Introduction

If you’re a professional, no one needs to tell you that taxes are one of your largest expenses. The best way to minimize your taxes and maximize your take-home income is to take advantage of every tax deduction available to you.

The IRS will never complain if you don’t take all the deductions you’re entitled to—and it certainly doesn’t make a point of advertising ways to lower your taxes. In fact, many professionals miss out on all kinds of deductions every year simply because they aren’t aware of them—or because they neglect to keep the records necessary to back them up.

That’s where this book comes in. Specially tailored for the unique needs of professionals, it shows you how you can deduct all or most of your business expenses from your federal taxes—everything from advertising to vehicle depreciation.

This book, the first of its kind, is about tax deductions for all types of professionals, including:

• accountants
• architects
• chiropractors
• consultants
• dentists
• doctors
• engineers
• lawyers
• marriage and family therapists
• optometrists
• pharmacists
• psychologists, and
• veterinarians.

It can be used by professionals who work by themselves, or by those involved in group practices. You can use this book no matter how your practice is legally organized—whether you are a sole proprietor, or are involved in a professional corporation, a partnership, or an LLC.

This is not a tax preparation guide—we do not show you how to fill out your tax forms. (By the time you do your taxes, it may be too late to take deductions you could have taken if you had planned the prior year’s business spending wisely and kept proper records.) Instead, this book gives you all the information you need to maximize your deductible expenses—and avoid common deduction mistakes. You can (and should) use this book all year long, to make April 15 as painless as possible.

This year more than ever you’ll need guidance when it comes to understanding your taxes. Congress passed the Tax Cuts and Jobs Act at the end of 2017, the most sweeping change to the tax code in over 30 years. Most of these changes went into effect starting in 2018. We explain the new tax law and how it affects business deductions for professionals including:

• new individual and corporate tax rates (see Chapter 1)
• a new 20% tax deduction for pass-through business owners, which includes many professionals (see Chapter 4)
• changes to depreciation rules allowing faster write-offs of business property, including vehicles (see Chapters 5 and 6), and
• the elimination of deductions for business-related entertainment and certain meals (see Chapter 13).

Even if you work with an accountant or another tax professional, you need to learn about tax deductions. No tax professional will ever know as much about your business as you do; and you can’t expect a hired professional to search high and low for every deduction you might be able to take, especially during the busy tax preparation season. The information in this book will help you provide your tax professional with better records, ask better questions, obtain better advice—and, just as importantly, evaluate the advice you get from tax professionals, websites, and other sources.

If you do your taxes yourself (as more and more small business owners are doing, especially with the help of tax preparation soft­ware), your need for knowledge is even greater. Not even the most sophisticated tax preparation program can decide which tax deductions you should take or tell you whether you’ve overlooked a valuable deduction. This book can be your legal companion, providing practical advice and information so that you can rest assured that you are not paying more to the IRS than you need to.