If you are a health care professional, you may receive Form W-2, Wage and Tax Statement , for income from wages and bonuses. Payments that you receive for providing health care services, in addition to your regular job, may be considered income from self-employment and are reportable on Schedule C, Profit or Loss from Business . For example, a registered nurse providing home health care visits or phlebotomy services by direct individual arrangements may be considered self-employed. For such arrangements, you may account for the income amounts yourself or you may receive Form 1099-MISC, Miscellaneous Income .
If you are self-employed and your net earnings are $400 or more, you must pay self-employment tax on the income you report on Schedule C. In addition, you may need to make estimated payments to cover the amount of self-employment tax or income tax associated with the income you report on Schedule C.
You may be able to reduce your taxes by deducting unreimbursed, job-related expenses. These expenses may be claimed as miscellaneous itemized deductions on Schedule A, Itemized Deductions , or, if attributable to self employment, they may be deductible on Schedule C. You should keep receipts to substantiate these expenses.
Examples of some of the items you may be able to deduct include:
- Subscriptions to professional medical journals
- Professional dues
- Malpractice insurance or insurance premiums for protection against liability or wrongful acts
- Specialized equipment or tools
- The cost and upkeep of uniforms if they are required for work and not suitable for everyday wear (for example, a nurse's bedside uniform and shoes that can not be worn when off duty)
- State or local government regulatory fees, licenses, or flat rate occupational taxes, provided these fees are not paid for initial certification or licensing
You also may be able to deduct work-related education courses or seminars if they meet certain requirements. Education typically meeting the requirements includes refresher courses, courses on current developments, and vocational courses. However, education that qualifies you for a new trade or business or that helps you to meet the minimum education requirements of your present trade or business is not deductible as a business expense. For example, a licensed practical nurse cannot deduct as a business expense the cost of going to nursing school to become a registered nurse or to become a physician's assistant as work-related education. The tuition may, however, qualify for the American Opportunity or Lifetime Learning Credit.
If you took out a loan to pursue your studies and you are paying interest on that loan, you may be able to claim up to $2,500 of the interest paid as a student loan interest deduction on your return. In certain cases, you may qualify to discharge all or part of the loan without having to include it as income. The loan must contain a provision for you to work in a given profession for a certain period of time for any of a broad class of employers. For example a full-time nurse or a medical technician who agrees to work for a public hospital in a rural area may qualify.