Frequently Asked Questions
General Medical Professional Tax FAQs
Should I practice as a Sole Trader, Company, or through a Trust?
There is no single perfect structure for every doctor. While operating as a sole trader is straightforward, many medical professionals utilize a company or family trust to improve asset protection and manage tax efficiently. The correct structure depends on your specific risk profile, commercial goals, and family situation.
Do the Personal Services Income (PSI) rules apply to my medical practice?
If your income is generated primarily from your personal clinical skills, PSI rules likely apply, which can restrict certain tax deductions. However, if you meet specific ATO tests, your practice may qualify as a Personal Services Business (PSB), allowing you to operate under standard business taxation rules.
Are all medical services exempt from GST?
No, not all services are GST-free. While most Medicare-billable services required for appropriate patient treatment do not attract GST, other services do. Examples that include GST are cosmetic procedures, medico-legal reports, and specific administrative fees. It is crucial to review your billing codes carefully.
Can I claim my Continuing Medical Education (CME) as a tax deduction?
Yes, you can claim deductions for CME courses, seminars, and medical conferences that directly relate to your current practice. This includes course fees, relevant travel, accommodation, and meals. However, you cannot claim educational expenses designed to train you in a completely new medical specialty.
How does a medical service trust or service entity work?
A service entity provides administration, premises, and nursing staff to your clinical practice for a commercial fee. This separates your clinical risk from your business assets and can facilitate legitimate income distribution to family members, provided all fees charged are strictly at commercial market rates.
Can I claim my vehicle expenses if I travel between hospitals and clinics?
Yes, if you regularly travel between different hospitals, clinics, or aged care facilities during the same working day, those vehicle expenses are deductible. However, standard travel between your home and your primary place of practice is generally considered a private expense and cannot be claimed.