Archive for March 2014

Information on Taxable Items for Medical Doctors

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The medical profession is a specialized field that requires specialized processes, especially concerning taxation and accounting. Aside from the common income tax, there are a few more job-related items and services that are taxable for a practicing M.D. Here are some of them:

  • Supplies. Items necessary for medical practice are taxable, provided that they are not reimbursable by the employer (if individual is not self-employed).
  • Communication. Local phone line service costs are not taxable unless they’re used for official business-related calls.
  • Uniforms. If the individual is required to wear a uniform, both the cost and upkeep can also be considered taxable under specific employer terms. These are taxable if they are either required by the employer, or not adaptable to ordinary street clothes.
  • Continuing education. These are deductible if the employer requires it in order for the individual to keep his job or rate of pay, or if the education maintains/improves the individual’s skill set as a medical professional.
  • Auto travel. Expenses for official business travels are also deductible (this excludes commuting expenses since these are considered personal expenses). Business miles should be documented in a record book, indicating the date, purpose of trip, venue, and odometer reading.

These are just some of the main taxable items and services for a practicing medical professional. Managing expenses and keeping track of these elements can be difficult, which is why specialized accounting help is necessary. 

Tips for a Successful Medical Practice

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People assume that a medical degree guarantees a big income for doctors. In reality though, doctors—like everyone who earns a living—must work hard to earn money.

This is especially true for those who open their own practices. While they enjoy perks like being their own boss and deciding how many patients to see each day, they also don’t have the fixed salary that doctors working in hospitals have.

If you’re planning to open your own practice, you’re probably aware of the challenges mentioned above. To help your business thrive, below are a few tips to consider:

Start as a “Micropractice”
If you open a practice, chances are you’ll be hiring a support staff too. Before doing so, however, ask yourself how many people you really need. Remember, the more employees you have, the more salaries and benefits you have to pay—and the less income you get to take home. Consider starting a Micropractice instead, which operates with a bare-minimum staff to reduce overhead costs.

Brand Yourself
It’s unlikely that you’re the only medical practice in your town or city. Therefore, decide what’s different about your practice and market your unique selling point to prospective clients.

Keep Your Books in Order
Keeping your financial records tight is vital to tracking how profitable your practice is—though you may not have the time or experience to do the number crunching yourself. Fortunately, many firms offer medical accounting services to doctors.  

The Importance of Medical Accounting for Patients

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In its general term, an accounting office serves as the backbone of several industries, dealing with the finances of a company. From keeping track of cash flow to recording the company's spending history, it is all handled by the accounting department.

This is very true also in the medical industry. Accountants are also necessary to handle the finances of a hospital and the doctors working in it. However, there are also medical accountants that cater to patients. They help patients set their cost limits, explaining to patients the process of their treatment from a financial standpoint. In a sense, they “diagnose” the costs of certain operations, medicines and treatment needed for full transparency. This process should help the patients and their families better prepare for the incoming expenses. Medical accountants also keep track of doctors' records, looking at the history of a physician and his or her capabilities in treating a certain ailment.

Spending for medical costs do not usually come cheap. When a family member falls ill, it is not only the patient’s health that is direly affected, but most likely, the entire budget of the family as well. It is burdensome as it is, and that’s why it is imperative for patients and their families to be properly informed of the available choices they have, and the corresponding amount it will most likely cost them. It is in this principle that medical accountants specifically working to help patients are necessary.

Importance of Accountants for Melbourne Doctors

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While doctors play a very important role in preserving and improving public health, the reality is that they can’t sustain themselves without money. Even then, money brings with it a number of challenges, like budgeting expenditures and following tax regulations, which doctors may be hard-pressed to handle on their own. What they need are experienced and reliable accountants who can handle the financial aspects of medical practices for them.

Medical accountants do more than just count money; they are also responsible for obtaining a suitable insurance policy for the office in order to protect the doctor, his staff, equipment and workplace from harm, theft and other unforeseen events. Accountants also have the responsibility of calculating the costs of rather expensive procedures such as bypass surgeries, especially if they have to be outsourced to a separate, more-specialized medical facility.

Perhaps, more importantly, accountants formulate a suitable financial strategy that the medical office can use to maximize profits and keep operating costs low, without sacrificing the quality of service they provide. This involves determining the proper overhead, or operating costs, that the office should adopt. A fixed overhead allows for greater control of expenses, while a variable overhead allows greater flexibility in providing multiple services.    

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