What Do Therapists Need to Know About Taxes in Florida?

Florida makes things easier on the tax front — but there are still key decisions therapists need to make around business structure, filings, and saving money. This guide breaks down how to handle taxes as a therapist in Florida, whether you’re just starting or scaling up.

Who this guide is for

This guide is for:

Florida-based therapists (LCSWs, LMFTs, LMHCs, psychologists, etc.)
Private practice owners — solo or group
Therapists providing services in-person, virtual, or both
Anyone wanting to avoid tax mistakes, reduce liability, and maximize income

Step 1: Pick the right structure for your practice

Choosing the right entity affects your taxes, legal protection, and operations.

Sole Proprietorship

Default structure if you don’t register anything
No liability protection
All profits taxed as self-employment income
Easy to start, but high personal risk

LLC / PLLC

Florida allows licensed professionals to form PLLCs
Offers personal asset protection
Taxed as a sole prop by default
Can elect S Corp for better tax efficiency
Register with the Florida Division of Corporations and confirm licensing board approval

S Corporation

Reduces self-employment taxes by splitting income into salary + distributions
You must run payroll and file W-2s
Most efficient for net income of $75K+
File IRS Form 2553 and Florida’s corporate tax return if needed

Professional Corporation (PA or PC)

Florida allows therapists to form Professional Associations (PAs) or Professional Corporations (PCs)
Common in group practices
Can be taxed as an S Corp
More rigid admin, but valid for some setups

Step 2: Know your state tax obligations

No state income tax

Florida does not tax personal income
That means no state income tax on sole prop, PLLC, or S Corp profits
This is one of the most therapist-friendly tax environments

Corporate income tax (for C Corps)

If you operate as a C Corp (rare for therapists), you’ll pay Florida’s corporate income tax (5.5%)
Not relevant for most therapists using pass-through entities

Annual report

Florida PLLCs, LLCs, and PCs must file an annual report
Due by May 1
Fee: $138.75 (LLC/PLLC) or $150 (PC/PA)
Failure to file = late penalties and potential dissolution

Local business licensing

Most counties and cities in Florida require a local business tax receipt
Applies to physical offices and home-based therapy practices
Zoning restrictions may apply — check with your county or municipality

Step 3: Pay taxes throughout the year — not just in April

Estimated taxes

Required if you expect to owe $1,000+ to the IRS
Florida doesn’t require state estimated tax payments
Federal estimated taxes due: April 15, June 15, Sept 15, Jan 15

Self-employment tax

15.3% on all net income for sole props and default PLLCs
Only applies to salary portion for S Corps (not profit distributions)

Filing requirements

Sole prop: Schedule C with federal return
PLLC: Annual report to state; income flows to personal return
S Corp: Federal Form 1120-S + W-2 filings for payroll
Florida does not require a separate return unless you're taxed as a corporation

Step 4: Track and claim your deductions

You can't lower your taxes if you don’t track expenses. Here’s what you can write off:

Deductible expenses for therapists

HIPAA-compliant software (EHR, billing, telehealth)
Office space or home office (if used exclusively)
Continuing education and supervision
Liability insurance
Marketing and advertising
Phone, internet, and office supplies
Health insurance premiums (self-employed)
Retirement plan contributions (Solo 401k, SEP IRA)

Step 5: When it’s time to consider an S Corp

S Corp is the go-to for therapists with growing practices who want to cut self-employment tax.

Pay yourself a salary
Take additional income as profit distributions
Only salary is subject to payroll tax
Requires payroll processing and regular compliance
Typically worth it if net income is $75K+

Step 6: Common mistakes therapists make

Skipping the annual report filing
Not getting a local business license (especially for home offices)
Staying a sole prop too long and overpaying self-employment tax
Electing S Corp but failing to run payroll
Not separating business and personal finances
Missing quarterly IRS payments

Step 7: Our recommendations by income level

Net Income Range	Suggested Action
Under $50K	Sole prop or PLLC is fine; track expenses; file annual report
$50K–$100K	Consider electing S Corp; run payroll; automate taxes
Over $100K	Full S Corp strategy; max out retirement contributions; plan quarterly with a CPA

Need help figuring this out?

We help Florida therapists choose the right business structure, stay compliant with state and local laws, and reduce taxes without cutting corners.

Book a consult or email us at david@leichtercpa.com

Disclaimer:

This guide is for informational purposes only and does not constitute legal, tax, or financial advice. While we make every effort to keep the content accurate and up to date, state laws and regulations can change without notice. You should consult a licensed professional in your state before making any decisions based on this information. Leichter Accounting Services is not liable for any errors or omissions, or for any actions taken based on the contents of this guide.