Monthly Archives: August 2024

Tax Preparation vs. Tax Planning for Therapists: What’s the Difference? When speaking with therapy practice owners, one common reason they leave their current tax firm is the lack of proactive guidance. Many therapists are seeking ways to avoid being blindsided at tax time and optimize their finances throughout the year. The key to this is…

If you’re a therapist in California, you may already know that forming a Limited Liability Company (LLC) to provide professional services is not an option. According to California law (Section 17701.04(e) of the California Corporations Code), LLCs cannot be used to render professional services, which include therapy. This restriction makes the S Corporation (S Corp)…

As a therapist operating as an S Corporation, you’re likely aware of the tax benefits, such as avoiding double taxation. However, one critical aspect that often gets overlooked is “reasonable compensation.” The IRS requires that any shareholder providing services to their S Corporation receives fair market compensation. Failing to meet this requirement can lead to…