Maximizing Tax Deductions for Your Private Practice: What You Need to Know Before Tax Season
As tax season approaches, now is the perfect time to ensure you’re maximizing all the deductions available to you as a private practice owner. If you’ve been unsure about what counts as a deduction or how to get organized, don’t worry—I’ve got you covered!
Below is a list of deductions you may not have thought of, along with actionable steps to prepare yourself for tax time.
1. Home Office Expenses 🏡
What You Can Deduct: If you work from home, you can deduct a portion of your rent, utilities, and even your internet bill. The key is that the space needs to be used exclusively for your business.
The IRS offers 2 methods for deducting; the simplified and regular option. Read about them here.
Action Step: Based on which option you choose, you can deduct $5/square foot (up to 300 square feet) or the actual expenses that are apportioned to your home office by dividing the expenses between your home/work based on a percentage.
2. Marketing & Advertising 📢
What You Can Deduct: Spending money on SEO services, Google ads, Facebook ads, or website creation? These expenses are fully deductible as business-related costs.
Action Step: Go through your receipts, credit card, and bank statements and mark any marketing costs. Keep digital copies stored for easy access. For 2025, start a new electronics receipt file on your computer and make sure to save EVERYTHING (once you get in the habit of monthly going through receipts, it’s not that bad).
3. Professional Development 📚
What You Can Deduct: Did you take an online course or attend a therapy workshop this year? You can deduct costs associated with maintaining or improving your skills.
Action Step: Keep a log of any conferences or courses you’ve attended this year, along with related expenses like travel and meals. If you drove to these events, see “Travel Expenses & Mileage” below!
4. Software & Subscriptions 💻
What You Can Deduct: Monthly payments for tools like your EHR, HIPAA-compliant telehealth software, and even Canva Pro for creating social media content are deductible.
Action Step: Review your credit card statements for recurring subscription services related to your practice and make sure to save down a copy of your receipts. Most of these monthly subscriptions keep a log of all your monthly billing statements in your account settings.
5. Travel Expenses & Mileage 🚗
What You Can Deduct: Whether you travel for client meetings or professional development, the miles, tolls, and parking fees can be deducted.
Action Step: Use a mileage tracker app to keep a record of trips made for business purposes. If you had business related travel and miles expenses in 2024, use Google maps to determine the accurate miles and keep a log. For tax year 2023, the deduction was 65.5 cents per mile! That adds up!
6. Miscellaneous Business Expenses 🛠
What You Can Deduct: Office supplies, liability insurance, and legal fees related to setting up your business are all tax-deductible.
Action Step: Go through your receipts and note any expenses related to setting up or maintaining your business, even if they seem small! Even your license renewal fees are deductible :)
The above are just SOME of the commonly overlooked tax deductions. But to make sure you are maximizing your deductions, download my FREE handy guide of common tax deductions for therapists.
Need Help Getting Organized for Tax Season?
Now is the perfect time to start gathering your receipts, going through your expenses, and organizing everything for tax season. The earlier you get started, the easier it will be! Use tools like QuickBooks, your bank, or even a simple Excel sheet to track and categorize your deductions.
Ready for more help? If you’re feeling overwhelmed or unsure about your tax deductions, let’s chat! Book a free 15-minute consultation to see how I can help you get set for tax season!
