Private Practice Accounting: Everything Therapists Need for Tax Season

Can therapists use QuickBooks?

Such a haven of resources will also trigger your ideas for how to customize them, which is quickly done to provide a tailored journey for each client. Simply put, the best accounting software is one that suits your unique needs. Most practices will use an Electronic Health Record (EHR) software to bill insurance, write notes and much more. Whether you use Simple Practice, Therapy Notes, or another EHR, it can be challenging to keep track of your finances since an EHR is not an accounting software. QuickBooks Online (QBO) is the #1 small business financial software. QBO is NOT HIPAA compliant so we do not recommend using this for billing–and protected health information should never be in QBO.

  • We wish starting a therapy practice in Washington was as simple as getting a few clients and slapping an “open” sign on the door.
  • Chances are, you’re operating under extremely tight margins — leaving little room for money mishaps.
  • In that case, it’s worth comparing to Xero and Wave, the other options on our list.
  • Sync your client’s data from QuickBooks Online Accountant for faster, more accurate filing.
  • Just like a doctor has access to a suite of diagnostic tools, therapists now have access to various functions and resources.

You do not need any shareholders besides yourself in order to elect S corp status. Here’s everything you need to know about how S corporation status works, potential drawbacks to look out for, and how to elect S corp status for your therapy practice. If you need to review all of your invoices or want to check the status of an invoice, you can click on the Sales option on the main screen and choose Invoices. This will display a list of all invoices that have been processed to date.

HIPAA compliance: a quick refresher

Then you elect S corp status with the IRS by filing IRS Form 2553. Depending on where your business is registered or incorporated, you may need to file a similar form with State tax authorities. If you bill clients monthly, you can create an invoice and choose to make it recurring, eliminating the need to create an invoice for that customer each month. You can use the drop-down menu to the right of all data entry fields to locate the data that you’re looking for, including invoice terms and due dates.

Can therapists use QuickBooks?

That said, I HIGHLY suggest you make the investment to have a professional prep and file your taxes. Mistakes made will be more costly to you that it would have been had you just hired a professional in the first place. And more often than not, when clients come to us with previous taxes that they ‘filed themselves’, we end up having to amend and re-do them to fix the mistakes. QuickBooks is a bookkeeping solution that keeps track of your income and expenses. It helps you keep everything in order so that when tax time rolls around you can easily hand it off to a tax professional to save time and money with filing. Since your chart of accounts is static, you can create as many copies of it as you like.

Some of the Best Scheduling Software for Therapists

We offer flexible plans and pricing to meet your needs and budget. Whether you just want help tracking receipts or you’re looking to automate complex workflows and support a large team, we have options for you. Use this cheatsheet to maximize your deductions and save money on taxes for your therapy practice.

  • Electing S corp status affects how your income is taxed by the IRS, and how your therapy practice’s profits are passed on to its shareholders.
  • To downgrade from Full-Service Bookkeeping, you may need to wait until the end of your current subscription billing period.
  • When it comes to determining whether your transactions with clients are HIPAA-compliant, it’s important to understand the difference between PHI and payment information.
  • Our goal is to give you back your time, so you can spend less time worrying about bookkeeping, and more time helping your clients.
  • “That means your relationship with saving, spending, and earning money,” she says.
  • The more specific, therapist-focused software, though, will better cater to your needs.

A financial advisor is going to dive headfirst into your finances. It’s their job to offer advice and guidance on bookkeeping for therapists financial issues and decisions. And they’re a great resource to help you create and meet your financial goals.

What’s Heard?

Discover discounts just for accounting professionals on the products and supplies you and your clients need most. QuickBooks Desktop is a one-time purchase installed on your clients’ work computer. We offer multiple versions depending on your clients’ needs—Pro, Premier, and Mac. If you tell a financial advisor that you want to start a new business, they’re going to ask how much capital you have or how much you need. They’re going to ask if you’ve done your market research and competitive analysis.

Can therapists use QuickBooks?

Accounting software gives you the tools to do your own bookkeeping and prepare the information you need to file taxes, but it isn’t some kind of robot accountant. You, the user and business owner, need to have a basic level of financial competency in order to use it. At the same time, you avoid complicated tax filing and reporting requirements.

Simplified tax and accounting software built for therapists

While cash is probably the most anonymous (and thus secure) means of receiving payment from a client, you still need to follow HIPAA best practices when it comes to recording the transaction. If you store the client’s name on file, you must use a HIPAA-compliant system to do so. Even an emailed receipt from an online payment provider including your client’s name and the name of your practice may qualify as PHI. And depending on the filing status of your LLC, will determine how/if you should have payroll.

Can therapists use QuickBooks?


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