The answer to this question depends on two factors.

First, can you open your practice without these items? If you can't, then you need to purchase them prior to October anyway.

If you're being compensated as an independent contractor where you moonlight, you'll just write off these expenditures directly against that income. If you're being paid as an employee, you'll write off the cost of this equipment against the little bit of income that you end up collecting from your practice this year. If you're worried about being audited if you show a loss for the year, you just need to show the IRS that these were your start up costs, and that you had income in 2004 from your practice.

Second, if you can hold off purchasing these items until next year, do you think you'll earn significantly more income next year? If so, it might make sense to hold off purchasing some or all of these items to next year.

As far as deducting the purchase of these items, the new rules allow you to write off the first $100,000 of equipment and software that you purchase each year - through 2005. I can't imagine that you'll exceed that threshold in any year.

Zip Code: cpa@mdtaxes.com