You have finished your medical degree – congratulations are definitely in order! This is indeed a monumental achievement, and one of the great aspects of achieving this degree is the prospect that now you are going to begin medical residency.  In order to help medical residents with their tax returns and make the season as easy and hassle-free as we can, we have curated this article to provide insight into the tax credits and deductions available to medical residents and fellows. View our annual Tax Tips for Medical Residents and Fellows Newsletter containing a roundup of tax-saving tips to help you get started on your 2022 tax filing.

Tax Tips for Medical Residents 2023 – Read now

From March 1, 2022, to March 31, 2022, PGY1 and PGY2 medical residents can get their tax returns prepared for only $249.99 (the regular price is $299.99). The Medical Resident Tax Package includes:

  • an easy to complete checklist to maximize your tax deductions and credits,
  • preparation of your T1 income tax return,
  • on-going support to answer all of your questions throughout the year, and more.

Learn More – Medical Resident Tax Package

Tally Out-of-Town Travel Costs

Medical residents may need to temporarily relocate or be “away from home” to participate in the Rural Ontario Medical Program(ROMP), to participate in a conference, or for other employment activities. These costs incurred in connection with your medical residency are generally deductible.The phrase “away from home” generally means that you travel overnight, or you are away long enough to require sleep or rest. You can deduct costs including meals, lodging, and vehicle expenses.

Deduct Job-related Moving Expenses

If you have moved to begin residency or to start to practice after residency and your new home is at least 40 kilometres closer to the new place of work, you can deduct the cost of the moving for you and your family. The deductible moving expenses can include the cost of transportation, accommodation, meals, packing and shipping your belongings, as well as lease cancellation fees, temporary living expenses, fees for connecting and disconnecting utilities, and costs to buy and sell your home.

Home Office Expenses (Due to COVID19)

If you worked from home more than 50% of the timeover a period of a least four consecutive weeks in 2022 due to COVID-19 you will be eligible to claim the home office expenses deduction for 2022.There are two options -Temporary flat rate method (new method) and Detailed method (existing method).The maximum amount employees may claim the flat rate method has been increased to $500 based a maximum of 250 working days.

Union Professional and Like Dues

You can deduct dues to professional societies including the CMA, OMA, CMPA, CPSO, as well as union dues to PARO. You can also deduct the cost of subscriptions to professional journals and trade magazines and fees for obtaining and renewing medical licenses.

Contribute to a TFSA (Rather Than an RRSP)

A TFSA is a great option for medical residents, as your income is expected to increase in future years. The TFSA limit for 2023 is $6,500. You can also make additional catch up contributions where you did not contribute the maximum amount in a previous year. If you turned 18 before the year 2009 and have never contributed, your maximum lifetime 2023 TFSA contribution limit is $88,000 (non-residents do not accumulate contribution room).

Deduct Your Job Expenses

You can deduct supplies and tools used directly in your employment including, scrubs and lab attire, office supplies, medical supplies and medical tools (i.e. stethoscope).

Form T2200 – Conditions of Employment

You can obtain a Form T2200 from the payroll office of your PGME program. The form outlines the type of expenses you were required to incur. You should review the form carefully and inquire if any of the information is inaccurate or omitted.

Take Advantage of Other Professional Deductions

Other deductions you can take advantage of include credit for charitable donations, tuition fees credit, child care costs, First Home Savings Account, Ontario rent property tax credit, student loan interest credit, Exam and Registration fees professional dues and fees, First home buyers’ first-time tax credit, Tax-Free Savings Account,  Registered Retirement Savings Plan.

Please get in contact with us at [email protected] for further details. Elliott Stone, CPA, CA, is the founder of MD Tax Physician Services in Toronto.