As a private practice practitioner, financial concerns can often feel overwhelming. You might worry about accurately filing your taxes, finding time for paperwork amid a busy schedule, and—perhaps most stressfully—determining how much you will owe the IRS.
Fortunately, dealing with private practice taxes also offers opportunities to take advantage of tax expenses and write-offs. While this can initially seem daunting both emotionally and financially, understanding tax expenses can actually be beneficial and potentially save your business hundreds or even thousands of dollars.
What are tax expenses?
When you run your own small business, such as a practice, you are able to deduct or “write off” business-related expenses from your income to account for the costs that you typically spend to run your business. You are then taxed on the remainder at your usual income tax rate.
To keep things simple, you are saying to the IRS, “I made x amount of money this year, but I already spent y amount to run and grow my business.” X-Y = the amount you’ll pay income tax on.
Common Tax Expenses for Health and Wellness practitioners
Here are some common tax expenses to be aware of, especially for those just starting out in private practice:
Advertising and Marketing
Any costs associated with marketing your business. For health and wellness practitioners, this often translates to the costs associated with your website, including domain hosting, website design, and any graphic designers you outsource to help promote your practice. Advertising costs can also include expenses for tangible products, such as print advertisements or business cards.
Business Meals
When you purchase a meal for business-related purposes, you can write this off as a tax expense. Typically, this would be for work, such as a meeting with a co-worker, a consultant, or a lunch with a client. Late-night meal deliveries, when you’re off the clock, don’t count!
Bank Fees
Pesky bank fees can definitely add up when you are running your own business and operating separate bank accounts for your business checking and savings. Account fees, interest, and credit card processing fees can all be tax-deductible.
Vehicle Use For Business
If you use your car for business-related purposes outside your regular commute, your mileage may be deductible, along with general car maintenance expenses. To actually use this expense, you will need to keep a close track of the business miles you drive each year. These miles must be out of the standard commute between your home and work if you are a commuter.
You can use two specific methods here to calculate what from your vehicle use is tax deductible:
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Standard mileage rate – First, multiply the number of miles you’ve driven for business purposes only by the IRS’ standard mileage rate. Note: the mileage rate is adjusted each year to keep up with inflation.
- For 2025, the mileage rate is ¢70 per mile.
- Actual Expense – You’ll first need to determine the actual full cost of operating your vehicle, including license, registration, gas, oil, and maintenance. You’ll then multiply this cost by the percentage of miles driven for business use on your car.
Membership Fees
If you belong to any professional organizations, such as the APA, these expenses can also be deductible.
Continuing Education
Many practitioners choose to continue their education by attending courses, workshops, and conferences to further enhance their skills and learn how to effectively manage their own businesses. As long as these endeavors apply to your practice, the costs can be written off.
Office Expenses and Supplies
These can include pens, scissors, staplers, printer ink, postage, small furniture pieces, cleaning supplies–along with anything that helps you stay organized as a health and wellness practitioner.
Software Services
Any practice management software, such as TherapyNotes or SimplePractice, is deductible within this category, as it helps you to run your business smoothly and efficiently. Additionally, any other software you use to run your business, along with business software such as Google Drive, Apple storage, or Gusto, can also be written off.
Office Rent and Utilities
If you run your private practice from an office, your rent and utilities (such as phone or electricity bills) can often be written off. If you’re working out of your home or sharing utilities for business and personal use, this can get tricky, as you’ll only be able to deduct for your percentage of business usage.
Business 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. Renewal of your license can also be written off.
Travel expenses
Travel expenses can add up quickly. This includes anything used for business purposes and typically requires that you be away from your residential city for at least 24 hours. Eligible costs include mileage, meals, and parking.
Personal Psychotherapy
Are you seeing your own therapist? Money spent on personal sessions can often be deducted from your tax return, as it helps you to improve your mental health and grow in your own profession. Many accountants differ on whether this counts as a write-off; therefore, be sure to consult your financial advisor for confirmation.
Depreciation Expenses
This write-off can often be one of the more difficult ones to understand, but essentially, it covers any larger purchases over $2,500. (For practitioners, a common write-off in this category is office furniture.) You can choose to deduct these purchases from your taxes in the first year after purchase or in small increments over the years the item is used.
Maximizing Tax Expenses For Your Practice
The list goes on, with additional write-offs available for costs such as insurance, legal or professional fees, moving expenses, and salary and benefits for any private practice owners who have employees. The key to maximizing them is to keep all your business finances separate from your personal expenses. This way, when the end of the year rolls around, you’ll have all of your business expenses in one place.