Note: This only applies to therapists who joined Heard after January 8th, 2024
Tax season can be overwhelming for therapists juggling busy schedules and complex finances. This article outlines the important bookkeeping tasks you’ll need to complete to ensure an on-time and accurate filing with Heard.
After signing up with Heard, your bookkeeper will need additional information from you to close your books for 2023. Give yourself plenty of time to complete the below tasks by their due date.
Important: The bookkeeping tasks outlined below are the first step in preparing to file your 2023 return. For a full overview of required tasks and their deadlines, please see the following articles:
For Sole Proprietors filing their 2023 taxes with Heard, if any of these bookkeeping tasks are not completed by their due date, we’ll be required to file an extension on your behalf. The deadline to complete the bookkeeping tasks outlined below is February 15th, 2024.
Complete your 2023 catch-up bookkeeping
To complete your monthly bookkeeping for 2023, we’ll need to you confirm a few details about the nature of your accounts and provide all bank statements for all months available.
Bank Account Information
- Make sure that all of your business accounts are connected to Heard via Plaid. If you’ve made purchases or received income for your business through a personal account, you do not need to connect your personal account to Heard.
- Respond to your bookkeeper in Conversations. You should have received a message asking for additional information about the accounts you have connected to the Heard platform. We’ll need to know:
- If your accounts are exclusively used for business
- If there are any personal expenses in your business accounts that we should be aware of
- The earliest transaction date for each account in 2023. If your business account was opened prior to January 1, 2023, the earliest date will be January 1st.
Upload your 2023 bank statements and transactions
- To complete your monthly bookkeeping, we’ll need a copy of your bank statements for each month the bank account was open in 2023. You can upload these by navigating to Your Business > Documents > Statements. Please select the appropriate month and account for each statement uploaded.
- If you made purchases or received income in a personal account, we do not need these statements or bank accounts connected to Heard. Instead, you can add these transactions by navigating to Your Business > Transactions > Add Transactions
- For individual transactions, add the transaction date, amount, and description. All expenses should have a minus sign (-) before the amount to be reflected as an expense.
- For multiple transactions, click the Add Multiple Transactions button to download a template for sharing multiple transactions with your bookkeeper
Complete your 2023 year-end bookkeeping
To complete an annual reconciliation of your accounts, Heard will request several reports to make year-end adjustments to your books. This ensures your Profit and Loss Statement more accurately reflects your true income and expenses.
Merchant Fee Adjustments
- If you accept payment via a credit card payment processor connected to your EHR (e.g. Stripe, Square, etc), the credit card payment processor automatically deducts their fees from your therapy income. This means that if you made $100 with $5 in fees, $95 of therapy income is automatically deposited into your bank account. The $95 in revenue is recorded in your books since we have a journal entry for the deposit, but the $5 in fees you paid aren't automatically recorded as an expense since they're deducted before the revenue hits your books.
- To accurately reflect the fees you've paid in the year, we will need a report that shows the amount of processing fees your credit card payment processor withheld during 2023. The name of this report may vary depending on your EHR or credit card processor.
- If you earn income in December and the credit card processor deposits the income into your bank account in January, it would be reported in the wrong tax year without adjustment. We need to reflect the correct amounts of income in the right tax year.
- The report you generate for the Merchant Fee Report will generally also provide the necessary information for adjusting your December income.
- Form W-3 is a coversheet for all of the W-2s issued through a payroll provider. If you pay yourself or employees through a payroll provider, we will need this form to correctly reflect all wages and payroll taxes paid in 2023. If you pay yourself solely through withdrawals from your business account, you do not need to provide this form.
- Please note: If you have enrolled in Heard Embedded Payroll with Gusto or use Gusto and have given Heard admin access to your Gusto account, we will upload this form on your behalf
Contractor Payment Report
- If you use a payroll provider to pay contractors, you’ll need to provide a report that shows each payment you have disbursed to a contractor through the payroll provider.
- If you pay contractors through PayPal, Vemo, Check, etc., you do not need to provide this report.
See Obtaining and uploading year-end documents for more on why each of these individual documents is requested, how you can obtain it, and where to upload it within Heard.