By profession / Physician in private practice

2026 tax year

Physician in private practice taxes and deductions

The 20% deduction for business profit does not survive at a consultant's income. Medicine is one of the trades where it phases out above a threshold and then disappears, which is why practice owners talk about entity structure far more than other business owners do.

Medical equipment is Section 179 property and a practice fit-out can be written off far faster than most owners expect, including a cost segregation study on a building you own. Malpractice cover is deductible in the year you pay it, and a tail policy bought when you leave a practice is deductible too. Staff are employees rather than contractors in almost every case, a nurse working your hours in your rooms with your equipment is not a contractor whatever the agreement says.

The deductions with a rule attached

These are the lines where the answer is not simply "keep the receipt"each has a cap, a percentage or a test that decides how much of the spend you actually get:

Office rent, or the home office
Two methods. Simplified is $5 a square foot to a ceiling of 300 feet, $1,500, no records beyond the measurement, and no depreciation recapture when you sell the house. Actual apportions your rent or mortgage interest, utilities, insurance and repairs by floor area, usually gives more, and does bring recapture. Either way: space must be used regularly and exclusively for business. home office must be principal place of business.
Continuing professional education
Hours required to keep a license you already hold are the clearest case there is. Spending on continuing professional education to stay current is deductible; the training that qualified you to start is not. The test is about where you are, not what the course teaches, which is why the identical enrollment fee can be deductible for you and not for the person sitting beside you.

The rest of the physician in private practice deduction list

Ordinary and necessary business expenses, deductible in full in the year you pay them, provided they are genuinely for the business:

Worth knowing

Medicine is a specified service trade, so the qualified business income deduction is withdrawn above an income threshold rather than continuing. That single rule is worth more than most of the equipment on this list.

That is what is specific to this trade. The larger deductions are the universal ones, see the full checklist.

What each deduction is worth to you

On $100,000 of profit with no state income tax, $1,000 deducted saves $305, 30.5%, because it comes off self-employment tax and income tax together:

Net profitSaved per $1,000 deductedEffective
$40,000 $231 23.1%
$100,000 $305 30.5%
$200,000 $297 29.7%

The last row is worth less than the one above it, and that is not a mistake: past the Social Security wage base the self-employment part of the saving drops from 15.3% to 2.9%, and the higher income-tax bracket does not quite make up the difference. A deduction is worth most in the middle.

Add a state income tax and every row rises. The 1099 calculator applies that layer.

Where this comes from

The rules on this page that are specific rather than general are cited below. Follow a link to read the provision itself rather than taking our word for it:

What these words mean

Qualified business income deduction
A federal deduction of up to 20% of the profit from a business you run yourself, taken after your other deductions. It reduces income tax but never self-employment tax.
Section 179
A rule letting you deduct the whole cost of equipment in the year you start using it, instead of spreading it over the years you own it.
Depreciation
Spreading the cost of something long-lasting, a vehicle, a camera, a tractor, across the years you use it, rather than deducting it all at once.
Depreciation recapture
When you sell something you had been depreciating, the tax office takes back part of the benefit by taxing the gain up to the amount you already deducted.
Specified service trade or business
Work where the main asset is the skill or reputation of the people doing it, health, law, accounting, consulting and similar. These lose the qualified business income deduction above an income threshold, where other trades keep it.
Business Income Deduction
Ohio’s state-level break for business owners: the first $250,000 of business profit is exempt from state income tax and the rest is taxed at 3%. It applies to the state return only, never to a city one.

Related

General information about how these deductions work, not tax advice. Whether a particular expense is deductible for you depends on facts this page does not have, check with a tax professional before claiming anything listed here.