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Hey therapist,
When it comes to filing your taxes, it can be easy to make costly mistakes. In this blog post, we will discuss three common tax mistakes my therapy clients made prior to working with me.
Not Keeping Accurate Records One of the most common tax mistakes made by therapists is not keeping accurate records. Without proper documentation, it can be challenging to prove expenses and deductions, potentially leading to an audit or penalties. It is essential to keep track of expenses such as office rent, utilities, and office supplies, as well as mileage and travel expenses related to your work as a therapist.
To avoid this mistake, keep detailed records of all expenses related to your practice. You can use software or apps to track mileage, scan receipts, and manage your expenses. Keeping a logbook of your business trips and documenting the purpose of the trip can also help you avoid any issues in the future.
Missing Deductions Another common tax mistake made by therapists is missing deductions. Deductions can significantly reduce your taxable income, potentially saving you thousands of dollars on your tax bill. However, many therapists miss out on deductions because they are not aware of what they can claim or do not have the necessary documentation.
The most common deductions for therapists include rent or mortgage payments, office utilities, office supplies, and professional development costs. You can also deduct travel expenses related to your work as a therapist, such as mileage, lodging, and meals.
To avoid missing deductions, educate yourself on what you can claim as a therapist. Keep accurate records of all expenses and work with a tax professional or accountant to ensure you are maximizing your deductions.
Mixing Personal and Business Expenses Mixing personal and business expenses is another common tax mistake made by therapists. It can be tempting to use your business account for personal expenses, but this can lead to confusion and potential tax issues. Mixing expenses can also make it challenging to prove deductions and expenses to the IRS.
To avoid this mistake, keep your personal and business expenses separate. Have a separate bank account and credit card for your business, and only use them for business-related expenses. This will make it easier to track your expenses and ensure you are not mixing personal and business expenses.
What should you do next? We help our clients avoid these common tax mistakes to save time, money, and stress. We do this by keeping accurate records, educating our clients, and preventing more mistakes not mentioned here.
Working with us can also help ensure you are maximizing your deductions and avoiding any potential tax issues.
The first step is to book some time with us so we can come up with a custom plan to help with your business taxes and accounting. By taking this step, you can start focusing on what you do best - helping others achieve their goals and maintain their mental health.
- Jeanette
Schedule your FREE 15-minute strategy session today! --->> www.jeanetteandrada.com/strategysession
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