Tax Deductions for Physicians: What Doctors Can and Cannot Write Off in 2026

W-2 physicians: what still works

Employees cannot deduct unreimbursed job expenses such as CME, licenses, board certification or professional dues on their federal return. The best approach is to negotiate CME and licensing allowances in your contract, because reimbursed expenses are tax-free. What W-2 physicians can use:

• Pre-tax 401(k), 403(b) and 457(b) deferrals.
• HSA contributions through payroll ($4,400 self-only, $8,750 family in 2026), which also avoid payroll tax.
• Itemized deductions: state and local taxes (up to the SALT cap), mortgage interest, and charitable gifts above 0.5% of AGI.
• Student loan interest, but the deduction phases out at incomes most attendings exceed.

1099 physicians and practice owners: business deductions

• Malpractice insurance and tail coverage you pay yourself.
• State medical licenses, DEA registration, board certification and recertification.
• Continuing medical education, including conference registration and qualifying travel.
• Professional association dues and medical journals.
• Medical equipment, computers, software, EHR and telehealth subscriptions (often fully deductible in the year purchased under Section 179 or bonus depreciation).
• A home office used regularly and exclusively for the business, such as for charting, billing or telehealth.
• Business mileage, and travel away from your tax home for locums assignments.
• Cell phone and internet, to the extent used for business.
• Billing, legal, accounting and credentialing fees.
• Retirement plan contributions as an employer (solo 401(k), profit sharing, cash balance).
• Health insurance premiums for self-employed physicians and more-than-2% S corporation owners.
• Half of self-employment tax.

Residents and fellows

Most residents are W-2 employees with modest income, so the standard deduction usually beats itemizing. The most valuable moves are often a Roth IRA (residents usually qualify directly), choosing the right student loan repayment plan, and claiming moving or relocation reimbursements correctly. Moonlighting income paid on a 1099 opens business deductions and a solo 401(k).

Deductions physicians often miss

• The state pass-through entity tax, which converts state income tax into a business deduction. See PTET guide.
• An accountable plan in an S corporation to reimburse home office and phone costs tax-free.
• Hiring a spouse or children for genuine work in the practice at reasonable pay.
• Cost segregation on practice-owned buildings or rental property.
• Donating appreciated stock instead of cash.

Things that are not deductible

Commuting between home and your regular hospital, personal clothing (scrubs and white coats are a gray area unless required and unsuitable for everyday wear), most meals with colleagues, and personal medical expenses below 7.5% of AGI. Be cautious with aggressive write-offs that cannot be documented.

This article is for general educational purposes and is not tax, legal or investment advice. Tax law changes often and its application depends on your facts. Figures reflect 2026 rules as published by the sources listed above. Consult a qualified professional before acting. See our editorial policy.