- Mississippi
What Do Therapists Need to Know About Taxes in Mississippi?
Mississippi’s income tax is relatively straightforward — but many therapists overlook entity rules, annual filings, and the state’s unique gross income thresholds. This guide breaks down exactly what you need to know to run a compliant, tax-smart private practice in Mississippi.
Who this guide is for
This guide is for:
- Licensed Mississippi therapists (LPCs, LCSWs, LMFTs, psychologists, etc.)
- Solo practice owners and group practice leaders
- Therapists providing telehealth, in-person, or hybrid services
- Professionals who want to reduce their tax burden and avoid state-level surprises
Step 1: Pick the right structure for your practice
The structure you choose determines how you’re taxed and what your filing responsibilities look like.
Sole Proprietorship
- Easiest to set up — no formal registration required
- No liability protection
- All income is taxed on your personal return
- Must register a DBA if using a trade name
PLLC (Professional LLC)
- Mississippi allows licensed professionals to form PLLCs
- Offers liability protection
- Default tax treatment: pass-through
- Can elect S Corp status with the IRS for tax savings
- File with the Mississippi Secretary of State
S Corporation
- Helps reduce self-employment tax
- Requires W-2 payroll, bookkeeping, and separate filings
- Makes sense once your practice nets ~$75K or more annually
- Must file a Mississippi S Corp return and federal 1120-S
Professional Corporation (PC)
- Also allowed in Mississippi
- Can elect S Corp status
- Requires more formalities — generally better for multi-owner practices
Step 2: Know your state tax obligations
State income tax
- Mississippi has graduated income tax brackets:
- 0% on the first $5,000 of taxable income
- 4.7% on income $5,001–$10,000
- 5% on income over $10,000
- Applies to pass-through business income
- File with Form 80-105 (individual return)
Annual report
- Required for PLLCs and PCs
- Due April 15 each year
- File through the Mississippi Secretary of State website
- No filing fee for PLLCs; $25 fee for corporations
Business license
- Must register your business through the Secretary of State
- If operating under a trade name, you must also file a fictitious name registration
Step 3: Pay taxes throughout the year — not just in April
Estimated taxes
- Required if you expect to owe $200+ in state tax or $1,000+ to the IRS
- Due quarterly: April 15, June 15, Sept 15, Jan 15
- File with Form 80-106 or pay online
Self-employment tax
- 15.3% applies to all net income from sole props and default PLLCs
- Can be reduced with an S Corp structure — if you run proper payroll
Filing requirements
- Sole prop: Schedule C + MS Form 80-105
- PLLC: MS Form 80-105 + annual report + federal tax return
- S Corp: Federal 1120-S + MS Form 83-310 (Mississippi S Corp return) + payroll + annual report
Step 4: Track and claim your deductions
You only pay tax on your net income — so make sure you’re tracking everything that counts.
Deductible expenses for therapists
- Rent, coworking, or home office
- CEUs, license renewals, supervision
- Malpractice and liability insurance
- Therapy platforms, EHRs, scheduling systems
- Marketing, directories, business cards
- Internet, phone, supplies
- Self-employed health insurance
- Retirement plans (Solo 401k, SEP IRA)
Step 5: When it’s time to consider an S Corp
If your practice is bringing in more than $75K after expenses, an S Corp could help reduce your tax burden.
- Pay yourself a reasonable W-2 salary
- Take the rest of your profit as distributions
- Avoid self-employment tax on distributions
- Must manage payroll and file a separate MS corporate return
Step 6: Common mistakes therapists make
- Missing the April 15 annual report deadline
- Not registering their trade name (DBA)
- Underestimating state tax on pass-through income
- Not making quarterly estimated payments
- Skipping deductions like CEUs, marketing, or insurance
- Choosing a structure (like PC or PLLC) but not maintaining it properly
Step 7: Our recommendations by income level
Net Income Range Suggested Action
Under $50K Stay sole prop or PLLC; file annual report; pay quarterly taxes
$50K–$100K Consider S Corp; run payroll; monitor state income tax closely
Over $100K Use full S Corp setup; max out deductions and retirement plans; CPA advised
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 Mississippi therapists get set up with the right structure, track deductions, and avoid costly tax errors.
Book a consult or email us at david@leichtercpa.com