A Guide to Tax Deductions as an Independent Contractor Optometrist

So you are a recent graduate from an optometry school. If you’ve begun working, there is a good chance you are currently working as an independent contractor optometrist. If you are an independent contractor, you are self-employed. The definition of an independent contractor is defined by the IRS as:

People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax. – IRS website

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties. There are 20 factors used by the IRS to determine whether you have enough control over a worker to be an employer. Though these rules are intended only as a guide-the IRS says the importance of each factor depends on the individual circumstances. Click here to view a 20 point checklist that will determine if you are an independent contractor.

Here is a video, The Basics of Tax W2 vs W9 in Optometry – Interview with CPA Gary Topple

Develop an Efficient Way to Track All Expenses

This is my first year, making a decent income after all those years of being a student. Getting 100% of the money I earn and putting it into the bank sounds great, but there are also tax obligations required by the IRS.

Check out the IRS Website for the Self-Employed Individuals Tax Center. It has information such as…

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About Quy Nguyen, O.D.

Quy Nguyen

8 comments

  1. Matthew Geller

    Hey if anyone has tax questions just ask me! I’ve had many years of experience as an independent contractor so feel free to ask away!!

  2. Michael Do

    Such a well written article. Easily one of the most helpful intros to the tax implications of being an independent contractor.

  3. Quy Nguyen

    Hey Mike, thanks for the comment. I hope you found it helpful and please don’t hesitate to ask our team any questions you may have.

  4. Thomas Hubbard O.D.

    Great article, Quy! Very helpful. Hope all is well.

  5. Quy Nguyen

    Hey Tom, thanks for the comment. Congrats on the wedding and hope you’re well too!

  6. I’ve been working as an independent contractor for the past 3 years since finishing optometry school. It’s important to keep your “business expenses” separate from your personal expenses when taking write-offs on your taxes. An easy way to help keep everything straight is is opening up a credit card to which you put any and all of your business expenses. That way every purchase is documented and tracked on your monthly statement. Most banks will generate an annual report that categorizes your purchases for you and you just run through and double check them. That way you you have documentation of all your expenses in the cloud and don’t have to worry about receipts! Also make sure to keep track of the miles you drive on your car as you can write off $0.55 a miles for any business related travel such as to and from your “business” PO Box every day after work. I got my bachelor’s degree in business before attending optometry school so accounting is fun for me! 🙂

    • Matthew Geller

      Hey doc! I totally agree… Mixing those two would be “piercing the corporate vail” and that has big consequences if you are ever audited. I personally use PersonalCapital.com for moment to moment changes on my financial portfolio and then I also use Quickbooks for any business data and record keeping. Thanks for commenting!

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