If the amount paid to family members seems excessive at first glance, the CCRA auditor will ask the physician to explain it and provide evidence the spouse or children actually did the work. Personal expenses Personal expenses, by definition, are those not laid out to generate income. If you are audited by the CCRA, you should be aware that auditors are required to look for these and to ensure only expenditures that can be reasonably related to the maintenance and growth of your practice are deducted. There may be occasions when an auditor and physician disagree on whether a deduction is personal in nature or not. If physicians know what types of expenses the CCRA is likely to review, they can be more comfortable with the deductions they claim.
Many physicians have an office in their home.
This office is either their principal place of business or a secondary office. These expenses could include a prorated share of rent, property taxes, mortgage interest, and operating costs such as heat and light. The CCRA auditor will focus on whether the deduction meets the act's requirements, such as evidence that patients are regularly seen in the office, that the division between home and office costs are reasonable and that deducted costs are backed with receipts. Insurance costs may or may not be deductible. Malpractice insurance premiums, or the cost of insurance that is required by lenders as a result of loans used in the practice, are deductible because they have a business purpose.