Tax questions for independent contractor work

[DoctorWannaBe]

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I am an independent contractor and am trying to figure out my taxes for the year. I usually do my taxes by myself using Turbo Tax, but they are more complicated this year since I am an independent contractor. Can anyone help me figure out if I can deduct the following fees from my taxes? I hate to spend money on an accountant when I have finished my whole tax return on Turbo Tax already, so I'm hoping to get some advice on what other people have done with these potential deductions. I have searched the IRS publications but have not gotten a definitive answer on some of these things. Thanks!

1. Specialty board exam fees (not required for initial licensing as USMLE is, so can I deduct it?)
2. State licensing fees (IRS pub 529 says you cannot deduct "medical and dental license fees paid to get initial licensing," so I'm guessing no)
3. DEA license fees
4. Fees paid to hospital for credentialing
5. COBRA insurance (I want to deduct this as part of the self-employed health insurance deduction on line 29 of form 1040. I don't think COBRA premiums are subsidized, but it is a plan offered by my employer, so does that disqualify me from deducting it on line 29?)
6. Disability insurance premiums (again, as a business expense on schedule C)

 

[southerndoc]

Here's what I did, but whether it's right is another situation. You really should consult with an accountant at least your first few years. This is based on prior advice from my accountant, whom I trust but this is in no way financial/tax advice to you, and you should ask an accountant yourself:

1. No, you can only deduct renewals. You can't deduct the initial certification process (which, unfortunately is more expensive).

2. This was considered a business expense. Does publication 529 say you can't deduct it for personal tax deductions? If you're an independent contractor, the vast majority of your deductions should be business deductions (make sure you have the small business version of TurboTax).

3. Again, also a business deduction for me.

4. Business deduction for me.

5. Couldn't tell you about COBRA insurance.

6. DO NOT DEDUCT DISABILITY INSURANCE. If you need disability, you'll be in a tight squeeze trying to live off disability. If you take deductions now, then you must pay taxes on any disability payments. My accountant told me that you don't pay taxes on disability payments if you didn't take deductions.

 

[EM_Rebuilder]

Do youself a favor and spend the money on a CPA....

I like to think the advice on SDN is sound advice and I respect the poster above and think he is giving good advice... still, at the tax bracket you are (assumebly) at, spend the money for a good CPA!!!!

They may get some other deductions you did not think of and thus essentially pay for themselves; and should you get into an audit situation, they will be there for you.

 

[TexasPhysician]

Here's what I did, but whether it's right is another situation. You really should consult with an accountant at least your first few years. This is based on prior advice from my accountant, whom I trust but this is in no way financial/tax advice to you, and you should ask an accountant yourself:

1. No, you can only deduct renewals. You can't deduct the initial certification process (which, unfortunately is more expensive).

2. This was considered a business expense. Does publication 529 say you can't deduct it for personal tax deductions? If you're an independent contractor, the vast majority of your deductions should be business deductions (make sure you have the small business version of TurboTax).

3. Again, also a business deduction for me.

4. Business deduction for me.

5. Couldn't tell you about COBRA insurance.

6. DO NOT DEDUCT DISABILITY INSURANCE. If you need disability, you'll be in a tight squeeze trying to live off disability. If you take deductions now, then you must pay taxes on any disability payments. My accountant told me that you don't pay taxes on disability payments if you didn't take deductions.

I'm no accountant, but I have done exactly this already. I'm unaware of Cobra as well. Have you considered home office deductions as well?

 

[The White Coat Investor]

1. Specialty board exam fees (not required for initial licensing as USMLE is, so can I deduct it?)
2. State licensing fees (IRS pub 529 says you cannot deduct "medical and dental license fees paid to get initial licensing," so I'm guessing no)
3. DEA license fees
4. Fees paid to hospital for credentialing
5. COBRA insurance (I want to deduct this as part of the self-employed health insurance deduction on line 29 of form 1040. I don't think COBRA premiums are subsidized, but it is a plan offered by my employer, so does that disqualify me from deducting it on line 29?)
6. Disability insurance premiums (again, as a business expense on schedule C)

1) Business expense, deductible
2) I think renewal fees are deductible, but I don't think it is initially.
3) Deductible business expense
4) WTH? Seriously? The hospital CHARGED you to credential? And you paid it? I guess that'd be a business expense. But I'd try to make whoever hired you pay it.
5) Deductible as you note. You're self-employed and you paid for it. The reason you don't deduct it if your employer pays for it is that your employer deducted it.
6) Don't deduct it unless you want to pay taxes on disability benefits.

One last thing. One commenter recommended you see a CPA. While that may or may not be a bad idea, I dislike the blanket advice that no one but a CPA can figure out how taxes work. The same thought process leads people to believe they have to get a lawyer to do a basic will or form a basic LLC and a financial advisor to pick out a few mutual funds. Just as there are plenty of minor ailments that a lay person can take care of at home, there are minor tax issues, law issues, and financial issues that a lay person should be able to take care of.