40.7 Deductions for Professionals
The following expenses incurred by self-employed professionals in the course of their work are generally allowed as deductions from income when figuring profit (or loss) from their professional practices on Schedule C:
- Dues to professional societies.
- Operating expenses and repairs of car used on professional calls.
- Subscriptions to professional journals.
- Rent for office space.
- Cost of fuel, light, water, and telephone used in the office.
- Salaries of assistants.
- Malpractice insurance (40.6).
- Cost of books, information services, professional instruments, and equipment with a useful life of one year or less. Professional libraries are depreciable if their value decreases with time. Depreciation rules are discussed in 42.1.
- Fees paid to a tax preparer for preparing Schedule C and related business forms.
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Doctor’s Malpractice Insurance
A self-employed doctor may deduct the premium costs of malpractice insurance. However, a doctor who is not self-employed but employed by someone else, say a hospital, may deduct the premium costs only as a miscellaneous itemized deduction subject to the 2% of adjusted gross income floor. Whether malpractice premiums paid to a physician-owned carrier are deductible depends on how the carrier is organized. If there is a sufficient number of policyholders who are not economically ...