Is That Deductible? Expert Witness Side Hustle

When the phone rang, I wasn’t expecting to hear from a Michigan law firm. But as fate would have it, I was home, balancing various business ventures, and could take the call. A few years ago, I had provided expert witness services for this firm, and they had kept my name in their database. This time, they needed a family practice expert witness for a case involving a delayed diagnosis of an imperforate anus in a newborn.

After discussing the details, the attorney requested my CV, W-9, and fee schedule. I realized it had been a while since I updated my rates, so I increased my hourly fee to $700 and bumped up all the other metrics in the fee schedule. I figured, why not make it worth my while?

He called back the next day with concerns about my recent work history. Since my hospital’s OB and newborn unit had closed 19 months ago, and I’d transitioned to intermittent locums work and planned to move full-time into telemedicine with ChatRx, he worried the defense might challenge my current level of “expertise.”

I appreciated his honesty, and I’ll admit, I was transparent about my evolving career. If I wasn’t the ideal witness for their case, I was fine with that. The truth is, as medical professionals, the sheer diversity of work options available today is astonishing. And in a world where virtual work opportunities are expanding, the ability to job stack—combining multiple streams of income—is growing rapidly.

The nice thing is that if this side job works out, I can make a little money and do it from anywhere, including my upcoming locums gig in Kansas.

Which brings me to this week’s key question: What’s deductible when you’re running a virtual micro-corporation that is essentially “a practice without walls”?

Let’s dive in and break it down.

Building and Maintaining Your Virtual Practice Infrastructure

As someone who’s operated a virtual micro-corporation, I’ve learned that the key to success is setting up the right infrastructure. And yes, much of this is deductible. Running your business from home doesn’t mean you can’t claim legitimate expenses. Here are some key areas to consider:

1. Home Office Deduction

If you’re running your micro-corporation from home, the home office deduction can be significant. The IRS allows you to deduct the portion of your home expenses (utilities, rent/mortgage, property taxes, insurance, etc.) that corresponds to the square footage used exclusively for your business. For instance, if your dedicated workspace is 200 square feet and your home is 2,000 square feet, you can deduct 10% of your home expenses.

2. Technology and Equipment

Your business’s virtual operations require hardware and software. Deductible items include:

• Computers, monitors, and printers

• Smartphones and tablets

• Office furniture like desks, chairs, and shelving

• Software subscriptions for practice management, telemedicine platforms, and cloud storage (e.g., Zoom, Microsoft Office, Dropbox)

3. Internet and Phone

If you use your home internet and phone for business, a portion of these costs is deductible. Keep detailed records to substantiate the percentage of business use versus personal use. Many experts suggest using a separate phone line or internet service for business to simplify tracking.

4. Professional Fees and Subscriptions

Expenses related to staying current in your field are fully deductible. This includes:

• Licensing fees

• Professional association dues

• Medical journals and publications

• Continuing medical education (CME) courses

5. Liability Insurance

If you’re offering services like expert witness work, medical-legal consulting, or telemedicine, professional liability insurance is a must. Fortunately, it’s also deductible.

Marketing and Business Development Costs

Running a virtual micro-corporation also involves marketing yourself and your services. These costs are deductible, so don’t hesitate to invest in your business’s growth.

1. Website and Online Presence

Creating and maintaining a professional online presence is essential. Deductible expenses include:

• Website design and hosting fees

• Domain registration

• SEO services

• Paid advertising (Google Ads, Facebook Ads, etc.)

2. Networking and Outreach

Whether you’re attending virtual conferences, subscribing to job boards, or joining platforms to connect with potential clients, these expenses fall under marketing and business development. Even sending holiday cards to referring attorneys can be written off as a business expense.

3. Branding and Promotional Materials

Custom logos, branded business cards, brochures, or even merchandise that promotes your services are deductible. Think of these as investments in your micro-corporation’s image.

Travel and Transportation

While much of your work can be done from home, there are occasions where travel is required. If you’re traveling to give a deposition or attend a conference, these expenses are deductible. This includes:

• Airfare, train, or bus tickets

• Hotel stays

• Car rentals and mileage (if driving your own car for business purposes)

• Meals while traveling for work (50% deductible)

Miscellaneous Deductible Expenses

Running a business comes with a variety of smaller, but no less important, expenses. Here are a few more that you should track:

1. Office Supplies

Pens, paper, ink cartridges, file folders, and other office essentials are deductible. Even seemingly minor purchases add up over time.

2. Education and Training

As a doctor, staying informed and improving your skills is crucial. Deductible educational expenses include:

• Courses on telemedicine or business management

• Books and e-books related to your field

• Workshops and webinars

3. Tax Preparation and Legal Advice

If you hire a CPA to prepare your taxes or consult with an attorney for business-related matters, these fees are deductible. For example, if you’re forming an PLLC or micro-corporation, the associated legal fees can be written off.

4. Banking and Payment Processing Fees

Business bank accounts often come with monthly fees. If you’re accepting credit card payments or using platforms like PayPal, Stripe, or Square, those transaction fees are deductible as well.

Why You Should Embrace a Virtual Micro-Corporation

The beauty of running a virtual micro-corporation is the freedom it offers. Whether you’re consulting from your home office, attending a deposition via Zoom, or balancing multiple job streams, the possibilities are endless. But with great flexibility comes the responsibility of keeping meticulous records. Using accounting software or hiring a bookkeeper can ensure you maximize your deductions and avoid unnecessary stress during tax season.

Call to Action: Take the Next Step with SimpliMD

Running a virtual practice is about more than just saving on taxes—it’s about creating a professional life that aligns with your goals and values. Whether you’re new to the concept or looking to optimize your existing setup, SimpliMD is here to help.

• $2,000 SimpliMD Business Coaching: Receive 1:1 holistic coaching tailored to small business growth, with flexible monthly or quarterly programs to fit your needs.

• $199 Creating a Practice Without Walls Course: Discover how to launch your own virtual professional micro-corporation and thrive in the expanding marketplace with this comprehensive course.

• $99 1:1 Micro-Business Consultation: Work directly with me to evaluate your professional life and explore how a micro-corporation can elevate your career.

Take control of your professional destiny. Visit SimpliMD today and start building a practice that works for you.