You hold space for everyone else. Let us hold the numbers.
For therapists, psychologists, psychiatrists, nurse practitioners, counselors and group practice owners, tax, bookkeeping and strategy from a CPA who already knows what a superbill is, why August is slow, and how much your supervision costs.
HIPAA-aware workflowsCPA · EA · MSTAll 50 states, fully virtual
Books closed monthlySo March is a formality, not a crisis
The S-corp questionAnswered with your numbers
Nobody taught you this part
Graduate school covered theory, ethics and diagnosis. It did not cover payroll.
You learned how to sit with someone in the hardest hour of their life. Then you opened a practice and discovered you were also expected to be a biller, a bookkeeper, an HR department and a tax strategist, with no training and no time. None of what follows means you are bad with money. It means you were handed generic advice for a very specific business.
01
Income that moves with the calendar
August empties out. December is a coin flip. January brings deductible resets and a wave of cancellations, then February is suddenly your best month. Meanwhile the rent, the EHR subscription and the malpractice premium do not care what your caseload looked like last week.
Flat quarterly estimates based on last year's return are a blunt instrument for a practice that breathes like this. Underpay and you owe a penalty; overpay and you have lent the IRS money you needed for cash flow.
What we do: recalculate estimates each quarter from real year-to-date numbers, and use the annualized income method where a lopsided year calls for it.
02
Insurance lag versus private pay
Private-pay sessions hit the bank the same day. Insurance claims can sit for weeks, come back short, get denied for a coding reason nobody explained, then arrive as one lump deposit covering forty sessions across three payers with a contractual adjustment baked in.
If your bookkeeping records that deposit as one line of revenue, your financial statements are fiction. You cannot tell which payer is slow, which is underpaying, or whether that panel is worth staying on.
What we do: separate gross charges, contractual adjustments and actual collections so you can see collection rate by payer instead of guessing.
03
Superbills, 1099s and what counts as income
Superbills confuse people because they feel like billing but are not revenue events, your income was the payment the client already made. Then a payer or an EAP sends a 1099 that may include amounts you never received net, or that overlaps with what a processor already reported.
When those numbers disagree with your deposits, the return needs to reconcile the difference deliberately. Ignoring the mismatch is how a polite IRS letter turns up eighteen months later.
What we do: reconcile every 1099 and processor statement to your books before filing, and document the difference where one exists.
04
The S-corp question everyone asks
Someone in the Facebook group elected S-corp status and saved a fortune. Someone else did it and now pays for payroll, a second tax return and a state fee to save almost nothing. Both stories are true, for their numbers.
The election trades self-employment tax on distributions for the obligation to pay yourself a defensible salary and run real payroll. Whether that trade wins depends on your profit, your state, and how aggressive the salary has to be to survive scrutiny.
What we do: the S Corp Strategy Report, starting at $2,497, and a Reasonable Compensation Report starting at $500.
05
Bookkeeping that respects confidentiality
Most accountants have never had to think about whether a memo field could contain protected health information. You have, because it is your license on the line. The instinct to keep your accountant at arm's length is understandable, and it is also why so many practices end up with no bookkeeping at all.
The good news is that clean books simply do not require client names, diagnoses or session notes. They require dates, amounts and categories.
What we do: build HIPAA-aware workflows that keep PHI out of the accounting file entirely, with documents moving through a secure portal.
06
Paying yourself without a system
Sole proprietors and single-member LLCs take owner draws, which are not wages and are not taxed at the moment they hit your personal account. So the money feels like salary, gets spent like salary, and then April arrives with a bill nobody set aside for.
S-corp owners have the opposite problem: a payroll obligation, a salary that has to be justified, and distributions that need to stay in their lane.
What we do: set a fixed owner-pay rhythm with a tax reserve transfer that happens automatically, so the tax money is never in the spending account.
07
Your first associate, and the classification trap
You are turning people away, so you bring on a clinician. A colleague says to pay them on a 1099 because it is simpler. It is simpler, right up until the arrangement is examined and the facts say employee.
Back payroll taxes, penalties and interest, plus a state labor exposure in many jurisdictions, is a genuinely practice-threatening bill. And it is entirely avoidable with one conversation before the first paycheck.
What we do: work through the real facts of the role with you, then set up compliant payroll or 1099 reporting to match, see the breakdown below.
08
Supervision, CEUs and licensure costs
Consultation groups, individual supervision, continuing education, license renewals in two states, professional association dues, malpractice coverage, board certification. These are real, recurring, professionally required costs, and they are among the most frequently missed deductions on therapist returns.
The nuance that trips people up: education that maintains or improves skills in your current practice is deductible; education that qualifies you for a new profession is not.
What we do: categorize professional development properly all year, so nothing depends on remembering a receipt from March.
09
Books that are six months behind
You meant to reconcile in January. Then a client crisis, then a license renewal, then a school holiday. It is now well into the year and you genuinely cannot answer whether the practice made money last quarter.
The longer it sits, the more it feels like evidence of failure. It is not. It is the single most common reason practice owners call us for the first time.
What we do: quote the catch-up work separately, get the history clean, then move you to a monthly rhythm so it does not recur.
“
She came in and helped me clean up all my first time company owner mistakes, and has done so with grace and care.
Alixa Garcia, practice owner, via QuickBooks
The most expensive decision in a growing practice
Contractor or employee? The agreement doesn't decide, the facts do
You can title someone an independent contractor, have them sign a contract that says independent contractor, and still have an employee in the eyes of the IRS and your state. Classification turns on how much control you exercise over the work, not on paperwork. Here is the shape of it, in the language of an actual practice.
Looks like a genuine contractor
Sets their own hours and decides which referrals to accept
Carries their own malpractice coverage and license, and bills under their own credential where required
Uses their own tools, their EHR, their notes system, their space or a sublease they pay for
Free to work with other practices and build their own caseload elsewhere
Bears real financial risk, no guaranteed minimum, no paid time off, no reimbursement of their overhead
Even here, some states apply a stricter test than the federal one. Where you practice matters as much as what you do.
Almost certainly an employee
You assign the caseload from your intake queue and set expected session counts
They must use your EHR, your forms, your intake process and your documentation standards
You provide the office, the supervision and the training, and set the schedule they work
Clients are your clients, they sign a non-compete or non-solicit and cannot take the caseload with them
They are pre-licensed and under your supervision, billing under your credential
If most of the right-hand column describes your associate, W-2 payroll is not the expensive option. Reclassification later is.
Worth an hour of your time: our podcast episode "Costly Worker Classification Mistakes" (S5E1, March 2023, 49 minutes) walks through exactly how these arrangements go wrong. Listen on the podcast page.
Secure portal, not email attachmentsDocuments move through clients.sdrconsultinginc.com
Confidentiality by design
Your books never need to know who your clients are
The most common objection we hear from therapists is not about price. It is a quiet worry about handing financial records to someone outside the practice.
That worry is well-placed, and the answer is structural rather than reassuring. Practice bookkeeping runs on dates, amounts and categories. It does not need names, diagnoses, session notes or dates of service tied to individuals. So we build the workflow so that information never enters the accounting system in the first place.
Summary-level revenue posting. Deposits are recorded from processor and clearinghouse settlement reports, not client by client.
Clean separation from the EHR. Your clinical system stays yours; the accounting file only sees what a bank statement would show.
Secure document exchange. Statements, forms and returns move through the client portal, never as loose email attachments.
Memo-field discipline. Descriptions reference invoice or batch references, never a person.
Every year we take over returns from generalist firms and find the same categories left untouched. Not aggressive positions, ordinary, well-supported deductions that nobody thought to ask about because nobody knew this business.
12 Overlooked Tax Write-Offs for Mental Health Professionals covers the ones that come up most. Here is a preview of the territory:
Work-related travelConferences, trainings and licensure trips, and the rules that decide how much of a mixed trip counts.
Part of your home expensesHow to legally deduct a portion of rent, utilities and internet, even when you also rent clinical space.
Business meals, honestlyThe misconceptions that lead practice owners to claim too much, or, more often, nothing at all.
Write-offs specific to practiceThe categories that only exist because your business is clinical work, the ones generalists never look for.
Plus eight more, including the professional-development nuance that decides whether your supervision hours are deductible this year or not at all.
What your practice needs depends on which stage you're in
A clinician seeing eight clients a week and a practice owner running nine clinicians have almost nothing in common financially. Find the column that sounds like you.
Stage one
Solo, just starting out
You have a license, a handful of clients and a lot of open questions. Everything you set up now is cheap to do right and annoying to undo later.
Entity selection, sole proprietor, LLC or PLLC, based on your state's rules for licensed clinicians
A separate business bank account, from the very first deposit
Bookkeeping set up correctly rather than reconstructed in year three
Your first quarterly estimate, so the first April is not a shock
A simple deduction habit: mileage, supervision, CEUs, home office
Stage two
Established solo practice
Your caseload is full or close to it, profit is real, and the questions have shifted from survival to strategy.
The S-corp analysis becomes worth running. This is usually where it starts to pay
Retirement plan selection: a solo 401(k) or SEP can move real money off the return
Owner pay rhythm and an automatic tax reserve, instead of draws by feel
Monthly bookkeeping so you can see the seasonality instead of feeling it
Deciding whether to raise fees, drop a panel, or move toward private pay
Stage three
Group practice
You have brought on clinicians. You are now an employer, and the financial questions have teeth.
Contractor versus W-2 decided on facts, then set up compliantly in payroll
Compensation model design, percentage split, salary, or hybrid, and what each does to margin
Payroll onboarding and integration with your accounting system
Per-clinician profitability, so you know which roles actually contribute
Cash-flow planning for payroll that runs whether or not the payer paid
Stage four
Multi-clinician & scaling
Multiple clinicians, possibly multiple locations or states, and an admin team. You need a finance function, not a bookkeeper.
Year-round advisory on the decisions in front of you
Multi-state payroll and nexus questions as clinicians and telehealth cross state lines
Benefits and retirement plan design for a growing team
Entity structure review, does the current one still fit, and what happens if you add a partner
Clean, defensible financials if you ever consider a sale or an outside investment
01
Request a consultation
Tell us where the practice is, what is working, and what has been sitting on your to-do list since last spring.
02
Get a clear proposal
A written scope and a flat fee. What is included, what it costs, when it happens. No hourly meter and no vague "it depends."
03
Hand it over
We onboard the books, set the estimates and get on a rhythm. You go back to seeing clients, with a CPA in your corner year-round.
Client words
From practice owners and clinicians
Safie and her team is a one of a kind gem! As a professional nurse and business owner I really appreciate Safie's dedication to accounting. She is honest, professional, and gives you solid consulting and is highly ethical. In fact, she doesn't just take any client. You have to match the company's mission and values. She is extremely organized, detailed oriented and intelligent. She takes privacy seriously and all your information is secure.
JuliaNurse & business owner
Reviewed on Google
SDR Consulting is incredible! And Safie is a dream! I could not recommend her more. She is timely, answers all of my questions, and has taught me so much about running my own business. She came in and helped me clean up all my first time company owner mistakes, and has done so with grace and care. I hope to always have SDR by my side!
Alixa GarciaPractice owner
Reviewed on QuickBooks
Her and her staff is amazing. They help me and respond to me quick and help me to understand plus she is extremely patient with me and that means alot because I'm overwhelmed a lot with my day to day and I forget some task and she reminds me and helps me.
Verified clientOffices of Physicians, Mental Health Specialists
Reviewed on QuickBooks
As a woman-owned small business owner, finding the right accountant who could guide and support me was crucial. Safie proved to be exactly the mentor I needed. She has become an indispensable part of my journey in establishing my small business, and I truly couldn't have done it without her.
Olivia RiosSmall business owner
Reviewed on Google
Safie is a dream to work with! She helped me in a pinch when I had an unexpected deadline, with one day's notice. As a new business owner, taxes and bookkeeping can be intimidating.
The seven that come up on almost every consultation
Do I need an S-corp?
Maybe, and the honest answer requires your numbers. An S-corp election can reduce self-employment tax once your practice profit is high enough to support a reasonable salary and still leave meaningful distributions. It also adds payroll filings, a separate business return, and in some states an extra tax or fee that quietly eats the benefit. Our S Corp Strategy Report runs it for your practice specifically: the S Corp Strategy Report starts at $2,497 and the Reasonable Compensation Report at $500. If you want a free starting point, take the 7-Point S Corp Checklist first.
Is my supervision deductible?
Generally yes, when the supervision maintains or improves the skills required in the practice you already run, ongoing clinical consultation, peer supervision, specialty consultation for a modality you already use. Where it gets nuanced is pre-licensure supervision, because education or training that qualifies you for a new license or a new profession is treated differently from training that sharpens what you already do. The year you become independently licensed often changes the answer, which is exactly the kind of timing question worth raising before December rather than in April.
Can I deduct my home office if I also rent an office?
Often yes. Renting clinical space does not automatically disqualify a home office. What matters is whether the home space is used regularly and exclusively for business, and whether it serves as your principal place of business for substantial administrative work, notes, billing, scheduling, telehealth sessions, supervision calls. Plenty of therapists legitimately claim both. The exclusive-use test is where people get into trouble: a desk in the corner of the guest room that doubles as a guest room is a problem, and a dedicated room used only for practice work is not. We help you set the space and the documentation up properly, and choose between the simplified and actual-expense methods.
Contractor or employee for my first associate?
This is the most expensive mistake we see in growing practices. Classification depends on the facts of the relationship, not on what the agreement is titled. If you set the schedule, assign clients from your intake queue, require your EHR and documentation standards, provide the office, supervise the clinical work and restrict who else they can see, the arrangement generally looks like employment, and calling it a 1099 does not change that. Misclassification can mean back payroll taxes, penalties and interest, plus separate state labor exposure. We work through the actual facts with you before the first paycheck and set up compliant payroll or contractor reporting to match. See the side-by-side comparison above.
How do I handle irregular income for estimated taxes?
Private practice income is rarely level. Clients pause in summer, insurance reimbursement arrives on its own schedule, and a strong autumn can land after a thin spring. We set estimates from actual year-to-date numbers instead of a flat quarter of last year's tax, revisit them each quarter, and where the year is genuinely lopsided we use the annualized income method so a strong finish does not create a penalty for an underpaid start. Just as importantly, we set a transfer rhythm, a fixed percentage moved to a separate tax account with every deposit, so the money is already gone before it starts to feel spendable. The quarterly estimated taxes guide walks through the mechanics.
Do you understand HIPAA requirements?
Yes, and the most useful part of the answer is structural. Good practice bookkeeping does not require client names, diagnoses or session details, so we design the workflow to keep protected health information out of the accounting system entirely. Revenue is posted in summary from processor and clearinghouse settlement reports rather than client by client, documents move through our secure client portal rather than email attachments, and memo fields reference batches and invoices rather than people. Nobody on our side needs to open a chart to close your month.
I'm a PLLC, does that change anything?
A PLLC is a professional limited liability company, the form many states require for licensed clinicians. For federal tax purposes it behaves like any other LLC, so it can be taxed as a sole proprietorship, a partnership, an S corporation or a C corporation depending on elections. What changes is state-level detail: ownership is typically restricted to licensed professionals in the same field, there are naming and registration requirements, and some states add filing fees or an entity-level tax. Those rules can affect whether an S-corp election makes sense for you and how you would bring on a partner later, so the entity conversation is always a state conversation too.
This page is general information, not advice for your specific situation. The right answer depends on your numbers, your state and your facts, which is what a consultation is for.
Let's talk
Your practice heals people. Let's keep its finances just as healthy.
Request a consultation with Safietou. Tell her where the practice is and what has been sitting on your list, and leave with at least one thing you can act on, whether or not you become a client.
