5 Proven Tax Strategies for Therapists in Private Practice

As someone who works exclusively with private practice owners, I’ve seen firsthand the unique challenges you face when it comes to managing taxes. Over the years, I’ve identified strategies that are particularly effective for private practices like yours.

Here are my top five tax strategies designed specifically with private practice owners in mind:

1. Diligent Bookkeeping: Accurate and up-to-date records form the foundation of effective tax management. Good bookkeeping not only simplifies tax filing but ensures you don’t miss out on eligible deductions. Using digital tools or partnering with a professional bookkeeper can save you time and headaches while keeping your financial records precise.

2. Quarterly Estimated Taxes: Making quarterly estimated tax payments is crucial for staying ahead of your tax obligations and avoiding penalties. This approach lets you spread tax expenses throughout the year instead of facing a large bill during tax season. I can assist with calculating these payments to ensure they align with your earnings and cash flow.

3. Hiring Your Children: Did you know employing your kids can be a win-win? This strategy allows you to reduce your taxable income by shifting some earnings to your children, who likely fall under a lower tax bracket. Plus, it’s a great way to involve them in your practice and teach valuable money management skills. Just make sure their roles are age-appropriate and comply with labor laws.

4. Retirement Planning: Contributing to retirement accounts, such as an IRA or 401(k), not only secures your future but also provides immediate tax benefits. Many private practice owners find that setting up a defined benefit plan further maximizes their retirement contributions and offers significant tax savings. Retirement planning tailored to your situation ensures you’re optimizing this critical strategy.

5. S-Corp Election: For private practices structured as sole proprietorships or LLCs, electing S-Corp status can lead to noticeable tax savings. This approach allows you to split your income into a reasonable salary and distributions, reducing the portion subject to self-employment taxes. It's a strategy I’ve seen work exceptionally well for private practice owners.

These strategies aren’t just general tax tips—they’re handpicked and tailored to the needs of private practice owners like yourself. However, implementing them requires careful planning to ensure compliance with tax laws and to maximize their benefits.

Schedule a free 15-minute strategy session to learn how I can help implement this strategy seamlessly for you. I'm accepting new clients through 08/31/25 and hope to hear from you before the cutoff.

Best wishes,

Jeanette Andrada, MBA, EA

Private Practice Tax Strategist

IRS Enrolled Agent