If you’re a chiropractic clinic owner, one thing that you need to deal with every year is tax preparation. For this, you have to figure out which expenses you can claim. Keep in mind that your expenses will be considered as either “allowable” or “non-allowable.” To be more specific, your expenses are allowable when they are exclusively used for business reasons. Having said that, there are some expenses that are used for both business and personal purposes that fall under the “duality” principle. To make sure that you know which expenses can be claimed for tax relief, you should seek advice from your accountant.
Keep reading to find out about some of the expenses that chiropractors can claim for tax deductions!
Any bank charges incurred on your business account are allowable for tax relief. However, any fees that result from late payments are disallowable. Bank Interest
Bank interest that is funding your business is allowable for tax relief. However, when the business capital account is overdrawn, a certain amount of the interest may not be allowable for tax relief.
Business rates are allowable for tax relief only if your clinic is solely used for business purposes. Clinic Rent
Clinic rent is considered as “Cost of Sale,” which refers to a cost necessary to generate income. In this case, clinic rent is allowable for tax relief. If you’re an associate chiropractor who gets a net income after deducting the clinic rent, you have to report your income as is. Thus, the best course of action for you would be to make a payment using your own money for the rent so that you can declare your income and rent as separate expenses for tax relief.
Clinic or Medical Supplies
Chiropractic clinic and medical supplies, such as head rolls, heel supports, and vitamins, are also considered as “Cost of Sale.” This means that they are allowable for tax relief. Chiropractic Apparel
The only clothing items that are allowable for tax relief are the clinic jackets that every chiropractor has to wear during their working hours. Because clinic jackets are used for business purposes, they are allowable for tax relief. Personal clothes that are worn even in the clinic are expenses that are disallowable for tax relief as they are not exclusively used in the clinic.
The only type of entertainment that is allowable for tax relief is employee entertainment, such as Christmas parties or other company events. For example, if a business meeting with colleagues is held at a restaurant, then the expense is not allowable. However, if a business lunch is held at the clinic and is available to every employee, then the expense is allowable.
Repairs that are done to your clinic are allowable expenses. That being said, there is a fine line between repairs and property improvements, in which there are guidelines for each specific work. For example, if the work is deemed a refurbishment rather than a repair, then expenses incurred are disallowable for tax relief. This is why you should always consult with your accountant to make sure that the specific work that you’re planning to do is allowable for tax relief.
The fees of attending chiropractic seminars are allowable for tax relief, including the registration fees and other costs related to attending the event. These costs may include transportation, accommodation, and other expenses. However, if an expense is considered as being under the “duality” concept, where it can be deemed as part personal and part business. For example, by combining a company trip with a seminar, the expenses are disallowable for tax relief.
All travel expenses relating to business reasons are allowable for tax relief. For example, taxi fees to the seminar are allowable while travel expenses to and from work on a daily basis are not allowable.
As long as the tasks carried out by your staff are relating to your chiropractic business, all of the wages that you pay are considered allowable expenses.
The Peloton provides accounting & bookkeeping services for chiropractors across Cornwall.
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