Run your own therapy practice and file taxes as a sole proprietor?

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Here's a crash course on sole proprietor taxes, including annual taxes, quarterly taxes, and tax extensions, with links to Heard resources for when you're ready to take a deeper dive.

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Key Takeaways

• As a sole proprietor, your person and your business are one and the same
• You report your revenue and expenses on Schedule C of Form 1040
• If you expect to owe $1,000 or more in federal taxes, you must file and pay quarterly taxes

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For a sense of where you stand, the median sole proprietor therapist earned $91,178 in revenue and $66,084 in net income in 2025, according to Heard's income report.

How to file taxes as a sole proprietor

As a sole proprietor, you are taxed as an individual. You report all income and expenses from your business on your personal tax return.

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The only difference between filing as a sole proprietor as opposed to an individual is that, as a sole proprietor, you must complete a Schedule C with your Form 1040.

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To find your tax bracket as a sole proprietor, see our guide to tax brackets for self-employed therapists.

Filling out your Schedule C

To complete Schedule C of Form 1040, you'll need the following information:

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• Your Social Security Number
• Employer Identification Number (EIN)
• Financial statements, specifically profit and loss (P&L) statements showing earnings and expenses
• Records and receipts for planned tax deductions
• Mileage records if you plan to claim business vehicle deductions

How do I fill out Schedule C for my therapy practice?

There are five distinct parts that need to be filled out to complete your Schedule C, four of which relate to your private practice:  

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• Income is where you report all of your practice earnings for the year.
• Expenses is where you include all of your practice expenses for the year.
• Vehicle information is for sole proprietors who want to account for the Business Use of Vehicle deduction.
• Other expenses are for any other expenses that you would like to report that you couldn't find a location for in the above sections.

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As a private practice owner, you are selling your services and not physical goods. This means you do not need to complete the Cost of Goods Sold section.

Do I need to file more than one Schedule C?

If you run multiple, non-related businesses, then you will need to complete a separate Schedule C for each. Be sure to talk to your accountant or the Heard team if you have separate, distinct forms of income.

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Paying your quarterly taxes as a sole proprietor

If you're a self-employed therapist who will owe more than $1,000 in taxes for a given tax year, you're required to pay your taxes four times a year in estimated payments. These are also known as quarterly taxes.

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For more info, check out How to Pay Quarterly Estimated Taxes as a Therapist in 2026.

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A quick worked example

Here's a simplified look at how the math works. Say your practice brings in $80,000 in gross revenue for the year, with $15,000 in deductible business expenses (rent, EHR software, supervision fees, continuing education). That leaves $65,000 in net self-employment income reported on Schedule C.

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You'd then calculate self-employment tax (15.3% on net earnings, with the employer-equivalent half deductible) and add your regular federal/state income tax on top. Your quarterly payments are essentially an estimate of that full-year tax bill split into four installments, so this same math is the starting point for each quarterly calculation too.

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Since your actual bracket and deduction amounts change from year to year, it's worth running your specific numbers with your accountant or the Heard team rather than relying on rules of thumb.

Filing for a sole proprietor tax extension

If you won't be able to file your taxes on time, file for an extension as soon as possible.

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When you file for an extension, you get an extra six months to file your taxes. Effectively, your tax deadline is moved from April to October.

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Keep in mind that an extension to file is not an extension to pay. You must still pay your taxes on time even if you apply for a tax extension. That includes quarterly taxes. Late tax payments accrue interest, increasing the amount you owe.

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You can learn more about filing for an extension—including how to get one online—from the IRS guide to tax extensions.

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Wondering how S corporations handle their taxes? Learn more here.

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Summary

• Sole proprietors report their revenue and expenses on Schedule C of Form 1040, their personal tax return
• Your profit and loss statements (P&Ls), including your annual P&L, give you the information you need to complete Schedule C
• Keep records (receipts) on file for all deductible business expenses you plan to claim
• If you're behind on your taxes, you can file for an automatic tax extension, which effectively moves your tax deadline from April to October
• An extension to file is not an extension to pay—you must still pay your taxes on time even if you haven't completed your filing

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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