full license
7. DEA registration
8. State controlled substance

Thousands of dollars (fellowship allowance won't touch half of this). I figure submit reimbursement from my fellowship program for the ones that are not deductible. Thanks!

spend a couple hundred bucks on a CPA that has experience working with residents/fellows in your area and you will get the real answer and their experience and if you ever get audited on it, the CPA will be a part of your defense.

 

[ZzzPlz]

My cpa wouldn't let me deduct jack **** because total deductions were less than 5% of my income. Isn't that a factor for you guys?

 

[psychbender]

My cpa wouldn't let me deduct jack **** because total deductions were less than 5% of my income. Isn't that a factor for you guys?

I have both W2 and 1099 income, so I can deduct straight from my 1099 without worrying about the 5% rule. Also, the military pays me less than most of you pay your CRNAs, so even if I did not have the 1099 income and had to abide by the 5% AGI rule, I could still deduct some of these expenses.

 

[Mman]

My cpa wouldn't let me deduct jack **** because total deductions were less than 5% of my income. Isn't that a factor for you guys?

It's a question of how itemizing all your deductions compares to taking a standard deduction. If you have enough deductions for large enough amount of money it can be worth it. If you don't, it might not be worth it. That's why I'd ask an actual CPA because they know they law and will work to figure out what is best for you.

 

[NRAI2001]

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