On Sun Feb 10 16:43:12 2002 Graham Barden wrote: > > I'd love to write off the free care we give. Seems like a legit "cost of doing > business" and thus at least should be a business expense. Don't stores deduct cost > of shoplifting? Welcome to the world of the IRS. Most medical practices keep track of their income on a cash basis. In other words, you only count the income that you actually collect from people. As such, you can't write off the income that you don't collect. The opposite of cash accounting is accrual accounting. With accrual accounting, you keep track of your charges, not your collections. If you track things on an accrual basis, when you write off a bad debt, you can deduct it from your income. However, by then, you've probably already paid taxes on it. Taking the store analogy, you should be able to write off the cost associated with any immunizations or supplies used during the visit. But, I'd talk long and hard with a tax accountant or attorney before actually following this piece of free advice... John