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What Do Therapists Need to Know About Taxes in Oklahoma?

Oklahoma therapists in private practice face a mix of state income tax, business structure decisions, and administrative tasks like registration and licensing. This guide walks through what you need to know to stay compliant, minimize taxes, and make smart financial decisions in 2025.


Who this guide is for

This guide is built for:

  • Licensed Oklahoma therapists (LPCs, LMFTs, LCSWs, psychologists, etc.)
  • Private practice owners — solo or group
  • Therapists providing telehealth or in-person care
  • Anyone earning self-employed or 1099 income from mental health services

Step 1: Pick the right structure for your practice

Your business structure impacts your taxes, liability protection, and paperwork load.

Sole Proprietorship

  • No setup required unless using a business name
  • No liability protection
  • Income taxed directly on your personal tax return
  • Must file a trade name with the Secretary of State if operating under a business name

PLLC (Professional LLC)

  • Oklahoma allows licensed professionals to form PLLCs
  • Offers liability protection
  • Default pass-through taxation (like sole prop)
  • Can elect S Corp status later for tax savings
  • File with the Oklahoma Secretary of State

S Corporation

  • Helps reduce self-employment tax
  • Requires running payroll and extra tax filings
  • Usually beneficial once net income exceeds ~$75K
  • Still subject to Oklahoma state income tax

Professional Corporation (PC)

  • Permitted in Oklahoma
  • More formal structure, commonly used in multi-owner practices
  • Can also elect S Corp status
  • Higher admin costs than PLLC

Step 2: Know your state tax obligations

State income tax

  • Oklahoma has a progressive tax system
    • Top individual rate: 4.75% (2025)
    • Pass-through income from PLLCs or S Corps is taxed at the personal level
  • File using Form 511

Annual certificate

  • PLLCs and PCs must file an annual certificate
  • Due annually by your entity formation date
  • $25 filing fee
  • File with the Secretary of State

Business registration

  • Required for all PLLCs and PCs
  • Trade names must be registered if using a name other than your own

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

Estimated taxes

  • Required if you’ll owe $500+ to Oklahoma or $1,000+ to the IRS
  • Due quarterly: April 15, June 15, Sept 15, Jan 15
  • Use Form OW-8-ES or pay online through the Oklahoma Tax Commission portal

Self-employment tax

  • 15.3% on net income from sole props and default PLLCs
  • Can be reduced by electing S Corp and running compliant payroll

Filing requirements

  • Sole prop: Schedule C + OK Form 511
  • PLLC: OK Form 511 + federal return + annual certificate
  • S Corp: Federal 1120-S + OK Form 512-S + payroll filings + annual certificate

Step 4: Track and claim your deductions

The more expenses you document, the lower your taxable income.

Deductible expenses for therapists

  • Office space or home office
  • EHR and telehealth software
  • Liability and malpractice insurance
  • License renewal, CEUs, supervision
  • Internet, phone, supplies
  • Marketing and directories
  • Health insurance (if self-employed)
  • Retirement contributions (Solo 401k, SEP IRA)

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

An S Corp makes sense for many Oklahoma therapists once they net $75K or more.

  • Pay yourself a reasonable W-2 salary
  • Take remaining profits as distributions (no self-employment tax)
  • Requires payroll, bookkeeping, and extra filings
  • Oklahoma recognizes the S Corp election for state income tax purposes

Step 6: Common mistakes therapists make

  • Not filing the annual certificate
  • Forgetting to register trade names
  • Underpaying quarterly estimated taxes
  • Delaying S Corp election past the ideal income threshold
  • Mixing personal and business expenses
  • Ignoring deductible items like CEUs, EHR software, or advertising

Step 7: Our recommendations by income level

Net Income Range

Suggested Action

Under $50K

Stay sole prop or PLLC; register properly; track all deductions

$50K–$100K

Evaluate S Corp benefits; implement payroll; work with a CPA

Over $100K

Go full S Corp; maximize tax planning; set up benefits and retirement contributions

Need help figuring this out?

We help Oklahoma therapists structure their practice, save on taxes, and avoid costly filing errors. Get set up right from the start.

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.