Alan Pruitt CPA Helps Therapists Keep More of What They Earn

Tax Planning for Therapists Is a Year-Round Process

If taxes only enter your awareness in March or April, you are probably already behind.

That was one of the clearest takeaways from my conversation with CPA Alan Pruitt, founder of The Therapist CPA Firm. Alan works exclusively with therapists, and what I appreciate most about his approach is that he understands the emotional relationship many clinicians have with money. Therapists are often excellent caregivers and problem-solvers, but many of us were never taught how to run the business side of private practice.

During this webinar, Alan explained that there are really two tax seasons. The first is tax paying season, when therapists prepare and file returns. The second is tax saving season, which happens during the rest of the year. That distinction matters because most opportunities to reduce taxes happen long before filing deadlines arrive.

I see this often with supervisees and practice owners. They assume taxes are a once-a-year task instead of an ongoing business system. But financial sustainability requires consistent attention, not emergency responses.

The Three Numbers Every Therapist Needs to Know

One of the strongest teaching points Alan shared was the importance of understanding three core financial numbers. He explained that therapists cannot make sustainable business decisions without knowing exactly what each session is producing financially.

The first number is revenue per session. This is not simply your advertised fee. It reflects what you actually collect after cancellations, no-shows, reduced rates, or insurance adjustments. A therapist may believe they earn 150 dollars per session, but once those variables are factored in, the actual number could be significantly lower.

[Read more about how to determine your Effective Hourly Income Here]

The second number is overhead per session. Alan encouraged therapists to move beyond thinking only in monthly expenses and instead calculate what each session costs to operate. This includes rent, software subscriptions, continuing education, professional services, and administrative systems.

The third number is profit per session. This is where therapists begin to see the true financial health of the practice. Alan shared examples of clinicians who were fully booked but still struggling financially because they had never calculated what they were actually keeping after expenses.

I appreciated how practical this framework was. Therapists often focus on staying busy, but sustainable practices require more than a full schedule. They require measurable profitability.

Why Therapists Often Overpay in Taxes

Alan emphasized that most therapists do not overpay because of tax rates. They overpay because of missing systems.

One of the biggest problems he sees is inconsistent bookkeeping. Therapists frequently mix personal and business expenses, rely on spreadsheets that are difficult to maintain, or wait until tax season to organize receipts and records. By then, important deductions are often missed.

He also discussed the importance of keeping business expenses inside dedicated business accounts whenever possible. This is not simply about organization. It creates clean records that support accurate bookkeeping and stronger tax planning throughout the year.

I appreciated how Alan reframed deductions during the webinar. Instead of asking, “Can I write this off?” he encouraged therapists to ask whether an expense is ordinary and necessary for the business. That shift moves therapists away from fear-based decision making and toward intentional business management.

Financial Sustainability Supports Clinical Sustainability

One part of the conversation that stayed with me was Alan’s observation that many therapists feel uncomfortable making money. I hear this too. Some clinicians carry guilt around charging appropriately, increasing fees, or building profitable systems.

But as Alan explained, financial sustainability and clinical sustainability are connected.

Therapists who constantly worry about payroll, taxes, or unpredictable income are far more vulnerable to burnout. They may overbook themselves, avoid needed investments in their business, or continue operating systems that are no longer working simply because they feel emotionally responsible for everyone around them.

Alan shared examples of practice owners who were effectively paying employees out of their own unpaid labor because they had not fully evaluated profitability. Those situations are difficult emotionally, but they highlight why understanding business numbers matters so much.

[Looking for more ways to make positive changes but don't know where to start? Check out this article.]

A sustainable practice protects both the therapist and the clients they serve.

S Corps, Retirement Planning, and Long-Term Strategy

Another valuable section of the webinar focused on proactive tax strategies. Alan explained how S Corps can reduce self-employment taxes for therapists who are consistently profitable. He emphasized that this is not a one-size-fits-all decision, but for many practice owners, the savings can be significant.

He also discussed retirement planning, which is often overlooked by clinicians early in practice growth. Contributions to retirement accounts not only support long-term financial stability, they may also reduce taxable income. Alan encouraged therapists to think strategically about these systems instead of treating them as optional future goals.

What I appreciated throughout the conversation was Alan’s focus on planning rather than reacting. Every recommendation connected back to building systems early enough to influence outcomes later.

Start with Clarity, Not Panic

Therapists do not need to become accountants to run sustainable practices. But we do need enough clarity to make informed decisions. That starts with knowing your numbers: revenue per session, overhead per session, and profit per session.

It also means building consistent bookkeeping habits, separating personal and business finances, and treating tax planning as part of ethical business ownership rather than a once-a-year crisis.

Alan’s message throughout this webinar was clear. Therapists deserve to keep more of what they earn, and strong systems make that possible.

Where This Blog Connects

• Decoding The Economics of a Thriving Therapy Practice with Private Practice Accountant Alan Pruitt
• Business Problem Solving Beyond The Numbers: A Therapist's Guide
• Counselor Taxes Made Easy For The “I'm Not A Numbers Person”
• Navigating Taxes For A Private Practice Therapist: Year-End Finance Tips

Want to learn more? Check out this month’s free resource from Kate Walker Training.

If you want support building sustainable systems for supervision or practice growth, start with the free Supervision Onboarding Checklist. If you are growing your private practice and need a clearer operational structure, grab The Essential Guide For Self-Employed Mental Health Professionals and Supervisors. And for deeper CE-level training and business support designed specifically for therapists and supervisors, check out the Step It Up Membership.

Blog post by Kate Walker, Ph.D., LPC-S, LMFT-S
Creator of Texas’s first fully online 40-Hour LPC/LMFT Supervisor Training Course.
Kate is the founder of Kate Walker Training, where she helps counselors, supervisors, and practice owners build sustainable, ethical, and profitable businesses.

This post is a written summary of a podcast episode hosted by Dr. Kate Walker. We use AI to help format the transcript and check for clarity and spelling, turning spoken content into an easier-to-read format.