The end of the year can sneak up fast, especially when you’ve been balancing full client days and holiday commitments. Before you close your books, take a moment to review a few last-minute tax deductions for therapists that could make a real difference to your bottom line.
For therapists, many of these deductions are simple adjustments, like paying an invoice early, upgrading your office setup, or contributing to your retirement plan. When it’s done right, they help you keep more of what you’ve earned and start the new year on a stronger financial footing.
Understand How Business And Personal Deductions Work Together
Before you rush into deductions, it helps to understand how business and personal write-offs fit side by side.
Your business deductions include things like rent, supplies, software or continuing education. These are claimed directly against your practice income and can reduce the taxable income from your business itself.
On your personal return, you’ll either take the standard deduction or choose to itemize things like mortgage interest and charitable donations. Whichever route you choose personally doesn’t affect your ability to claim legitimate business expenses.
In other words, you can absolutely take the standard deduction and still write off every eligible expense for your therapy practice. They’re separate buckets, and both matter.
Prepay Expenses Before December 31
Most therapists use cash-basis accounting, if that’s you, remember that you can often bring expenses forward by paying them before year-end. This reduces your taxable income for 2025, even if the benefit carries into next year.
Think about any business costs that you can comfortably prepay, say your office rent for January, professional liability insurance renewals or software subscriptions. If you’ve been planning to restock supplies or refresh your office furniture, doing it before the year ends means those expenses count for this year’s taxes.
You just need to be sure that the prepayments make sense for your cash flow, so you don’t drain your business account in December.
Upgrade Equipment Or Office Furniture
If you’ve been eyeing a new laptop or thinking of upgrading your therapy room décor, now could be the time to make it happen. The latest changes to the 2025 Tax Relief Act mean that larger purchases can qualify for Section 179 or bonus depreciation, which lets you deduct the full cost in the year you buy it, rather than spreading it over several years.
This can apply to any equipment that’s used for your business, like computers, tablets, desks, chairs, printers, or even therapeutic tools such as sand trays, sensory materials, or assessment kits. The important thing is to keep your receipts and note how each item supports your work. That documentation matters when tax time comes.
Contribute To Retirement Accounts
One of the best ways to lower your tax bill and build long-term wealth is through a retirement contribution. Therapists who are self-employed can use options like a SEP IRA, Solo 401(k) or SIMPLE IRA to accumulate wealth for their later years.
Even a modest contribution can make a noticeable dent in your taxable income. The beauty of these self-employed plans, like SEP IRAs or Solo 401(k)s is that you can often contribute after year-end, up until your tax filing deadline. But if you already know how much you’d like to put aside, getting started before December 31 helps you lock in the deduction early and gives you a clearer picture of your year-end numbers.
Deduct Insurance Premiums
Your professional insurance coverage is another deductible expense. You can write off professional liability insurance, general business coverage, and even health insurance premiums if you’re self-employed and not covered elsewhere.
If you’ve recently renewed or changed policies, double-check that your bookkeeping reflects the full annual amount. These premiums can add up, and missing them is a common oversight.
Claim Your Home Office If You Qualify
If you handle notes, billing, or admin work from home, you may be eligible for the home office deduction. Even if you see clients elsewhere, you can still claim your home office if it’s your main base for administrative work, billing, or telehealth sessions.
The space doesn’t have to be fancy, but it must be used regularly and exclusively for business. You can deduct a portion of your household costs, like rent, utilities, internet, and cleanin,g that correspond to the space you use.
The IRS gives you two ways to calculate it:
- Simplified method: You can claim $5 per square foot, up to 300 square feet, so a maximum of $1,500 per year.
- Actual expense method: You calculate what percentage of your home is used for business (say, a 10×10 room in a 1,000-square-foot home = 10%), then apply that percentage to your eligible costs like rent, utilities, insurance, and repairs.
Most therapists start with the simplified method because it’s easy and doesn’t require detailed records. But if your dedicated space is larger or your home costs are higher, the actual-expense method could give you a bigger deduction.
Either way, keep a photo of your office setup and note the dimensions as small details like that make it easy to substantiate the deduction later, if needed.
Count Continuing Education And Supervision Costs
Therapists spend a lot on continuing education, and those costs are deductible. Conference fees, online courses, supervision hours, and even professional journals count as ordinary business expenses.
If you traveled for a workshop or training, you can also include related travel costs such as airfare, hotel stays, or mileage. Just make sure the education relates directly to maintaining or improving your skills, rather than qualifying you for a new profession.
Don’t Forget Therapy Supplies And Client Materials
The small things you use every week, like art supplies, therapy games, or sensory tools, are all part of doing business. Many therapists also purchase books or resources for clients or décor to create a calm, professional space.
Individually, these may seem minor, but together they can represent a meaningful deduction. Review your receipts and online orders to make sure none of these everyday purchases slipped through the cracks.
Include Marketing And Practice Growth Costs
Your website, Psychology Today listing, online ads, and branding materials all count as legitimate business expenses. The same goes for photography, social media design or even a consultant helping you improve your marketing.
If you invested in these areas this year, capture the full amount. They’re the foundation of keeping your caseload steady and your practice visible.
Capture Professional Help And Administrative Support
If you’ve paid a virtual assistant, bookkeeper or billing specialist, those costs are deductible too. The same applies to fees for legal or accounting services. Many therapists outsource these tasks to free up time for client work, and every dollar spent here is a legitimate business cost.
Travel, Mileage, And Everyday Operations
If you travel between multiple offices, visit clients off-site or attend conferences, you can deduct mileage or travel expenses. Remember to keep a simple log with dates, destinations and purpose.
Other overlooked deductions include bank fees, credit card processing charges, postage and even cleaning services for your office. These small operational costs are easy to forget, but they count.
Need Tailored Advice On Last Minute Tax Deductions?
A thoughtful year-end review helps ensure no deduction goes unclaimed and no opportunity is missed. If the process feels overwhelming, that’s exactly where we come in.
At Traktion Accounting, we specialize in helping therapists simplify their finances, maximize deductions, and plan confidently for the year ahead. Whether you need help with bookkeeping, tax preparatio,n or big-picture financial strategy, we’ll meet you where you are and help you finish the year strong.
Schedule an introductory call with our team today, and we’ll walk through your next steps together.