- Missouri
What Do Therapists Need to Know About Taxes in Missouri?
Missouri has a fairly straightforward income tax system, but things get tricky when you factor in city-level business license rules and elective S Corp considerations. This guide breaks down the most important tax and compliance tasks for Missouri-based therapists in private practice.
Who this guide is for
This guide is for:
- Licensed Missouri therapists (LPCs, LCSWs, LMFTs, psychologists, etc.)
- Solo and group practice owners
- Therapists providing in-person or telehealth services
- Clinicians who want to avoid tax surprises and stay organized year-round
Step 1: Pick the right structure for your practice
Your business structure affects your taxes, liability, and compliance burden.
Sole Proprietorship
- No filing required unless using a business name (DBA)
- No liability protection
- Income taxed directly on your personal return
- Not ideal once your practice grows or brings in risk
PLLC (Professional LLC)
- Missouri allows licensed professionals to form PLLCs
- Offers liability protection
- Default tax treatment: pass-through (like a sole prop)
- Can elect S Corp tax status for potential savings
- Register with the Missouri Secretary of State
S Corporation
- Lowers self-employment tax through W-2 + distributions
- Adds payroll and tax filing complexity
- Makes sense once net income hits ~$75K
- Still taxed at the Missouri state level
Professional Corporation (PC)
- Also allowed in Missouri
- Slightly more complex than PLLC, but commonly used by group practices
- Can elect S Corp status for similar tax treatment
Step 2: Know your state tax obligations
State income tax
- Missouri has graduated income tax rates up to 4.8% (2025)
- Applies to all income from pass-through entities
- File with Form MO-1040
Annual report
- Required for PLLCs and PCs
- File online with Missouri Secretary of State
- Due annually by the end of the month you registered in
- $15 filing fee
City business license
- Cities like Kansas City and St. Louis require business licenses
- May include an earnings tax (e.g., 1% in KC) or gross receipts tax
- Register locally with your city revenue division
Step 3: Pay taxes throughout the year — not just in April
Estimated taxes
- Required if you expect to owe $100+ to Missouri or $1,000+ to the IRS
- Due quarterly: April 15, June 15, Sept 15, Jan 15
- Use Form MO-1040ES or pay online via myTax Missouri
Self-employment tax
- Applies at 15.3% to net income from sole props and default PLLCs
- S Corp structure reduces this if payroll is correctly handled
Filing requirements
- Sole prop: Schedule C + MO-1040
- PLLC: MO-1040 + annual report
- S Corp: Federal 1120-S + MO MO-1120S + payroll filings + annual report
Step 4: Track and claim your deductions
Make sure you’re reducing your tax liability with every legitimate expense.
Deductible expenses for therapists
- Office rent or home office
- Software: EHR, scheduling, telehealth tools
- License renewal, CEUs, supervision
- Malpractice and liability insurance
- Internet, phone, advertising
- Retirement plans (SEP IRA, Solo 401k)
- Health insurance (if self-employed)
Step 5: When it’s time to consider an S Corp
S Corps are popular in Missouri because of the potential tax savings — but they only work if set up right.
- Pay yourself a “reasonable” W-2 salary
- Take additional profits as distributions
- Avoid self-employment tax on distributions
- Must run payroll and file separate S Corp returns with the IRS and Missouri
Step 6: Common mistakes therapists make
- Skipping the city business license in KC or St. Louis
- Forgetting to file the annual report
- Waiting too long to switch to an S Corp
- Not tracking CEUs, EHR expenses, or advertising spend
- Underpaying quarterly estimated taxes
- Commingling personal and business expenses
Step 7: Our recommendations by income level
Net Income Range Suggested Action
Under $50K Sole prop or PLLC; check city license rules; track deductions
$50K–$100K Evaluate S Corp election; run payroll; prepare for dual filings
Over $100K Full S Corp structure; optimize tax planning; CPA oversight recommended
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 Missouri therapists make smart decisions about their business structure, keep up with city licensing, and reduce their overall tax load.
Book a consult or email us at david@leichtercpa.com