Graduating from nursing or medical school is an exciting milestone, but for many new healthcare professionals, tax season can quickly become a source of uncertainty. Filing taxes for the first time as a nurse or doctor in Alberta or British Columbia often involves new income structures, professional expenses, and provincial considerations that were not part of your student experience.
Understanding how your first tax return works as a healthcare professional can help you stay compliant, avoid unexpected tax bills, and start your career on solid financial footing.
Why Your First Year of Taxes Looks Different
Your first year of practice rarely follows a standard employment pattern. Many newly graduated nurses and doctors work only part of the year, take on multiple roles, or move provinces for employment. Some begin in temporary, casual, or locum positions before securing permanent roles.
These factors can complicate tax filing, particularly when income comes from more than one source or spans different provinces. It is common to receive multiple tax slips or to have income that was not taxed at source, which can affect your final tax balance.
Employment Income Versus Self-Employment Income
For most nurses in Alberta and British Columbia, income is earned as an employee, with taxes deducted directly from each paycheque. Even so, tax filing can still be more complex than expected. Shift premiums, overtime, bonuses, or working for more than one health authority can result in multiple T4 slips that must all be reported accurately.
Doctors often face a different situation early in their careers. Many newly licensed physicians work as independent contractors or locums, which means they are considered self-employed for tax purposes. In these cases, income tax is not automatically withheld, and physicians must set aside funds to cover income tax and Canada Pension Plan contributions. Depending on income levels, registration for GST may also be required, making early organization especially important.
Professional Expenses You May Be Able to Claim
New healthcare graduates often incur significant professional costs in their first year of practice. In many cases, these expenses can be claimed on your tax return, provided you meet the eligibility requirements.
Licensing and registration fees, professional association dues, malpractice insurance, and continuing education costs are commonly deductible for both nurses and doctors. Physicians who are self-employed may also be able to deduct additional expenses related to their practice. Relocation expenses may be deductible if you moved to start a new position, although specific criteria apply.
Because deduction rules vary based on employment status and province, it is important to ensure expenses are claimed correctly and supported by proper documentation.
If you moved between provinces during the year, your tax return will be based on where you were a resident on December 31, regardless of where you earned income earlier in the year.
GST Considerations for New Doctors
Most nurses do not need to register for GST. However, newly graduated doctors who are self-employed may be required to register once they exceed the small supplier threshold. This can be confusing, especially when healthcare services are involved, as not all services are treated the same for tax purposes.
Failing to register or file GST returns on time can lead to penalties, which is why early guidance is often helpful for physicians entering independent practice.
The Value of Early Tax Planning
Even in your first year of practice, proactive tax planning can make a meaningful difference. Understanding your obligations early helps you avoid surprises, stay organized, and build good financial habits as your income increases.
For physicians, early planning can also lay the groundwork for future decisions around incorporation and long-term tax strategy. For nurses, it can help ensure deductions are claimed properly and income from multiple sources is reported accurately.
How MMT Helps Newly Graduated Nurses and Doctors
MMT works with nurses and doctors across Alberta and British Columbia, providing clear, practical guidance tailored to healthcare professionals at the start of their careers. From first-time tax filings to navigating self-employment income, our team helps new graduates understand their obligations and plan confidently for the future.
If you are a newly graduated nurse or doctor and have questions about filing your taxes, contact MMT to get professional support and start your career with clarity and confidence.
