Taxes made easy for EMTs
You can deduct the cost of cleaning your uniform, but not the price of the spaghetti you spilled on it
"Death and taxes and childbirth! There’s never any convenient time for any of them!” — Scarlett O’Hara, "Gone with the Wind."
Scarlett sounds a bit like a cynical, burned-out old medic, doesn’t she? Can you imagine how much trouble she’d be in if she’d had Facebook?
I’m betting almost every member of our profession considers taxes to be the most inconvenient of Scarlett’s big three, which is why I compiled a few end-stage tax-filing tips for EMS folks who’d rather respond to a high-rise without elevators than tackle taxes.
Admit it: When Prissy, Butterfly McQueen’s character in "Gone with the Wind," wailed “I don’t know nothin’ ‘bout birthin’ babies,” you felt a little smug. You knew “birthin’ babies” was no big deal; they’re slimy and slippery, but nature pretty much runs the show. Preparation and practice help.
It’s the same with tax returns, except no one gets to name them, and universal precautions are of no use (finding a safe place to say that was on my bucket list.) It also helps to think of the IRS as “nature.”
With a little planning and patience, most of you should be able to file your own taxes. Before we cover some of the basics, let me emphasize I’m a medic, not a lawyer or an accountant. I don’t think I even own a suit anymore (I had to get rid of them when they all suddenly shrank around the middle).
Also, I’m assuming you’re not incorporated, you don’t have employees, and your risk tolerance is appropriate for an EMS provider, but not necessarily for a tightrope walker with ADHD.
Get it together
At its simplest, tax preparation requires two kinds of information: taxable income and deductible expenses. The IRS guides you through the rest with booklets and forms, some of which make ACLS algorithms seem straightforward.
However, once you know your income and expenses, serious complications are no more common than, say, breech presentations. And what do you do when you see a butt instead of a head? I mean after you wish you hadn’t gone back in service so soon?
You follow procedures and hope for the best. It’s the same with taxes.
Taxable income is mostly money you made working or investing. Employee wages are reported to you and the IRS on W-2 forms you’re supposed to get through the mail, on line, or with a paycheck before February 1.
You should also receive 1099 forms showing money you earned as a contractor or investor — e.g. speaking fees, bank-account interest, stock dividends, and proceeds from sales of stock or other assets. Stuff all those W-2s and 1099s into an envelope labeled “2013 Income.” Add “not nearly as much as I deserve” if indignation motivates you.
What were your expenses?
Tax-deductible expenses are usually harder to reconstruct because, other than charitable donations, they’re not routinely reported to you by the recipient.
“Tax deductible” means expenditures that offset your taxable income, often dollar for dollar. Interest on loans (including mortgages), state income taxes, property taxes, self-employment costs, and charitable contributions are examples of items that are usually 100 percent deductible.
Medical and employee expenses are subject to minimums you have to exceed before you can deduct them. However, it’s common for EMS providers to meet those criteria. Try using checkbook registers or bank and credit-card statements to reconstruct deductible expenses.
EMS workers usually can deduct unreimbursed costs of uniforms, union and professional dues, job searches, job-related education and travel, and medical equipment, once the total of those and other so-called miscellaneous expenses exceeds 2 percent of your income.
Not deductible are payroll taxes, commuting expenses, and workplace meals. You can deduct the cost of cleaning your uniform, but not the price of the spaghetti you spilled on it.
Put all your expenses in an envelope marked “2013 Expenses.” Congratulate yourself if you’ve gotten this far without testing levels on that old nitrous oxide unit.
If you could simply send the IRS your income and expenses envelopes and let them figure your taxes, what a wonderful world this would be. Unfortunately, our government doesn’t employ enough people to track global warming and do our taxes. You have to fill out some forms, physically or online. Here are a few of the most common:
- 1040 (A/EZ): The main page of your return, summarizing income, deductions, exemptions (earnings not taxed), taxes, and credits (instant rebates). Almost everyone files one of these. You’ll need a calculator or tax preparation software and plenty of time — at least as long as it would take you to watch three episodes of "Emergency!" with commercials.
- Schedule A: You get to make an important decision before completing this form: Are you going to itemize your deductions, or would you be better off taking the standard deduction ($6,100 for a single filer in 2013)? It’s simply a matter of choosing the bigger number.
- Schedule B: If you earned more than $1,500 from interest and dividends, you’ll have to list them here.
Someone with lots of free time should write separate pieces on Schedule C (business earnings) and Schedule D (capital gains). Those of you who need those forms have my sympathy; its an exceptional opportunity to see if those anger-management classes are working.
You can download these and other tax forms at www.irs.gov, or order them through the mail.
You probably wouldn’t have read this far if you’re comfortable doing your own taxes. Keeping real-time income and expense records requires much less effort than year-end reconstruction (at least it seems that way mid-reconstruction), and lowers the probability of a surprise tax bill next year.
Some colleagues tell me they procrastinate because tax preparation is so much work involving so little money. I tell them it’s not too late to get organized. I also tell them it’s not too late to go to nursing school.
Tomorrow is another day!