Updated November 8, 2026. Quick answer: A therapist in private practice usually has two big choices that shape the rest: whether to rent an office or use a home office, and how to insure the practice. A home space can qualify as a place where you meet clients, but only if it is used exclusively and regularly for that. Malpractice insurance is a listed deductible insurance. Health insurance for yourself is not a Schedule C line.
The deductions this work usually has to sort out
This page reads the IRS documents linked under Sources, as retrieved on November 8, 2026. The IRS publications and instructions cited here are the 2025 editions, written for returns filed for 2025; check the current edition before relying on a figure.
Every deduction below has to pass one test first. Publication 334 puts it this way: “To be deductible, a business expense must be both ordinary and necessary.” “An ordinary expense is one that is common and accepted in your field of business.” “A necessary expense is one that is helpful and appropriate for your business.” And where a cost is mixed: “If you have an expense that is partly for business and partly personal, separate the personal part from the business part.”
This table is the usual set for a solo practice. The line shows where the Schedule C instructions place that kind of cost; whether a particular purchase qualifies is the ordinary-and-necessary question above.
| Cost | Schedule C line | What to keep | Where it is explained |
|---|---|---|---|
| Office rent | Line 20b | Lease and payment record | Schedule C lines 20 to 22 |
| Utilities and phone for the office | Line 25 | Bills; business-use share | Schedule C lines 25 and 26 |
| Malpractice and liability insurance | Line 15 | Policy declarations | Schedule C lines 14 and 15 |
| License renewals and registration | Line 23 | Renewal notices | Schedule C line 23 |
| Continuing education and supervision | Part V | Registration receipts, course dates | Schedule C lines 17 to 19 |
| Billing, scheduling, notes software | Line 18 or Part V | Invoices | Schedule C lines 17 to 19 |
| Accountant and attorney fees | Line 17 | Invoices | Schedule C lines 17 to 19 |
| Office furniture and equipment | Line 13 or 22 | Invoices | equipment and depreciation records |
Renting an office or using one at home
If you rent, the cost is straightforward: “Rent is any amount you pay for the use of property you do not own.” If you see clients in your home, Publication 587 lists the second way a home qualifies: “Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business”. The exclusive-use rule decides most cases, and Publication 334’s example shows why: “You don’t meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes.” A room used for sessions in the day and as a guest room at night is therefore not eligible. If you qualify, there is a shortcut: “In most cases, you will figure your deduction by multiplying $5 by the area of your home used regularly and exclusively for a qualified business use.” “The area you use to figure your deduction is limited to 300 square feet.” Details are on the home office deduction and home office records for Form 8829.
Malpractice coverage
Publication 334’s insurance list includes “Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients.” And the Schedule C instructions place the premium: “Deduct premiums paid for business insurance on line 15.” The same instructions exclude your own health insurance from that line. “Do not include on line 14 any contributions you made on your behalf as a self-employed person to an accident and health plan.” The same instructions point you to Schedule 1: “you may be able to deduct on Schedule 1 (Form 1040), line 17, the amount you paid for health insurance on behalf of yourself, your spouse, and dependents, even if you do not itemize your deductions.”
The big items
| Big item | How it comes up for this work | Live pages |
|---|---|---|
| Home office | See the previous section. The client-meeting route and the principal-place route are separate tests with the same exclusive-use requirement. | home office records for Form 8829; Schedule C line 30 |
| Vehicle | A therapist with one office rarely has client driving; visits to a home or facility, or trips to supervision or training at another location, are the cases where a log matters. | mileage log requirements; Schedule C lines 8 and 9 |
| Health insurance | Your own premiums are a Schedule 1 deduction, not a Schedule C cost, as above. | Schedule 1 line 17 |
| Retirement plan for yourself | “If you are a sole proprietor, you can deduct contributions you make to the plan for yourself on line 16 of Schedule 1 (Form 1040).” Plan contributions for employees go on Schedule C line 19, which is why the retirement row sits outside the Schedule C table. | Schedule 1 lines 15 and 16; SEP-IRA contributions |
| Qualified business income | Whether a health-profession practice gets the QBI deduction at higher income depends on the current thresholds; read the live page. | QBI deduction thresholds for 2026 |
Records
Client names do not belong in expense records. A receipt needs what, when, how much and why; the session itself is documented elsewhere in the practice’s own system. This page’s point is practical: keep tax records free of information you would otherwise have to protect.
For the recurring supply and software receipts, SparkReceipt’s home page says you can snap a receipt at the counter in the phone app; Dext’s US home page says you can send receipts, invoices and statements by mobile, email, WhatsApp or desktop. These are the vendors’ statements; this page has not used either product. A folder of photographed receipts and a spreadsheet meet the same IRS test, which is whether the record exists and was made close to the time.
Common mistakes
- Claiming a home office because it is used mostly for sessions, when it is also used personally.
- Putting your own health insurance on Schedule C line 14; the instructions send it to Schedule 1.
- Deducting continuing education without keeping the registration and dates.
Related: tax deductions by profession, Schedule C business code for mental health counselors, and the home office deduction.
Sources
- IRS Publication 334 (2025), Tax Guide for Small Business (For Individuals Who Use Schedule C)
- IRS Publication 587 (2025), Business Use of Your Home
- Instructions for Schedule C (Form 1040) (2025)
- IRS Publication 463 (2025), Travel, Gift, and Car Expenses
Read from the IRS documents linked above on November 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.