Medical Transcription Taxes & Legalities

Note: Please note that we are not qualified lawyers or legal professionals. This information is based on our personal experiences and we urge you to seek your own legal advice regarding your business.

Registering your medical transcription business, filing your taxes and opening a checking account is all quite straightforward. Here are some easy steps to registering your business and filing your medical transcription taxes.

Business License

There are several ways you can get your business license.   You can contact your local City Hall and find out the specific requirements for your area.   They will also tell you what documents you need to fill out, etc.   It’s pretty straightforward and the most affordable option.

Your other option, which is one I opted for, is contacting a recommended accountant.   For a fee (about $200 to $450) they will file for your business license and give you the necessary paperwork to open your checking account.   They will also keep copies of these records for you and advice you on any additional business needs.

Unless you’re a tax whiz, a good accountant is also a must when you are self employed. They will make you aware of any items you can deduct and act in your favor (legally of course) to help you keep as much as possible of your hard-earned cash.   They will also make sure you’re complying with all the tax laws and regulations.   My accountant has been a lifesaver by saving me money, time and worries.

As a third option, you can go online to several different sites and for a fee register your business.   I’ve not used one of these services before so can’t really make any recommendations.   But the process seems quite straightforward.   Keep in mind you’ll still need an accountant unless you plan on filing your own taxes.

Checking Account

Once you have your business license opening up a business checking account is easy.   Call up your preferred bank and make an appointment.   Ask them what paperwork you will need so you don’t have to go back again. 

Take your business license and necessary documents to your appointment, choose your preferred account type and you’re in business.   The bank may even give you temporary checks to use on the same day. 

T axes

As a self-employed business person there are many things you can deduct you’re your taxes. Your best option is to speak to a recommended accountant, who will advice you on all the different ways you can save money.

List of Possible MT Business Deductions:

• Business Mileage 
• Business Gifts 
• Health Insurance 
• Training/Courses 
• Business Equipment (office furniture, computer, paper, ink cartridges, pens, transcription equipment, etc.) 
• Books 
• Business Cards 
• Office Cleaning Service 
• Office extras such as coffee, hand cream (you’re doing a lot of typing), postage, cleaning materials, etc. 
• A portion of your phone and electric bill (corresponding to your office space) 

* Please keep in mind this list isn’t exhaustive by any means and always speak to your accountant who will best advice you of all appropriate deductions.

Subcontractors & 1099 Forms?

Most MTs take on subcontractors when their business starts to expand.   Subcontractors are other MTs who will provide their services to you for a charge.   There is no need to hire employees and worry about benefits, etc.   Your subcontractors will be responsible for their own business and their own taxes. They are simply service providers.

You are, however, responsible for providing each subcontractor with a 1099 form by January 31^st for the previous work year.   You then need to send a copy of each 1099 form to the IRS.   If their earnings were less than 600.00 US Dollars you don’t need to give them a 1099 form.   You will also receive 1099 forms from each doctor/account you service showing a total of your earnings for the year.

When you take on a subcontractor you will need to have their full name, social security number and contact details.   You then pass this information to your accountant who will then give you all the appropriate paper work to give to your subcontractors and send copies of any necessary forms to the IRS.

If you’re like me, and don’t really want to worry about all this tax stuff, a good account will be a must for your business. It’s not expensive and will ensure you are up to date on all your taxes and responsibilities.