The 27-Item Tax Deductions Checklist Every Therapy Practice Owner Misses

Most healthcare practice owners are leaving $8,000–$35,000 in legitimate deductions on the table every year. Not because they’re aggressive, and not because they need creative accounting — because their CPA doesn’t know what’s actually deductible for a clinical practice.

This is the 27-item checklist we run against every Practice Partner client’s books in the first 90 days. It’s organized by category, with specific IRS code references for the ones most often missed or contested. Use it as a self-audit before next April.

Clinical equipment & supplies (commonly missed)

1. Sensory gym equipment and consumables — for OT, ABA, and pediatric SLP practices. Swings, weighted blankets, AAC devices, fine-motor tools. Often coded as “office supplies” instead of practice equipment. Bonus depreciation under §168(k) applies.
2. AAC devices and software licenses — speech-generating devices, app licenses (Proloquo, TouchChat, LAMP). Frequently miscategorized as personal tech.
3. Telehealth platform subscriptions — SimplePractice, Doxy.me, TheraPlatform. The recurring fees, not just the hardware.
4. Continuing education and CEU course fees — including travel + lodging to attend conferences. Under §162, but often missed when the CE is online-only.
5. Professional license renewals — RN, NP, PT, OT, SLP, BCBA. Easy to forget when state boards bill personally instead of the practice.

Practice infrastructure (the section most CPAs underweight)

6. EHR/EMR software subscriptions — WebPT, Theranest, TherapyNotes, Practice Fusion. Annual licenses fully deductible.
7. Practice management system + billing software — Kareo, AdvancedMD, DrChrono. Separate line item from EHR for clarity.
8. HIPAA-compliant cloud storage — Box Healthcare, Microsoft 365 Business Premium with BAA, Google Workspace with BAA. The premium tier is required for compliance, fully deductible.
9. Cyber liability insurance premiums — increasingly mandatory for HIPAA covered entities. Annual premium fully deductible.
10. Malpractice insurance premiums — practice and clinician policies both deductible. Pay through the practice, not personally.
11. Professional association dues — APTA, AOTA, ASHA, ANA, BACB. Including state chapters.

Home office, vehicle, and travel (where most audits happen)

12. Home office deduction — if you do practice administration from home (and that includes EHR/charting after hours), you qualify. Simplified method: $5/sq ft up to 300 sq ft = $1,500 max. Actual method: percentage of home expenses (mortgage interest, utilities, insurance) by square footage. Most owners are leaving the actual method on the table.
13. Practice vehicle mileage — IRS 2026 rate: 70¢/mile for business use. Travel between practice locations, to schools (for NPAs), to client sites. Personal commute is NOT deductible — track carefully.
14. Conference travel + meals — including airfare, hotel, 50% of meals (100% if catered at the event). Save itineraries and receipts.
15. Professional reference materials — books, journals, online subscriptions (UpToDate, Medscape, Lexicomp).

Retirement and benefits (the biggest dollar-value deductions)

16. Solo 401(k) employer contribution — up to 25% of W-2 wage (if S-corp) or up to $46,000 employer contribution in 2026. Combined with employee deferral ($23,500), total contribution limit is $69,500 ($76,500 if age 50+).
17. Cash balance plan — for high-earning solo or small-group practices, allows $100K–$300K/year of tax-deferred contributions on top of the 401(k). Requires actuarial setup and ongoing compliance, but a single year of properly-structured cash balance can save $40K–$120K in federal tax.
18. HSA contributions — if you have an HSA-qualifying health plan: $4,300 individual / $8,550 family in 2026.
19. HRA (Health Reimbursement Arrangement) — if you have employees, an HRA can deduct medical expenses for you and your family that wouldn’t qualify on Schedule A.
20. Disability insurance premiums — pay through the practice as a benefit; the benefits are then tax-free if you ever need them.

Often missed: payment processing, marketing, and professional fees

21. Credit card processing fees — Stripe, Square, payment gateway monthly fees. The total annual fee can be $3K–$15K depending on volume.
22. Website hosting + domain + SSL — ongoing platform fees, not just the original design.
23. Marketing — Google Ads, Facebook Ads, SEO retainers — fully deductible. Track separately for ROI.
24. Bookkeeping + accounting + tax prep fees — including our fees. Pay through the practice.
25. Legal fees — for practice formation, contract review, employment matters, vendor disputes. NOT for personal matters.
26. Banking + merchant account fees — including monthly maintenance, wire fees, ACH fees.
27. Section 179 immediate expensing — for tangible property (computers, equipment, vehicles over 6,000 lbs GVWR) up to $1.16M in 2026. Allows full deduction in year of purchase instead of depreciating over 5–7 years.

The audit-safe documentation standard

For every deduction, the IRS expects:

• Receipt or invoice with vendor name, date, amount, and business purpose
• Method of payment traceable to business account (not personal credit card)
• Business purpose noted if not obvious from invoice (e.g., “CE for OT certification”)
• Mileage log with date, destination, business purpose, and miles for vehicle deductions
• Capital asset record for items over $2,500 — purchase date, cost, depreciation method, useful life

FAQs from practice owners

Can I deduct CE travel if I extend the trip for vacation?

Yes, but only the business portion. If you fly to a 3-day conference and stay 2 extra days for personal time, deduct the airfare in full (the primary purpose is business), the hotel for the conference nights only, and the meals on conference days only. Keep the conference agenda and your itinerary in your tax workpapers.

What about my own clinical scrubs, lab coats, stethoscope?

Deductible IF (1) required for work, AND (2) not suitable for personal wear. Scrubs and lab coats qualify. Comfortable sneakers do not, even if you wear them only at work. Stethoscope, otoscope, professional tools — deductible.

I paid for my professional certification renewal personally — can I still deduct?

Yes, but you should reimburse yourself from the practice and book it there. Cleaner audit trail and the deduction stays at the higher business-rate ordinary income level.