Every Tax Write-Off for Therapists in 2025

If you’re only thinking about tax deductions when April rolls around, you’re likely leaving money on the table. 

The best way to lower your tax bill isn’t by scrambling to find receipts at the last minute—it’s by keeping track of expenses all year long.

You have plenty of expenses that qualify as tax write-off for therapists, but the IRS won’t just assume you spent money on your business. You need to track everything, categorize it correctly, and be ready to back it up if necessary. 

Let’s walk through the main deductions you should be thinking about throughout 2025 to make tax season easier and more profitable for your practice.

Therapy Supplies and Materials

Any supplies you purchase specifically for your therapy practice can be deducted as business expenses. But the IRS has rules: the expense must be both ordinary (common in your field) and necessary (essential to running your practice).

What does this include?

• Office supplies like notebooks, pens, whiteboards, and sticky notes
• Client worksheets, intake forms, and treatment plan templates
• Therapy-specific tools like art supplies, sensory toys, fidget tools, and therapeutic games
• Digital resources such as workbooks and guided meditation downloads

The full cost of these supplies is deductible in the year you buy them, so if you know you’ll need them, consider stocking up before December 31 to maximize deductions for that tax year.

What isn’t deductible? Personal items or decor. That stylish couch in your waiting room might make your office more inviting, but unless it’s a specialty therapy tool (like a weighted blanket for sensory work), it doesn’t count.

Tracking This Deduction

• Save every receipt and label expenses properly in accounting software or a spreadsheet.
• If you use a personal credit card for business purchases, highlight business expenses on the statement.
• If you’re ever unsure whether an item qualifies, ask your accountant—better to check in advance than risk losing a deduction later.

Home Office Deduction

If you run your therapy practice from home—whether full-time or just for telehealth sessions—you may qualify for the home office deduction. But there’s a catch: the space must be used exclusively for business. If your home office doubles as a guest room or personal workspace, it likely won’t qualify.

There are two ways to calculate this deduction:

1. The Simplified Method – Deduct $5 per square foot of your office space, up to 300 square feet. This means a max deduction of $1,500 per year if your office is at least 300 square feet.
2. The Actual Expense Method – Deduct a percentage of your rent/mortgage, utilities, property taxes, and home maintenance based on the square footage of your office relative to your entire home.

For example, if your home is 2,000 square feet and your office is 200 square feet (10% of the home), you can deduct 10% of qualifying expenses like rent, electricity, and internet.

Tracking This Deduction

• Keep a floor plan with measurements of your office space.
• Save bills for rent, utilities, and home maintenance.
• If using the actual expense method, consult an accountant to ensure accurate calculations.

Professional Services

Running a therapy practice means working with other professionals—accountants, bookkeepers, legal advisors, and business consultants. The good news? These costs are fully deductible.

This includes:

• Accounting, bookkeeping, and tax preparation fees
• Legal fees for reviewing contracts or setting up your business
• Consulting fees for business coaching, marketing strategy, or practice growth

One thing to watch out for: personal expenses don’t count. If you pay a financial planner to manage your personal investments, that’s not deductible. But hiring an accountant to handle your business taxes? That’s fully deductible.

Tracking This Deduction

• Keep invoices and payment records for all professional services.
• If you bundle business and personal financial services, ask for an itemized invoice to separate deductible expenses.

Practice Management Software

If you use software to run your practice, it’s deductible as a business expense. This includes:

• Electronic Health Records (EHR) systems like SimplePractice or TherapyNotes
• Scheduling and billing platforms
• HIPAA-compliant telehealth and messaging tools
• Digital intake forms and progress note applications

Since most of these tools are subscription-based, you can deduct the monthly or annual fees. But if you use a free version, you can’t deduct anything—only the amount you actually pay qualifies.

Tracking This Deduction

• Keep records of subscription fees and payment confirmations.
• If you prepay for a full year, deduct the full amount in the year it was paid.

Continuing Education and Licensing

Staying licensed and up-to-date in your field is part of being a therapist, and the costs involved are deductible.

This includes:

• Licensing and renewal fees
• Board certification costs
• Continuing education courses, workshops, and seminars
• Professional books and training materials
• Membership fees for organizations like the American Counseling Association (ACA) or NASW

There’s no limit to how much you can deduct here, as long as the expenses are related to maintaining or improving your current skills. However, training for a new career isn’t deductible. If you’re a licensed therapist taking a class to become a yoga instructor, that wouldn’t count.

Tracking This Deduction

• Save registration receipts and invoices for courses and conferences.
• If you travel for an in-person event, track transportation and lodging costs (which may also be deductible).

Insurance Premiums

Running a therapy practice comes with risks, which is why many therapists carry professional liability insurance. The premiums you pay for business-related insurance policies are fully deductible.

This includes:

• Professional liability insurance (malpractice insurance)
• General business insurance (protects against property damage or legal claims)
• Cyber liability insurance (if you store digital client records)

If you’re self-employed and pay for your own health insurance, you may also be able to deduct your health insurance premiums. However, this deduction is limited to the amount of your business’s net income—so if your practice has a loss, you won’t be able to deduct health insurance costs that year.

Tracking This Deduction

• Keep copies of policy agreements and premium payments.
• If bundling insurance policies, get a breakdown of business-related vs. personal coverage.

Additional Tax Write-Offs to Include:

While we’ve already covered most of the major deductions you should be thinking about, there are several more to have on your radar throughout this year:

1. Rent for Office Space – If you lease an office, the rent is fully deductible.
2. Office Utilities & Internet – If you rent an office, utilities like electricity, water, internet, and phone services for your practice are deductible.
3. Marketing & Advertising – Website hosting, business cards, Google Ads, social media promotions, and any other marketing costs are deductible.
4. Phone & Internet (Business Portion) – If you use your personal phone and internet for work, you can deduct the business percentage of your bill.
5. Travel for Business – If you attend a conference, training, or travel to a business meeting, flights, hotels, meals (50%), and ground transportation are deductible.
6. Client Amenities – If you offer water, coffee, or snacks for clients, those can be written off as business expenses.
7. Vehicle Expenses (if applicable) – If you drive to client sessions or business-related meetings, you can deduct mileage or actual car expenses (gas, maintenance, etc.).
8. Depreciation on Equipment – If you purchase expensive equipment (like a laptop or office furniture), you might depreciate it over multiple years instead of taking the full deduction at once.
9. Bank Fees & Payment Processing Fees – Fees from credit card processors (Stripe, Square, PayPal), business bank accounts, and loans can be deducted.

Make Tax Season Easier by Tracking Expenses Year-Round

The easiest way to make tax season less stressful?

Don’t wait until the last minute. Start tracking your deductions now, while expenses are fresh in your mind. 

Whether you use an accounting app, a spreadsheet, or a bookkeeper, keeping organized records will help you maximize your deductions and avoid any IRS headaches.

That’s where Traktion Accounting comes in. 

We help therapists stay on top of their tax deductions all year long—so when tax season rolls around, you know exactly what you can write off and how much you’re saving.

Want to make sure you’re not overpaying on taxes this year? Reach out to us today. Simply use the calendar down below to book an introductory call. 

Our team is always here to help. Until next time!