These are the questions therapists and group practice owners actually ask us on calls. If yours isn’t here, get in touch and we’ll answer it directly.
Do I really need an accountant who specializes in therapy practices?
Not always, and we’ll say so if that’s the honest answer for where you are. What a specialist saves you is the explaining. We already know how insurance reimbursement lands, why your EHR deposits don’t match your session count, and what changes when you bring on your first clinician.
What if I’m just starting out and not sure I need a full engagement?
Then you probably don’t need one yet. If your practice is in its first year and your finances are still straightforward, a competent local CPA who handles your return is a legitimate answer, and we’d rather tell you that than sell you something you’ll outgrow into later. If you do outgrow it, catch-up bookkeeping takes us a few weeks.
When does electing S-corp status make sense for a private practice?
It depends on your profit, your state, and whether you’re ready to run payroll. The election adds real administrative work, so we look at your numbers before recommending it. Our guide on when to elect S-corp status walks through how we assess it, and our S-corp tax calculator gives you a first look at your own situation.
I missed the S-corp election deadline. Is it too late?
Often it isn’t. The IRS allows late elections in defined circumstances, and the relief is requested on the same form as the original election. The IRS explains the form and its filing rules on its About Form 2553 page. We cover what the process looks like in practice in our post on filing a late S-corp election.
How do you determine reasonable salary versus distributions?
An S-corp owner who works in the business has to be paid reasonable compensation for that work before taking distributions, and the IRS sets out the expectation in its guidance on S-corporation employees, shareholders and corporate officers. For therapists we look at what your clinical and administrative work would cost to replace, your caseload, and what comparable roles pay in your market. Our reasonable compensation guide goes deeper.
Do I owe tax in another state if I see telehealth clients there?
Possibly. Where your client sits during a session can create a filing obligation in that state, and the rules differ state by state. Getting licensed in a second state is usually the point where this becomes worth reviewing. See multi-state tax for therapists.
Should my associate clinicians be W-2 employees or 1099 contractors?
The answer comes from how much control you have over their work, not from what other practices in your area do. The IRS sets out the test in its guidance on independent contractor versus employee status, and misclassification is expensive to unwind. We work through it with you before you hire, and our post on the first 90 days after your first W-2 clinician covers what changes once you do.
Do you handle estimated tax payments?
Yes, and it’s one of the most common reasons therapists come to us. We calculate what you owe, tell you when it’s due, and adjust as your income moves through the year. The IRS explains the underlying obligation on its estimated taxes page, and we cover the practical side in our estimated tax deadlines guide.
What does working with Traktion actually look like month to month?
We keep your books current, send you financial reports you can read, and check in regularly rather than waiting for tax season. Once your accounts are connected, what we need from you each month is usually very little. When we do need something, we ask for it specifically instead of sending you a checklist.
Can you take over books that are behind?
Yes. Catch-up bookkeeping is common in private practice and it usually takes us a few weeks. Arriving mid-year with a messy year behind you is normal, not a problem.
We already have someone doing our books. Do we still need therapy-specific bookkeeping?
It depends on what you want out of the numbers. General bookkeeping tells you what you spent. A therapy-specific chart of accounts tells you your revenue per clinician, your overhead per session, and whether an associate is actually profitable. Our chart of accounts template for therapists shows the difference.
Do you offer financial advising or retirement planning?
We’re an accounting and tax firm, so we don’t sell investments or manage portfolios. We do handle the business side of retirement decisions, including which plan structures fit a private practice and how contributions interact with your practice income. For investment advice we’ll point you to an advisor.
What software do you use?
We build most therapy practices on Xero, and we explain the reasoning in why we recommend Xero for therapists. If you’re already on QuickBooks and it’s working, we can work there too.
How does your pricing work?
We charge a fixed monthly fee. Hourly billing makes our inefficiency your problem, and we don’t think that’s fair. Some months the work takes longer, some months less, and that variability is ours to manage. You know your number every month.