Guide · 6 min read
Private practice combines insurance billing, client copays, and a stack of professional expenses. Here's the bookkeeping setup most solo and group-practice therapists actually maintain.
A typical session has two revenue streams: an insurance reimbursement that arrives weeks later (sometimes adjusted) and a copay collected at the appointment. Without tracking expected vs actual, payer underpayments and silent chargebacks can quietly cost a solo practice $5–15k a year.
Free business checking + business credit card. All insurance EFTs and client payments in; all practice expenses out.
When you bill insurance, record the expected reimbursement. When the EOB arrives, log actual. The gap shows payer issues, denied claims, or coding fixes you need to make.
Continuing education, peer consultation, supervision hours, and association dues are all deductible. Many therapists under-deduct these because they feel like 'personal growth'.
Move 25–30% of net to a tax savings account. Once you're consistently above $80k net, a SEP-IRA or Solo 401(k) shelters significant income from current-year tax.
Track insurance, copays, and practice expenses in 15 minutes a week. Built for solo and group practice.
Start freeYes — for two reasons. HIPAA requires you to keep client financial records separate and secure, and insurance payers (Medicare, Aetna, BCBS) reimburse on different schedules with different deductions. Without a system, reconciling payer payouts becomes a part-time job.
Treat them as two separate revenue streams per session: insurance reimbursement (often arrives 30–90 days later, sometimes adjusted down) and client copay (collected at session). Log expected vs actual to catch underpayments and chargebacks early.
Licensing & state board fees, professional liability insurance, EHR/practice management software (SimplePractice, TherapyNotes, etc.), continuing education and supervision hours, professional association dues (APA, NASW, AAMFT), office rent, malpractice insurance, secure messaging tools, and a portion of phone/internet.
Fully deductible as continuing education or professional services. Pre-licensure supervision, peer consultation groups, and case consultation are all legitimate business expenses.
In almost every US state, mental health services are exempt from sales tax. Some states tax wellness coaching or non-clinical services differently — check your state's department of revenue if you offer both clinical and coaching services.