Skip to main content

Federal Tax Payments

Federal taxes as a self employed individual and for a business operate differently then other employment arrangements. You will pay your typical percentage of tax withholding plus an additional self employment tax. Self employment tax is currently about 15%. The rate consists of two parts: 12% for social security (old-age, survivors, and disability insurance) and 3% for Medicare (hospital insurance). Essentially self employment tax is the amount a company pays on your behalf when you work for them. Since you are now self employed, you are responsible for both chunks of the payment. Depending on how you established your practice as a legal entity alters how the business is taxed.  Remember that the legislators of the country reform tax law often and your tax liability may change with new laws.

  • Consider having an CPA in your community complete your taxes rather than an online service. This can maximize your deductions. 
  • Keep accurate logs and books throughout the year for income and expenses in the business. 
  • Weigh the pros and cons of how you employee more staff considering tax liability as well (1099 vs W2).
  • Set aside a pre set percentage possibly as high as 40% to pay your federal taxes at the end of the year. 


Popular posts from this blog

Continuing Education Credits (CEUs)

Continuing education credits are required to maintain your mental health license (LCSW, LPC, and LMFT). Consider using your mandated CEUs to specialize in the populations you want to serve. This approach will speed you along your path of specialization and allows you to complete your renewal requirements. In Wyoming, clinicians currently need 45 continuing education hours for every two years this typically renews on their birthday. There are many ways to earn the credits you need without breaking the bank.

Local trainings offered by companies such as PESIOnline training many offer unlimited CEUs for a fixed priceWebinarsNational conferences Travel to trainings offered in other cities (tax deduction for private practices)

Offering Telehealth Services

Many private practitioners offer telehealth services to their clients.  There are many benefits to offering this service including flexibility of scheduling, availability of therapist and client and portability. There are few things to remember when offering telehealth services:

Be sure that the insurance policy will pay for telehealth sessions (as needed)Be sure that the carrier you chose for telehealth is encrypted and will offer a BAA (good options include VSee, and Zoom)Speak in a private area to assist with confidentialtyHave clients sign a specific telehealth release

Networking with Other Professionals

Networking with professionals in your community helps you to stay connected to potential referral sources as well as become an active member of the professional community. Getting out and talking to others as you become the face of your business will assist in confidence building for referral sources. Remember when networking to be social, friendly and approachable as you are constantly representing your company. There are several ways to begin networking with others immediately while others take time to develop. Allow community partners to begin associating the name of your business with trust, positivity and advocacy.  Various opportunities to network include
Volunteering for Causes- Special Olympics, Homeless ShelterJoining Kiwanis, Rotary or the Red Carpet Committee via the Chamber of CommerceSponsor a youth T-ball team or bowling teamAttend lunch workshops offered by other community membersHost an Open House at your business and invite other professionals in the areaOffer lunch m…