#Tax deduction independent contractor expenses professional

Some additional examples include subscriptions to trade or professional publications, books tailored to your industry, and transportation expenses to and from any classes.īusiness Continued Education What many therapists in private practice don’t know is that continuing your education related to running your business are costs that can be written off. Therapists are constantly learning! Many people choose to continue their education by attending courses, workshops, and conferences to further improve their therapeutic skills (CEUs).

Any licensure is deductible as well, although only eligible for a tax deduction as a renewal.Ĭontinuing Education.

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Charges like interest, checking account fees and credit card processing fees can be written off.īusiness meals. Any meal purchased related to your business, such as a lunch meeting with a client or consultant, can be eligible for tax deduction.īusiness registration and license fees. This is particularly important if you're new to private practice this year you'll be able to write off a lot of the startup business costs. If you do, you can deduct all those pesky bank and credit card charges, including annual fees, service charges, transfer fees, and overdraft fees.

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This can include anything tangible, like business cards or brochures, to joining an online directory (like Inclusive Therapists or Mental Health Match, use code CXN1628M9Z to get 6 months free!), posting online advertisements, using embedded quizzes for lead generation (like Interact) or email marketing services (LIndsay says, “I like FloDesk! Use this link for 50% off the subscription cost”).Īssociation and membership fees. If you belong to any professional organizations such as the APA or NASW, these expenses can be deductible.īank charges and fees. It's important to keep your business accounts separate from your personal ones. Here are some common therapist tax deductions to be aware of as you embark as your journey as a therapist, small business or private practice owner.Īdvertising, marketing, and promotions. How do you market yourself as a therapist? The dollars you put into promoting yourself are deductible. Keeping your business and personal bank accounts separately also contributes to this. When running your own therapy business, it's important to learn which of your expenses are tax-deductible so you can save money when it's time to pay taxes. You'll see the words 'write-off,' 'tax deduction,' and 'deductible' used interchangeably in this blog. Essentially, you're telling the IRS, 'I made x amount this year, but already spent y amount on the upkeep on my business.' Subtract y from x, and you pay income tax on what's left. There are a variety of common business expenses that you can take deductions for in order to save at the end of the year.Ī tax deduction does not mean something is free. Tax deductions lower the amount of income you are taxed on, therefore lowering the amount of money you’ll owe at year-end. You subtract these costs from your income for the year and are taxed on the remainder. When you take a deduction on your tax return, you are “writing off” costs that you have already paid towards your business. Getting a solid understanding of tax deductions and maximizing them can help your business and save you hundreds or thousands of dollars! What Are Tax Deductions for Therapists? Completely understandable––but deductions should be the opposite of scary. Maybe anything with the word tax in it makes your eyes glaze over. One of the first steps to being financially savvy as a mental health therapist is to understand tax deductions. Just like with any other facet of life, financial growth is a learning process.

#Tax deduction independent contractor expenses full

You're technically a small business owner––shouldn't you have a good grasp of handling your taxes? Will you manage to file them accurately this year? How will you find the time when you have a full caseload of clients? And, maybe the most stressful question of all: how much will you owe the IRS?ĭiscomfort and guilt around finances are completely natural, especially when money matters aren't covered in your grad program. It may feel like your finances are looming over your head.

Guest Blog Post by Sarita Gulati | Updated February 14, 2022Īs a private practice therapist, the thought of tax season can stir up a lot of feelings.