A List of Common Tax Deductions for Therapists.
As a therapist in solo private practice, maximizing your tax deductions is a smart way to keep more of your hard-earned income while ensuring your business runs smoothly. To help you navigate this with confidence, here’s a handy list of common deductions tailored to your unique needs as a mental health professional. Please note that I am a therapist in private practice, not an accountant or tax preparer. This information is provided for educational purposes only and should not be considered financial or tax advice. Always consult with a qualified tax professional for guidance specific to your situation but of the psychiatrists I worked for once said “no one will look after your money like you will” so please use this education to better inform yourself on your taxes and ensure you have the right professional for you.
Office-Related Expenses
Rent: If you lease an office space, the rent is fully deductible.
Utilities: Electricity, water, heating, and internet costs for the office.
Office Supplies: Paper, pens, notebooks, file folders, and other necessary supplies.
Furniture and Equipment: Desks, chairs, filing cabinets, and therapy-specific tools (like couches or toys for play therapy).
Cleaning Services: Costs for office cleaning or janitorial services.
Professional Expenses
Continuing Education: Costs for workshops, webinars, conferences, and CE courses.
Licensing and Certification Fees: Annual license renewals and certification costs.
Professional Memberships: Membership fees for associations like the American Psychological Association (APA) or the National Association of Social Workers (NASW) or more local groups like Counseling Brothers of Atlanta or the Atlanta Group Psychotherapy Society.
Supervision or Consultation: Fees paid to a supervisor or consultant for case consultation.
Technology and Software
Electronic Health Records (EHR): Subscription fees for therapy-specific software like SimplePractice or TherapyNotes.
Telehealth Platforms: Costs for teletherapy software or video conferencing tools.
Website and Hosting: Domain registration, hosting fees, and website maintenance costs.
Marketing and Advertising: Paid social media ads, business cards, and promotional materials, directories such as Therapy Den, or Therapy for Black Girls
Business Operations
Insurance: Professional liability insurance and general business insurance
Bank Fees: Charges for business bank accounts or payment processing fees (e.g., Stripe, PayPal).
Legal and Accounting Services: Fees for hiring attorneys or accountants.
Business Coaching or Mentorship: Expenses for guidance to grow your practice including the Therapist 2 Therapist membership.
Travel and Transportation
Mileage: If you drive to meetings, conferences, or between offices, you can deduct mileage (keep a log).
Public Transportation or Rideshare: Costs for Ubers, taxis, or public transport used for business.
Travel for Work: Lodging, airfare, and meals during conferences or work-related travel.
Home Office Deduction
Dedicated Workspace: If you have a home office used exclusively for work, you can deduct a portion of your rent/mortgage, utilities, and maintenance based on square footage.
Client and Session-Related Costs
Materials for Sessions: Books, art supplies, toys, or games used in therapy.
Snacks or Beverages: If you offer them in your office for clients.
Gifts for Clients: Small gifts (e.g., under $25 per client per year).
Self-Employment Expenses
Self-Employment Tax: The employer portion of Social Security and Medicare taxes.
Retirement Contributions: Contributions to a SEP IRA, Solo 401(k), or other self-employed retirement plans.
Health Insurance Premiums: If you pay for your own health insurance, these may be deductible.
Do you have any that I have missed? If you’re a freak in the spreadsheets like I am, check out the Tax Deduction Spreadsheet Tracker I use.
