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Is That Deductible? Revisiting Habits to Maximize Pre-Tax Cash Flow

Jan 13, 2025

The Importance of Revising Your Habits: Doubling Down on What Works and Letting Go of What Doesn’t

As the calendar turns, you might feel the pull to reflect on your habits—the daily practices that shape your professional success and personal well-being. Habits are the foundation of your routine, but they are not static. What worked for you in one season of life may no longer serve your goals in another. If you want to grow your micro-business, improve your professional satisfaction, or reclaim balance in your life, revisiting and revising your habits is essential.

So, which habits have become non-negotiables that you need to double down on next year? And which ones are holding you back, ready to be replaced? Let’s dive into these questions, with actionable strategies to help you refine your habits for a more intentional and productive year.

Habits to Hold Onto

1. Setting Clear, Actionable Goals

Without clear goals, you’re simply drifting through your professional and personal life. Next year, double down on the habit of setting goals that are specific, measurable, and achievable. Break big objectives into smaller, actionable steps that you can tackle daily or weekly.

Think of goal-setting not just as a New Year’s resolution but as a quarterly practice. Review your goals regularly and adjust them as necessary. Whether you’re expanding your micro-corporation, streamlining your practice, or exploring new income streams, intentional goals are your roadmap to success.

2. Blocking Focused Time

Your time is your most valuable resource, and focused time blocks are the secret weapon for getting more done without burning out. Use tools like your calendar to carve out uninterrupted blocks for deep work. This habit is particularly critical for physicians balancing clinical work and entrepreneurial ambitions.

Be ruthless about protecting this time. Schedule tasks that require critical thinking or creativity during your peak energy hours and leave less demanding activities, like email, for later.

A fantastic Great Lakes retreat location is: Simpli SoHa

3. Prioritizing Your Well-Being

As a physician, you know the importance of health, but are you prioritizing your own? Your physical and mental well-being directly impact your ability to serve patients and grow your business. Next year, double down on daily exercise, consistent sleep, mindfulness practices, and hobbies that bring you joy.

When you take care of yourself, you’ll notice higher energy levels, sharper focus, and more resilience—all essential for thriving in both your professional and personal life.

4. Networking with Intention

In the age of telehealth and virtual conferences, networking has evolved, but it’s still a cornerstone of professional growth. Make it a habit to connect with other physicians, entrepreneurs, or experts in fields that align with your goals.

Whether you attend industry events, join online communities like SimpliMD, or simply schedule coffee chats with colleagues, intentional networking opens doors to mentorships, partnerships, and new opportunities.

Habits to Let Go Of

1. Overcommitting Your Time

If you’re saying “yes” to everything, you’re saying “no” to what truly matters. Overcommitting leads to burnout and dilutes your focus. Next year, replace the habit of overcommitment with a disciplined approach to saying “no” to anything that doesn’t align with your priorities.

Ask yourself, “Does this opportunity bring me closer to my goals?” If the answer is no, let it go.

2. Working Without a Plan

Flying by the seat of your pants might have worked during a busy season, but it’s not a sustainable strategy for growth. Replace reactive decision-making with proactive planning. Dedicate time at the start of each week to outline your top priorities and daily tasks.

Use tools like task managers, digital planners, or even a simple notebook to track your plans and stay on course.

3. Avoiding Delegation

If you’re doing everything yourself, you’re holding your business back. Delegation isn’t just a habit; it’s a skill that you must cultivate. Whether it’s outsourcing administrative tasks or hiring a virtual assistant, it’s time to let go of the belief that you have to do it all.

Think of delegation as an investment in your efficiency and mental bandwidth.

4. Sticking to Outdated Strategies

Just because something worked five years ago doesn’t mean it’s still the best approach today. The marketplace is evolving, especially in medicine and entrepreneurship. Be open to letting go of outdated methods and experimenting with fresh ideas.

For example, if traditional advertising isn’t yielding results, it might be time to explore social media marketing or targeted email campaigns.

Is That Deductible?: Micro-Corporation Owner Mindset and Habits

When you embrace the mindset of running your professional life as a micro-corporation, you quickly realize the power of funneling daily expenses through pre-tax cash flow channels rather than paying for them out of post-tax income. This habit doesn’t just save you money—it transforms your financial strategy, weaving tax efficiency into every corner of your personal and professional life.

But here’s the catch: habits aren’t static. What served you last year might no longer align with your goals today. To maximize the synergy between your micro-business and household finances, you need to regularly evaluate your habits. Some deserve a double-down effort because they’re fueling your growth, while others may need to be replaced with sharper, more effective strategies.

Let’s break this down through the lens of the “Is That Deductible?” mindset to help you refine your approach next year.

Habits to Double Down On

1. Leveraging Business Expenses for Everyday Necessities

One of the simplest ways to build wealth through pre-tax cash flow is to categorize your daily expenses in ways that benefit your business. For example, does your business rely on your phone or internet? It’s time to double down on ensuring those are expensed appropriately through your micro-corporation.

If you’ve been good about capturing these expenses, next year could be the time to level up. Invest in a robust tracking system or revisit your expense categories with a tax professional to ensure you’re not leaving money on the table.

2. Turning Travel into Tax-Advantaged Experiences

If you travel for conferences, busienss meetings, or other professional reasons, you already know these trips can often be deductible. Next year, aim to double down by weaving personal enjoyment into these business trips in a compliant manner.

For example, a weekend in Napa Valley can start as a business conference and extend into family time. With proper documentation, you’re not just enriching your personal life—you’re doing it with pre-tax dollars.

A personal example is my current CME trip to Antarctica, during which I will have a brief stopover in Dallas to see my son, his wife, and their new grandbaby while traveling back to our home near Chicago.

3. Home Office Optimization

If you’re not maximizing your home office deduction, you’re missing one of the easiest ways to redirect expenses like utilities, property taxes, and even depreciation into pre-tax channels. This year, consider enhancing your home office setup. Invest in equipment, furniture, or tech upgrades—all of which are deductible.

The key here is to ensure your home office meets IRS standards for exclusivity and regular use. Get in the habit of documenting these improvements thoroughly.

Personally, I find that the 14-day home rental program is more tax-efficient for my situation than the home office deduction. The choice between the two may be a matter of personal preference. If you choose the 14-day home rental program, ensure you work with your CPA or attorney to do it properly.

4. Health Savings and Benefits Planning

Health insurance, HSAs, and other benefits can be powerful tools for shifting healthcare costs into pre-tax expenses. For example, if you’ve adopted an HSA-compatible high-deductible health plan, you’re already enjoying tax-free contributions and withdrawals for medical expenses.

Next year, consider expanding this habit by exploring other tax-advantaged healthcare options available to small business owners, such as an Medical Reimbursement Plans (MRPs).

I use my business structure to provide a combination of a health insurance-sharing program, HSA, and MRP, all of which make my healthcare expenditures pre-tax, which is nice!

1. Neglecting Proper Documentation

If you’re not consistently documenting your deductible expenses, you’re walking a fine line that could lead to missed opportunities—or worse, an audit headache. Next year, replace the habit of relying on memory with automated systems or dedicated tools for tracking your expenses in real time.

For example, a simple app like Expensify or QuickBooks can streamline this process and ensure every expense is logged and categorized correctly.

2. Mixing Business and Personal Finances

It’s tempting to use one credit card for everything, but this habit can make expense tracking a nightmare and open the door to tax challenges. Replace it with the habit of separating your finances completely. Use dedicated business accounts and cards for all professional transactions to keep your records clean.

3. Ignoring Professional Development as a Business Expense

If you’ve been paying for courses, books, or conferences out of pocket, you’re missing a key opportunity to align these investments with your pre-tax cash flow strategy. Replace this oversight with a habit of treating every professional development expense as an essential—and deductible—part of your business operations.

4. Post-Tax Gifting

Gifting to your loved ones or your favorite charities is wonderful, but doing so from your personal finances can be inefficient. Next year, explore tax-advantaged ways to give. Set up a donor-advised fund or think creatively about how your business can support charitable efforts while generating goodwill and tax benefits. For example, I donated more than 50% of SimpliMD’s profits from 2024 into my DAF, making it a very tax efficient method for charitable donations.

How to Transition Old Habits into New Pre-Tax Strategies

1. Conduct a Tax Habit Audit

Review your current expenses and financial habits. Which ones can be shifted into pre-tax cash flow channels? Ask your CPA or tax advisor for help identifying untapped opportunities.

2. Implement Incremental Changes

Start small by targeting one or two high-impact habits. For instance, if you’ve never considered your car’s business use, start tracking mileage to see how much could be deductible.

3. Leverage Tools and Expertise

Use software or hire experts to help you stay consistent. The right tools can make habit formation easier and ensure compliance with tax regulations.

4. Schedule Quarterly Reviews

Building tax efficiency isn’t a one-and-done effort. Block out time each quarter to review your expenses, adjust strategies, and ensure you’re on track to meet your goals. If you aren’t working a CPA who offers this type of tax planning service, you are missing out. Reach out to me I will be happy to connect with a CPA who understands independent doctors.

Next Steps

If you’re ready to make the “Is That Deductible?” mindset your secret weapon for wealth accumulation, I’ve got the tools and guidance you need to take it to the next level.

$2000 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.

The beginning of the year is your opportunity to refine your habits, align your spending with your goals, and maximize your pre-tax cash flow channels. Let’s make it your best year yet!