Electing S Corporation status can be a smart move for therapists in private practice looking to save on taxes. By passing income directly to shareholders, an S Corporation helps avoid double taxation. However, it’s essential to navigate the risks involved carefully. Here’s what you need to know to ensure your S Corporation stays compliant and…

Believe it or not, we’re already more than halfway through 2024! As the year progresses, it’s crucial for therapists in private practice to start planning for next year’s taxes. Waiting until the last minute can lead to unwelcome surprises, but proactive tax planning helps you manage your financial situation effectively. Why Do Last-Minute Tax Surprises…

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…

Are you a therapist in private practice looking to enhance your financial acumen and protect your personal assets? An S Corporation (S Corp) could be an ideal choice for your business structure. This guide will educate you on the essentials of S Corporations, including how they work, their requirements, and the benefits and drawbacks to…

As a therapist running a private practice from your home, understanding how to maximize your home office deduction is vital for reducing your tax liability. Whether you work exclusively from home, have another office, or are a W-2 employee working remotely, knowing the IRS rules and properly tracking expenses is key. This guide will help…