Whether you qualify for one or all of these chiropractic tax deductions in 2023, the most important thing to remember is that …
Although we’ve not yet reached the deadline for filing your practice’s 2022 taxes, it’s never too early to start preparing for next year’s business chiropractic tax deductions.
By knowing the type of expenses that you will be able to deduct in the 2023 tax year, you’re better able to maximize your practice’s tax position in the months ahead while also securing any required proof of the expense. This reduces the risk that you won’t be able to take the deduction allowed when filing next year’s taxes due to inadequate documentation.
Talking with your accountant is always suggested to ensure that no laws have changed and that you’re maximizing your deductions. In the meantime, here are a few places where you may be able to bolster your practice’s tax savings in 2023.
Does your office need a new roof or have you outgrown your current location and, therefore, are in desperate need of an expansion? Publication 535 of the IRS tax code allows businesses certain deductions for building improvements such as these.
This section of the tax code also enables some deductions for repairs and maintenance, even if they don’t improve the property. Examples include costs incurred from repainting the building’s interior or exterior, sealing window cracks, or even replacing worn-out parts on business equipment.
Chiropractic professionals must carry a variety of insurance policies. Publication 535 enables you to deduct premiums from certain kinds of insurance related to your business.
Insurance premiums that may be deducted include policies purchased to cover your practice from “fire, storm, theft, accident, or similar losses.” Other premiums included in this provision include:
- liability insurance
- malpractice insurance
- workers’ compensation insurance
- medical insurance for yourself and your family (if certain conditions are met)
- medical and/or long-term care insurance for your staff
- life insurance for your staff, as long as you aren’t a beneficiary
- overhead insurance
- business interruption insurance
Chiropractic tax deductions and expenses incurred when traveling to conventions
Chiropractic is not typically a traveling profession, but you might travel throughout the year to attend conventions. These expenses may be deductible under Topic No. 511 of the IRS tax code. To qualify for these chiropractic tax deductions, you may be required to show that your appearance at that event benefits your business or trade in some way.
One of the items that can be expensed under Topic No. 511 is transportation costs. This includes costs paid to get to the event, like an airline ticket, as well as costs that accrue during the event, such as when taking a rideshare from the hotel to the venue. If you drive your own vehicle to the convention, you can deduct the standard mileage rate (which is 65.5 cents per mile in 2023) or actual expenses. You can also deduct car rental expenses, but only the portion of those expenses in which the car was used for business.
Other travel expenses that may be deductible include:
- non-entertainment meals
- dry cleaning/laundry
- anything that must be shipped to the venue in advance
- other necessary business-related expenses
While you can no longer deduct 100% of business-related restaurant meals like in 2021-22, the IRS still allows you to deduct 50% in 2023. This provision is in Publication 463 (2022), which explains that meals that qualify for this deduction include those purchased by you and your staff, but also those provided to a “current or potential business customer, client, consultant, or similar business contact.”
Keep receipts for meals that you have while at an out-of-town workshop, convention, or seminar. Also save receipts for meals shared with your accountant, attorney, or other professional whose advice you rely on for your chiropractic practice. Both taxes and tips can be included in these chiropractic tax deductions but are also only reimbursable at the 50% rate.
Chiropractic tax deductions: proof of an expense is key
Whether you qualify for one or all of these chiropractic tax deductions in 2023, the most important thing to remember is that you must be able to prove the expense that you are deducting. This requires meticulous recordkeeping so you can easily identify the date of the expense, actual cost, and any other information the government requires.
Again, consult with your tax advisor to identify the deductions that are allowed for your specific business type and situation. This helps you take the necessary steps to maximize your deductions during this tax year and beyond.