1. Practice Management & EHR Software
Dermatology-specific platforms like Modernizing Medicine, Nextech, or any EHR and practice management software you use are fully deductible as a business expense. Enter these costs under “Other Expenses” on Schedule C, Part V. Don’t overlook smaller SaaS subscriptions either — patient intake tools, e-fax services, and HIPAA-compliant communication platforms all count.
2. Medical Supplies & Consumables
Gloves, syringes, needles, gauze, cotton tip applicators, punch biopsy tools, tongue depressors, biohazard bags, and any other single-use clinical supplies consumed in the course of patient care are fully deductible each year. Because these items are used and replaced regularly, they don’t need to be depreciated — they’re expensed in full the year you buy them.
3. Dermatology Equipment Depreciation
Major equipment purchases — including microneedling devices, energy based devices (CO2, Er:YAG, Nd:YAG lasers, IPL platforms, RF microneedling devices), dermatoscopes, cryotherapy units, phototherapy units, and exam tables — can now be fully expensed in the first year up to $2,500,000 under Section 179 of the tax code (vs. being depreciated over their useful life). Talk to your accountant about which approach makes more sense based on your current and projected income.
4. Continuing Medical Education (CME)
Registration fees for dermatology conferences like the AAD Annual Meeting or ASDS Annual Meeting, along with online CME courses and related travel expenses, are fully deductible. The key requirement is that the education must be directly related to maintaining or improving skills required in your current practice. Remember that only 50% of meals during business related travel are deductible.
5. Professional Membership Dues
Annual membership fees paid to organizations like the American Academy of Dermatology, the American Society for Dermatologic Surgery, your state dermatology society, or the American Medical Association are all fully deductible as ordinary business expenses.
6. Malpractice & Liability Insurance
For dermatologists, malpractice insurance is not optional — and fortunately, it is fully deductible. This includes both occurrence-based and claims-made policies, as well as tail coverage if you switch carriers or close your practice. Consider always keeping an occurrence policy as you will not pay for tail coverage when moving practices.
7. Office Supplies & Disposables
Beyond clinical supplies, the everyday costs of running an office are deductible too. This includes exam table paper, patient gowns, printer ink, printing paper, envelopes, hand soap, toilet paper, paper towels, coffee for the waiting room, cleaning services, and landscaping. Remember, this category covers disposable items only — anything with a longer useful life falls under depreciation.
8. Advertising & Marketing
Every dollar you spend promoting your dermatology practice is deductible. This includes your website design and hosting, search engine optimization (SEO), Google Ads, social media management, before-and-after photo platforms, online directory listings like Healthgrades or Zocdoc, print ads, brochures, and business cards.
9. Bank Fees & Credit Card Processing
Business banking maintenance fees, wire transfer fees, and credit card processing fees through platforms like Stripe or Square are all deductible. If your practice accepts insurance payments through a clearinghouse, those transaction fees count as well.
10. Employee Wages & Benefits
Salaries paid to your medical assistants, licensed estheticians, front desk coordinators, and billing staff are fully deductible. So are the benefits you provide, including employer-sponsored health insurance, life insurance, retirement plan contributions, and dependent care assistance programs.
11. Contract Labor
If you bring in 1099 contractors to support your practice — locum tenens dermatologists, freelance medical billers, virtual assistants, marketing consultants, or web developers — those payments are fully deductible. Be sure to issue a Form 1099-NEC for any contractor paid $2000 or more during the year (this has increased from $600 or more).
12. Office Rent or Mortgage Interest
Monthly lease payments for your clinic space are fully deductible as a business expense. If you own your office building, the mortgage interest is deductible as well. Business loan interest used to fund your practice startup or expansion also qualifies.
13. Self-Employment Tax Deduction
One of the more valuable above-the-line deductions available, self-employed dermatologists can deduct 50% of their self-employment tax directly from gross income. This reduces your overall taxable income without requiring you to itemize.
14. Health Insurance Premiums / Disability Insurance Premiums
If you are self-employed and not eligible for coverage through a spouse’s employer plan, you can deduct 100% of health, dental, and vision insurance premiums paid for yourself and your family. This is one of the most significant deductions exclusively available to self-employed physicians. Many dermatologists will use post-tax dollars to pay for Disability Premiums so there is no tax deduction if the policy is ever used.
15. Business Loan Interest
Interest paid on loans taken out specifically to start, grow, or sustain your dermatology practice is deductible. This includes term loans, lines of credit, and business credit card interest — as long as the funds were used for legitimate business purposes.
16. Laser & Aesthetic Equipment Maintenance
Annual service contracts, calibration fees, and maintenance agreements for your laser and aesthetic devices are fully deductible each year as an operating expense — separate from the original depreciation of the equipment itself. Given how costly laser maintenance contracts can be in dermatology, this is a deduction worth tracking carefully.
17. Injectable & Cosmetic Product Inventory
The wholesale cost of neuromodulators like Botox and Dysport, dermal fillers like Juvederm and Restylane, sclerotherapy solutions, and other injectables purchased for patient treatments are deductible as cost of goods sold. Keep detailed purchasing records throughout the year to make this calculation straightforward at tax time.
18. Retail Skincare Product Inventory
If your practice operates a retail skincare boutique or sells medical-grade products to patients — the wholesale cost of that inventory is deductible as cost of goods sold. Revenue from retail sales should be tracked separately from clinical revenue for clean bookkeeping.
19. Pathology & Lab Fees
Costs associated with sending biopsy specimens to external dermatopathology labs are deductible as ordinary business expenses. If you’ve invested in an in-house pathology setup, those operating costs qualify as well. This is one of the most commonly overlooked deductions in dermatology given how routine biopsies are.
20. Dermatology-Specific Software & Technology
Beyond your EHR, any specialty technology subscription is deductible. This includes diagnostic tools like VisualDx, teledermatology platforms, patient communication tools like Klara or Spruce Health, and dermoscopy image management software.
21. Phototherapy Equipment & Supplies
If your practice offers phototherapy for conditions like psoriasis, vitiligo, or atopic dermatitis, narrowband UVB units and replacement bulbs are deductible. Bulbs and consumables are expensed annually while the phototherapy unit itself is depreciated over its useful life.
22. Surgical & Procedure Room Supplies
Mohs surgery trays, punch biopsy instruments, curettes, sutures, electrosurgical supplies, and sterile draping materials used in procedures are deductible as clinical consumables in the year they are purchased.
23. Medical Waste & Biohazard Disposal
Licensed biohazard and sharps disposal services are a regulatory requirement for dermatology practices — and a fully deductible operating expense. Keep your invoices from your waste disposal vendor organized throughout the year.
24. Board Certification & Licensing Fees
ABD board certification and recertification fees, state medical license renewals, DEA registration, and any other credentialing fees required to legally practice dermatology are fully deductible as ordinary business expenses.
25. Clinical Photography Equipment & Software
Dermatology is one of the most visually documented specialties in medicine. Cameras, ring lights, standardized photography backdrops, and software platforms like Canfield VISIA, Fotofinde, Aura or anything used for patient documentation and treatment tracking are all deductible — equipment via depreciation, software subscriptions annually.
