Tax deductions for professionals

What this book actually teaches

Tax Deductions for Professionals by Stephen Fishman is a NOLO title aimed at a specific segment of self-employed workers: licensed professionals — physicians, attorneys, architects, accountants, engineers, consultants, therapists, and others who earn income from knowledge and credentialed expertise rather than from selling products. The book's organizing argument is that professionals have a different deduction profile than general small business owners, and a general small-business tax guide will both miss deductions specific to their situation and bury them in analysis that doesn't apply. Fishman, a NOLO attorney who has written extensively on self-employment tax, structures the book to serve this audience directly.

The professional-specific deductions receive the most detailed treatment. Continuing education and professional development costs — licensing renewal fees, bar association dues, medical board fees, professional journals, and courses required to maintain credentials — are deductible as ordinary and necessary business expenses and represent a category most professionals undercount. Fishman explains the IRS distinction between expenses that maintain existing credentials (deductible) and expenses for a new profession or career change (not deductible), a line that catches many professionals who attempt to deduct broadly. Professional liability insurance, malpractice insurance, and errors-and-omissions coverage are covered in detail, along with the home office deduction as it applies to professionals who see clients at home or maintain a principal administrative office there.

Business structure receives sustained attention because the choice between operating as a sole proprietor, S corporation, or professional corporation (PC) or professional limited liability company (PLLC) has significant tax and liability implications for licensed professionals. Many states restrict which entity structures licensed professionals can use, and Fishman explains the state-law overlay alongside the federal tax analysis. The S corporation reasonable compensation question — relevant for profitable professionals who want to reduce self-employment tax — is treated with the IRS scrutiny level that solo-practice professionals actually face.

The book also covers the deduction for a portion of health insurance premiums for self-employed professionals, retirement contributions through SEP-IRA and Solo 401(k) structures (particularly relevant for high-income professionals with significant tax reduction incentive), and the qualified business income (QBI) deduction introduced by the Tax Cuts and Jobs Act of 2017. The QBI deduction treatment is particularly important for professionals: the TCJA specifically excluded "specified service trades or businesses" (SSTBs) — which includes most licensed professional fields — from the deduction at high income levels, phasing it out for joint filers above approximately $383,000 in 2024 income. Fishman explains the SSTB exclusion and the phase-out threshold in editions that postdate the TCJA.

For self-employed physicians, attorneys, CPAs, consultants, therapists, and other licensed professionals operating as sole proprietors or in solo or small-group practice, this guide covers the deduction landscape with more precision than any general self-employment tax guide.

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About Stephen Fishman

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