- Florida
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 (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.
S Corp
- 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
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.
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