Welcome therapists and group practice owners! I’m Nicole McCance, a psychologist turned business coach for therapists. I recently sat down with Julie Herres, an accountant for therapists and founder of Green Oak Accounting, on the Business Savvy Therapist podcast to talk about tax write offs for therapists. This is one of the most-asked questions in my coaching program, so I wanted to break down the key takeaways here, because there are a lot of misconceptions about what you can and can’t deduct.
Julie’s firm has worked with hundreds of therapists, so she’s seen under the hood of what works and what doesn’t. A quick note for my Canadian listeners: Julie is U.S. based, but the principles still apply. Just double check with your accountant!
P.S. Not a huge fan of reading blogs? (I’m more of a podcast girl myself.) You can listen to my podcast episode all about this topic by clicking here!
What Does a Tax Write Off Actually Mean for Therapists?
Julie started by clearing up the biggest misconception she sees: a tax write off doesn’t mean the item is free. Here’s how it actually works.
If your practice brings in $200,000 a year, that’s your gross income. You subtract your deductible business expenses, and what’s left is your profit, which is what you actually pay taxes on.
So if you had $100,000 in expenses, you’re paying taxes on the remaining $100,000.
Julie put it simply.
If you’re spending $1,000 on something you don’t actually need just to save maybe $250 in tax, you’d be better off paying the $250 and keeping $750 in your pocket. Take every deduction available to you, absolutely, but don’t spend just to reduce your tax.
What Can Therapists Write Off?
The IRS rule is that a business expense must be ordinary and necessary, meaning it’s commonly accepted in your trade and helpful for your business. You could technically run a practice without Google Ads, but advertising is common in the industry, so it’s fully deductible.
Here are the clear-cut deductions for therapists:
- Continuing education and CEs are very straightforward, as long as they’re relevant to your current trade (a course on accounting for business owners would count, but training to become an accountant would not)
- Business coaching that’s relevant to running your practice
- Marketing and advertising, including Google Ads, your website, and SEO
- Office supplies, furniture, and equipment
- Practice management software
- Professional liability insurance
Most things fall pretty neatly into deductible or not, but the grey area is usually around how far removed something is from your core trade.
Hot Tip: The Clinic Growth Map™ is officially CE-certified for over 20 CE hours! Meaning that it’s approved by the CPA for Canadian Psychologists and the NBCC for American therapists.
Can Therapists Deduct a Home Office?
If you’re running your practice from home (and a lot of us are with virtual sessions), you can take a home office deduction, but only if you have a space that’s exclusively used for business.
AKA: A real home office with a door you close, not just a desk in the corner of your bedroom.
Julie recommends taking photos of your home office and documenting the square footage. You’ll calculate what percentage of your home the office takes up, and that’s the percentage you can deduct for mortgage interest, utilities, and even a portion of your cleaning costs.
One thing that came up in our chat: if you have a cottage where you also work, you can only claim one home office, not both.
But Julie shared an alternative called the Augusta loophole, where you can rent your property to yourself for up to 14 days per year for board meetings and that income is tax free. You just need documentation like meeting minutes and comparable hotel rates.
What About Mileage, Travel, and Business Trips?
If you’re driving between offices, running errands for your practice, or heading to a networking event, you can deduct that mileage.
For 2026, the rate is $0.725 per mile, and that covers gas, maintenance, and depreciation. Julie uses an app called Mile IQ where she swipes left for personal and right for business once a month, and even without driving a ton for work, it adds up to over $1,000 in deductions per year.
The tricky part is mixed-purpose travel. Julie explained that what matters is the substance of the trip. If you’re travelling primarily for a business event and spend an extra day visiting family, the trip is still deductible (minus that one personal night of hotel). But if you’re going to Disney with your family and attending a one-hour CE to try to make it deductible, that won’t work. The CE itself would be deductible, but it doesn’t make the whole trip a business expense. (Please don’t guess on this one!)
3 Things Therapists Can't Write Off
- Clothing you could wear outside of work, even if you wouldn’t. That blazer for your family doctor meeting? Not deductible. But a polo with your practice logo on it counts as advertising.
- Personal health expenses like glasses or hearing aids. You’d need those whether you were in business or not, so they’re personal.
- Political contributions. Non-deductible, full stop.
Why Every Therapist Needs a Good Accountant
Julie said something I really appreciated. She likes to align with clients who share her risk tolerance. Some accountants will get creative and push boundaries that aren’t actually true.
Julie’s approach is to take every deduction available but never get overly aggressive. (Her words: “I don’t look good in orange. I’m not going to jail for anyone.”)
Audit rates in the U.S. are currently under 1%, but if it happens and you don’t have proper documentation, the deduction gets thrown out and you owe the tax, interest, and penalties. The IRS considers it your responsibility as a business owner to know the rules, so “I didn’t know” won’t get you out of it.
Numbers are not our thing as therapists, and there are little nuances we might think make sense but don’t hold up. Give it all to a good accountant, let them find the deductions, and sleep well knowing it was done right.
Keep More of What You Earn in Your Therapy Practice
Knowing what you can and can’t deduct is one of the simplest ways to keep more of what your practice earns. Start with the basics: track your mileage, document your home office, and make sure your continuing education and coaching expenses are on your return.
If you don’t have an accountant who specialises in working with therapists, Julie’s team at Green Oak Accounting offers free consultations.
Want more strategies for growing your therapy practice? Follow me on Instagram and listen to the Business Savvy Therapist podcast for strategies and real talk about scaling a 7-figure group practice without burning out.
Your Business Bestie,
Nicole
