Taxes for therapists and private practice
You went to school to treat people, not to learn Schedule C. We handle the tax side, and we already understand how a practice earns and spends.
Nothing is due today. Personal returns start at $250.
Clinicians often leave agency work fluent in treatment and new to self employment tax. A private practice has moving parts that many small businesses do not: insurance panels and platform fees that make your tax forms disagree with your deposits, supervision and continuing education costs that are treated differently depending on where you are in licensure, a telehealth room at home, and records you are legally obligated to protect while still keeping honest books. We take the tax work so you can keep your attention on the caseload.
What therapists can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Clinical license and board fees
Your state license renewal, board application and renewal fees, and national credential fees are deductible business expenses, along with your professional association dues as an LPC, LCSW, LMFT, or psychologist.
Costs of qualifying for a new profession are not deductible. Renewing and maintaining a license you already hold is.
Clinical supervision and consultation
What you pay a supervisor for individual or group consultation, and consultation you buy to maintain your credential, is a business expense once you are licensed and practicing.
Supervision you paid for while working toward initial licensure is treated differently, since it relates to meeting the minimum requirements of the profession or to a period before your practice began. Bring the dates and the invoices and we will sort out which is which.
Continuing education and clinical training
CEU workshops, EMDR or IFS or Gottman certification training, conference registration, clinical books, and consultation groups count when they maintain or sharpen skills you already use in your practice.
Training that qualifies you for a new profession is not deductible. Deepening the clinical work you already do is.
Professional liability insurance
Your malpractice and professional liability premium is deductible, along with any cyber liability coverage you carry for your records system.
EHR and practice software
SimplePractice, TherapyNotes, platform fees from services like Alma or Headway, telehealth video platforms, and your HIPAA compliant email, fax, and phone service. Also the fee your card processor keeps from each client payment.
Report the gross fee you charged as income and the processor or platform fee as an expense. Reporting only what landed in your bank account understates both sides, and the totals stop matching the forms the platforms file.
Office rent and per hour room rental
Rent on your own office suite, and the hourly or half day room rental many clinicians pay inside a group practice, are both deductible. So is the share of the suite's utilities, cleaning, and internet that you pay.
Home office for telehealth
If your home is where you run the practice and you see clients by video from it, you may be able to claim that space. There is a simplified method based on square footage and a regular method that uses a share of your actual rent, utilities, insurance, and repairs.
The space has to be used regularly and exclusively for the practice. A separately identifiable part of a larger room can qualify, but only if that part has no personal use. A laptop at the kitchen table does not. The deduction is also limited by the income from your practice, so it cannot create a loss on its own.
Therapy room furnishings
Your couch and client chairs, side tables, lamps, sound machine and white noise unit at the door, rugs, art, plants, tissue boxes, and the locking cabinet for your paper records.
Play therapy and assessment materials
Sand tray supplies, play therapy figures, art materials, therapeutic games, and the workbooks or cards you use in session, plus assessment instruments and any per use protocol forms you have to buy for the tests you administer.
Items that last more than a year are capital purchases. Elections exist that may let you deduct them in the year you buy them, so keep the receipts and let us apply the treatment that fits.
Business mileage between work locations
Driving from one practice location to another, out to a school or a client home visit, to a supervision meeting, or to a CEU conference is deductible, either at the standard mileage rate published for that year or by tracking your actual vehicle costs.
The drive from home to your regular office is commuting and is not deductible, no matter how far it is. A qualifying home office can change that analysis. Which method you can use also depends on what you chose the first year the car was used in the practice, so tell us before you switch.
Marketing and referral listings
Psychology Today and other directory listings, your practice website and domain, headshots, business cards, and paid ads. Also what you pay someone to write your bio or manage your intake page.
Meals with a referral source fall under a separate rule that allows only part of the cost, entertainment is not deductible at all, and business gifts are capped per recipient per year. Keep those out of your directory and advertising totals.
Your own health insurance premium
If you are self employed, you may be able to deduct health insurance premiums for yourself, your spouse, and your dependents as an adjustment against income rather than as a Schedule C expense.
It is not allowed for any month you were eligible for coverage through your own employer or your spouse's employer, and it cannot exceed the net profit from your practice.
Once your practice profit is high enough that self employment tax on all of it is painful, and you are consistently paying yourself, an S corp election can be worth looking at. It only works if you run real payroll at a reasonable salary for a clinician in your market, and it adds filing and payroll costs, so we run your numbers first rather than recommending it in advance.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every 1099-NEC and 1099-K you received, including any from panels or platforms that look wrong or duplicated
- Your EHR income report for the year, totals only, with no client names or clinical detail
- Bank and credit card statements for the account the practice runs through
- Your license and board renewal receipts, association dues, and malpractice insurance premium
- Supervision and consultation invoices, with dates and whether you were licensed at the time
- CEU and training receipts, including certification programs and conference registration
- Office lease or room rental agreement, or the square footage of your home office plus your totals for rent or mortgage interest, utilities, and insurance
- Mileage log or app export showing drives between work locations, and the date you placed the car in service
- Receipts for furniture, equipment, and clinical materials bought for the practice, with purchase dates
- Health insurance premium statements, retirement plan contributions, and any estimated tax payments you already made
What trips people up
Reporting only the money that hit the bank account, after the platform or card processor took its cut.
Report your gross fee as income and the platform or processor fee as an expense. Pull the income report from your EHR each month and reconcile it to your deposits. Your revenue should match what you charged, not what cleared.
Writing off the daily drive from home to the office as business mileage.
Track drives to a second office, a client home visit, a school, a supervision meeting, or a CEU event. Travel between two work locations counts even when the first drive of the day does not. A qualifying home office can change the analysis for the day, so raise it with us before you claim the commute.
Claiming a home office for a room the family also uses.
Pick a defined space used only for the practice and measure it. If the room genuinely has personal use, tell us and we will claim the correct portion or leave it off. The exclusive use requirement is where this deduction is won or lost.
Running practice income and household spending through one personal account.
Open a separate business checking account and a separate card when you start seeing private clients. Clean separation from the start is far easier to work from at filing time than reconstructing a year from memory.
Setting nothing aside for taxes during a first strong year of caseload growth.
Estimate quarterly based on your real profit and any spouse income or W-2 withholding. If your caseload grows mid year, the estimate should grow with it. Paying on schedule is what keeps underpayment penalties off the return.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
I only see a handful of private pay clients on the side. Is that even a business?+
Yes, if you were paid for the work. What matters is whether you carried on the activity to make a profit, not how many hours you put in or whether you have a business name. A small caseload alongside a W-2 job is still a business, and the deductions above still apply to it. It also means your net earnings are subject to self employment tax once they pass the annual threshold, which is easy to miss in the first year.
Can I deduct my own therapy?+
Personal therapy for your own wellbeing is a medical expense, not a business expense, even though it makes you a better clinician. Consultation and supervision where a colleague is reviewing your cases and your clinical work is a business expense. The distinction is whose treatment it is. If your sessions are genuinely case consultation, describe them that way in your records and bring the invoices.
How do I keep books without putting client information at risk?+
You keep totals and categories. You do not put client names, diagnoses, dates of service, or anything from a chart into your bookkeeping. Your books show income by month and expenses by type, which is what a return needs. When we need support for a number, we work from bank and card records rather than your clinical file, and your tax information is handled under the federal confidentiality rules that apply to tax preparers.
I got a 1099-NEC from one panel, a 1099-K from Stripe, and nothing at all from my private pay clients. What do I report?+
Report the total you actually earned. Panels and platforms can issue forms that overlap, or that report gross payments before their cut, so the forms may not add up to your real revenue. We reconcile your deposits to your EHR income report and treat the platform's fee as an expense. If a form is wrong, the answer is documenting the difference, not ignoring the form.
Why did I owe so much the first year after leaving agency work?+
You are running a business now, and nobody is withholding tax from your deposits. Federal income tax plus self employment tax comes out of your own pocket, generally through quarterly estimated payments. We work out what to set aside based on your actual profit and your other household income, and we put the payment dates on your calendar so the amount is not a surprise in April.
What about the clothes I bought for the office?+
Clothing is deductible only when it is required for your work and is not suitable for everyday wear. Ordinary professional clothing fails that test even if you only ever wear it to session, and adding a practice logo does not by itself change the answer. Promotional items you give away are marketing, which is a different category.
Let us take the tax part off your plate.
Tell us what you need and see your price. A real person on your team replies within one business day.