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Here a credit, there a credit, everywhere a little bit saved in taxes

Practice Management. By Julie A. Jacob, amednews staff. Jan. 28, 2002.

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When it comes to your income taxes, a lot of small credits and deductions can add up to significant reductions in the amount of income tax you owe, tax experts say.

So even though the deadline for filing your income taxes is still a few months away, now is the time to start gathering your income tax documents -- bank statements, receipts, invoices, deposit slips and so on -- and schedule a time to meet with your accountant to talk about your taxes and your eligible credits and deductions.

It's important to meet with your accountant in person to go over everything, said Andrew Schwartz, a CPA and editor of MDTAXES Network, a Web site with tax and financial information targeted specifically to physicians. Don't make the mistake of just dropping off your paperwork at your accountant's office, he said. "You should sit down with your accountant and go through the information."

Don't hesitate to ask your accountant about credits that the accountant hasn't discussed with you, said Phil Goldfarb, a CPA and partner with the accounting firm Weisberg, Mole, Krantz and Goldfarb in Hicksville, N.Y. "Sometimes a physician client will say 'Hey, did you see this article [about a tax deduction or credit]' and if it fits them, then terrific," he said.

There's a difference between tax deductions and tax credits, even though both can reduce the amount of income tax that you owe, Schwartz said.

Tax deductions are expenses that are deducted from a person's amount of taxable income, he said, while tax credits are expenses that are subtracted from the total amount of taxes owed. [...]