- Georgia
What Do Therapists Need to Know About Taxes in Georgia?
If you’re a therapist practicing in Georgia, this guide will help you get your business structure, tax filings, and financial strategy sorted. Whether you’re launching a new practice or cleaning up an existing one, we’ll walk you through what matters.
Who this guide is for
This guide is for:
- Licensed Georgia therapists (LPCs, LCSWs, LMFTs, psychologists, etc.)
- Solo or group practice owners
- Clinicians providing in-person or telehealth services
- Anyone who wants to pay the right taxes, avoid penalties, and keep more of what they earn
Step 1: Pick the right structure for your practice
Your entity type determines how your income is taxed — and how protected your assets are.
Sole Proprietorship
- Default if you don’t register as anything else
- No liability protection
- All net income taxed as self-employment income
- Minimal setup, but limited protection
LLC / PLLC
- Georgia allows licensed professionals to form PLLCs
- Offers legal protection for personal assets
- Taxed as a sole prop by default
- Can elect S Corp status to reduce tax burden
- Must file with Georgia Secretary of State and submit proof of licensing
S Corporation
- Allows you to split income into salary + profit
- Only the salary is subject to employment taxes
- You must run payroll and file W-2s and corporate tax returns
- Starts making financial sense when you’re netting ~$75K+
Professional Corporation (PC)
- Permitted in Georgia but uncommon for small practices
- Generally higher admin burden than PLLC
- Can elect to be taxed as S Corp
- Must comply with Georgia's Professional Licensing Board regulations
Step 2: Know your state tax obligations
State income tax
- Georgia has a graduated income tax ranging from 1% to 5.75%
- Applies to personal and pass-through income
- All PLLCs and S Corps are taxed at the personal level unless elected otherwise
Annual registration and fees
- PLLCs and PCs must file an annual registration with the Secretary of State
- Fee: $50
- You must keep your business in good standing to avoid penalties
Local business licenses
- Most Georgia cities/counties require a business license (a.k.a. occupational tax certificate)
- This applies whether you're renting an office or working from home
- Fees vary by location and revenue
Step 3: Pay taxes throughout the year — not just in April
Estimated taxes
- Required if you’ll owe $500+ in state income tax
- Due quarterly: April 15, June 15, Sept 15, Jan 15
- Pay to both the IRS and Georgia Department of Revenue
Self-employment tax
- Applies to sole props and default PLLCs
- 15.3% on all net income
- You avoid most of this by electing S Corp and running payroll
Filing requirements
- Sole prop: Schedule C with federal 1040 + GA Form 500
- PLLC: Annual registration + income reported on personal return
- S Corp: Federal Form 1120-S + Georgia Form 600S
Step 4: Track and claim your deductions
Deductible expenses reduce your taxable income. Track everything — not just the big stuff.
Deductible expenses for therapists
- Rent or home office space
- HIPAA-compliant EHR and telehealth platforms
- Continuing education, licenses, supervision
- Professional liability insurance
- Phone, internet, software subscriptions
- Marketing and advertising
- Health insurance premiums
- Retirement plan contributions (Solo 401k, SEP IRA)
Step 5: Know when it’s time to consider an S Corp
If your practice is generating strong profit, S Corp status can save you thousands.
S Corp
- Pay yourself a reasonable salary
- Take remaining profits as distributions — not subject to self-employment tax
- Requires payroll and corporate filings
- Often the best choice for practices with $75K+ in annual net income
Step 6: Avoid common mistakes therapists make
- Not registering with local authorities for a business license
- Missing estimated tax payments
- Failing to separate business and personal finances
- Electing S Corp but not running payroll
- Not filing the annual registration and losing good standing
- Not forming a PLLC when required by law
Step 7: Our recommendations by income level
Net Income Range Suggested Action
Under $50K Sole prop or PLLC is fine; track expenses and pay quarterly taxes
$50K–$100K Evaluate S Corp; outsource payroll and bookkeeping
Over $100K Maximize retirement, run full S Corp setup, and review taxes quarterly
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 therapists in Georgia set up clean, compliant business structures, reduce tax liabilities, and focus on the work that matters most — your clients.
Book a consult or email us at david@leichtercpa.com