Tax for doctoral and prescriber practices
A CPA for psychologists and psychiatrists
A doctoral practice is not a larger therapy practice. Forensic work, testing batteries, and prescribing each bring their own tax questions, and they rarely arrive one at a time.
Where this return differs
What is actually different about psychologists at tax time
Not a longer version of the same advice. These are the places this practice type reliably differs from the return next to it.
Forensic and expert witness income behaves differently
Expert work is often paid on a 1099, sometimes by a party in another state, and sometimes through a retainer held before the work is performed. Each of those changes when the income is reported and where, and none of it looks like a normal session fee.
Testing revenue is earned across a batch, not a session
Administration, scoring and the written report can straddle a year end. When the income is recognized depends on your accounting method, and a practice that bills at intake and delivers months later can be paying tax on work it still owes.
Prescriber practices carry a second set of questions
Medication management, supervision arrangements, and any dispensing bring their own treatment. So does the entity form: several states restrict what a professional entity may look like when a prescriber is involved.
How it works
What working together looks like
A call first
Thirty minutes to hear what you have and whether this is a fit. If it is not, we will say so and point you somewhere useful.
A written scope and a fixed fee
You get both in writing before work starts, so the return you expected does not arrive with an hourly surprise attached.
Documents through a secure portal
Upload once, in one place, rather than emailing a K-1 with your Social Security number sitting in the attachment.
The questions, while they still matter
Anything that changes your number gets raised when it can still be acted on, not in a footnote after filing.
Then the next twelve months
Estimated payments, an entity change, a new state, a sale. Tax years are consecutive and treating them that way is most of the value.
What this firm does, and what it does not
PizzelloCPA, PLLC is a licensed CPA firm registered with the North Carolina State Board of Certified Public Accountant Examiners as firm no. 35339. It prepares returns and does tax planning. It does not perform attest services: no audit, no review, no compilation. If a lender or a landlord has asked you for an audited or reviewed financial statement, that is a different engagement at a different firm, and we will say so rather than stretch to fit it.
Books and the return are two different jobs. bookkeepz, LLC, an affiliated company, keeps monthly books for psychologists and other private practices, and its bookkeeping page for psychologists covers that side. bookkeepz is not a CPA firm and does not do tax work. Most clients who need both use both, under separate engagements.
Questions
What psychologists ask
I do forensic work in states where I do not practice clinically. Does that matter?
It can. Where the work is performed and where the paying party sits both bear on which states want a return. Expert engagements are frequently the reason a practice ends up filing somewhere it never intended to.I bill for a testing battery up front. When is that income taxable?
It depends on your method of accounting and on when the work is complete rather than when the money arrives. A practice that collects at intake and delivers a report the following year is the case where this matters, and it is worth setting up deliberately rather than discovering at filing.Is a doctoral practice a specified service trade or business?
Yes. Health is a specified service field, so the QBI deduction phases out as income rises. That does not make the deduction irrelevant, it makes the planning around the phaseout the useful part.Do you perform audits or reviews?
No. This is a tax practice and does not perform attest services of any kind.Insights
Reading for psychologists
W-2 or 1099: classifying the clinicians in your practice
Whether an associate clinician is an employee or a contractor is not a choice the practice makes on paper. It follows from who controls the work, and the tax cost of getting it wrong falls on the practice.
Setting a reasonable S corporation salary when you are the clinician
The clinician-owner is two employees in one chair, a provider and a manager. A defensible salary prices both jobs, and a group practice already holds the best comparable in its own payroll.
One remote employee can put you in another state’s tax system
Nexus is three separate tests, not one. The reason remote work catches people is that the cheapest of the three to trigger is the one nobody is watching.
Talk to a CPA who has seen this practice before
Thirty minutes, no charge. Bring last year’s return and the thing you were not sure about.