Name: Tax Season Survival Kit
Uploaded: 2026-01-14T20:30:06.719Z
Duration: 1 h 7 min 45 s
Description: Tax Season Survival Kit

Transcript for "Tax Season Survival Kit": welcome. I'm Alena, and I manage partner marketing here at Simple Practice. I'm thrilled to be your host for today's livestream, tax season survival kit. As most of you know, Simple Practice is dedicated to providing you with the all in one EHR and practice management tools that you need to run a private practice efficiently. We also know that a truly thriving practice also requires solid financial management. So that's why we're proud to partner with Heard and bring you today's livestream. Heard offers specialized bookkeeping, tax, and payroll software that's designed specifically for therapists and other health and wellness practitioners. Our partnership with Heard allows us to extend our mission of empowering practitioners by connecting you with the team at Heard who truly understand the unique financial business needs of a private practice. So today we have Andrew and Forrest from Heard here to share expertise with you. So get ready to dive in to your tax season survival guide. Now without further ado, let's get started. Please join me in welcoming Andrew and Forrest. Guys, take it away. Awesome. Hello, everybody, and happy Wednesday. And thank you, Alena, for the wonderful introduction as always. And Janelle and all of the team back stage that make this possible, we are very grateful for you. If you're returning from the last webinar, welcome back. If you're new here, welcome. We're so excited to have you. A little bit about me, my name is Andrew. I am one of the cofounders of Heard. I am a lifelong accountant. I am husband to a clinical social worker, brother-in-law or husband to a clinical psychologist, brother-in-law to a clinical social worker, and brother to a a dentist who operates in private practice. And so I am deeply passionate about supporting small businesses, but certainly small businesses that operate in a health and wellness capacity. And so I am really grateful to be here, and I'm really excited to be doing this with my amazing counterpart, Forrest, who I always have fun jamming with. So, Forrest, I'll hand it over to you for a quick intro. Gotta take myself off mute there first. Well, thank you. Really excited to be here and echoing everything you just mentioned. Fun fact, Andrew and I have known each other for, I think, almost, like, ten or twelve years now. So we started at PricewaterhouseCoopers where I became a CPA, did all the fun accounting and tax work for big companies, but quickly realized much more of a passion for small business. My parents own a small business, and you get much more gratification saving a few thousand dollars for a small business owner than finding a $100,000 mistake for a big business that they just shy away from. So I've been at Heard almost five years now. I've spoken to thousands and thousands of health, wellness, therapist, providers all across the board in different capacities and really excited, to hopefully make accounting or tax a little bit more fun today and distill some of those confusing concepts you review online into a translatable manner in your business and hopefully making tax season a little bit less stressful. Awesome. And I would be very remiss oh, why don't we jump back to this last? I I would be very remiss to not acknowledge our amazing team that is here behind the scenes during what is the kickoff of our tax season. And so as you might imagine, they are quite busy, but they are here to answer your questions. So please, please, please drop all of your questions into the chat. We will do our best to answer them, but the team will be here, our tax and accounting specialists, to help you get your questions answered throughout. And we love them, so keep them coming. Awesome. If you are heading into tax season and feeling overwhelmed, if you're looking for something different and you're like, the heck do I need to do? What are the type of services that I need? How do I approach filing taxes, whether it's your first year or whether it's your tenth year in practice. We have amazing, amazing folks on our team that are here to support you and help understand your situation and understand what might be best for you and your practice. Whether that is Heard or whether that is another pathway, we will be here to guide you and help you answer that question. And so please definitely take a moment and schedule time with our team if you are trying to figure out how to approach tax season and set your practice up for success as we head into 2026. Awesome. And then just to jump in before I hand it over to our emcee Forrest for the day who's going to be nerding out on all things accounting, our goals today and before I jump in and talk through that, the main thing that I want to convey here is there is legitimately no expectation that you come out of this conversation feeling like an accounting expert. That is a very unreasonable expectation of yourself. But if you join this conversation, you learn about one new concept, you have one new area that you wanna explore, you figured out one new tax tip or one new way that you approach managing your financial systems in your practice, I would consider that a major win. We're gonna share a lot of resources that you can follow-up with. Again, as Alena mentioned, this is recorded, so you can always come back to it and you can always reach out to our team and we can help you answer questions. But our goals here today are really to help you understand how private practices and self employed, mental health professionals and behavioral health professionals are taxed. And this is helpful for proprietors who have either started this year or been in practice for a number of years. We'll talk a little bit about confirming your tax type, understanding am I a sole proprietor, am I an LLC that's taxed as an s corp, am I a professional corp that's taxed as a c corp. We'll help you think through some of those things. We'll talk about what forms are needed. Accountants like Forrest and I like to throw around buzzwords like eleven twenty s and ten forty and c p two six one because it makes us feel really smart and confident with what we do. And so our goal is to demystify some of the names of these forms for you and help you understand why you need them, when you need them, and hopefully give you some resources so you don't have to think about them or memorize them like we do. We will also spend some time dispelling myths about extensions and helping you understand that they are okay how to think about approaching them and then end on thinking about how do we plan for the year ahead, how do we look ahead. And so without further ado, I'm very excited to hand it over to mister Forrest Perry, CPA, to jump in. Awesome. Thanks, Andrew. So just like last time, we have a few polls we're gonna share out today to keep folks engaged and also helps Andrew and I tailor the presentation better understanding where folks are at. So out of curiosity, last year, if you were self employed, how did you file your taxes? Maybe you did it yourselves. Use TurboTax from one of the online free tax USA softwares, a local CPA. Maybe we have some Heard folks out there or not d, which is super exciting. It's your first year in, private practice. Okay. So I'm looking at the results now. Local CPA, by far the biggest 50%, and then 25% who are in their first year of private practice. So kudos to you. It's gonna be hopefully, this presentation will be extremely helpful in learning more about some of those changes that occur. Oftentimes, folks ask us, like, how would you determine if I need a CPA or how to choose a CPA? Some high level guidance around this is if you haven't found one, I would start your interviews right after this webinar. Interview, do due diligence on two to three at least, and do a variety of different offerings. Because what you're gonna learn is the pricing, the level of support, or services that different CPAs or different services provide vary greatly. I always make this corny analogy. It's nothing like choosing a streaming service where you know exactly the channels, the exactly the monthly subscription you're gonna get. There's a lot of intricacies when you're getting those quotes and making sure that I wanna work with this person. And so there really is no right answer. Right? It's figuring out what's gonna work best for you. So the two high level topics we're gonna start off or spend the majority of the presentation on today is on first, confirming your tax type. This is one of the big challenges we see providers go through year after year after herd because your taxation type is going to drive, one, your tax deadlines and two, the tax forms, and then three, potentially impact how your bookkeeping records will be reconciled or adjusted at the end of the year. So the first few slides we're gonna talk and hopefully give you confidence and comfort in determining which taxation type your business has. After that, we'll get more into the tax forms, tax documents, how to track everything. But I think what's most important is this January 14. I'm sure a lot of providers last year did not start thinking about taxes until February, March, or those who start thinking about it the April, two weeks before they're due. So, Molly, you're gonna get a lot of content. You're gonna have a lot of takeaways, but give yourselves, I think, most importantly, a pat on the back because this hopefully will give you a road map, right, on what to prioritize and think about these next few months ahead of the lovely April 15 deadline, which I know is ingrained in most folks' brains. So taxation type. Right? If you're at our financial foundations live cast, this slide looks very familiar. It's good as it is. So I have the next slide where I'm gonna talk about what pass through, entities or taxation types mean. But what's critical to know here is those boxes at the bottom, right, are gonna drive those deadlines. Those are the different tax types. If you notice, you don't see LLC or PLLC bolded. Why? Because LLCs and PLLCs are taxed as a sole proprietorship. Really common confusion around that is, oh, well, I moved to an LLC last year, so that means my taxes are different this year. Not at all. Right? You're still taxed as a sole proprietor, still filing a schedule c. Now you might ask, well, then why did I form an LLC in the first place or a PLLC? That might be a, you were looking to protect your liability, keep your business and personal assets separately. Or what's also really common is you formed your LLC or PLLC because you wanted to be taxed as an s corporation. Another common confusing point is your entity, your business, or incorporation type, all synonymous terms, is not an s corp. An s corp is your tax type, whereas you're incorporated as an LLC or a PLLC. Now I'm sure there's a lot of folks here today, living in California or doing business in California. Really important disclaimer around that is as a licensed professional in California, you don't have an option for an LLC or a PLLC. That option is called professional corporation. If you are a professional corporation, your default tax status is that one on the right, a corporation. Most of the time, the providers we work, if they are in California and become that professional corporation, elect then to be taxed as a s corporation. So today's presentation is really gonna be focused on those first two taxation types, sole proprietors and s corporation. Why that is is that's where Heard expertise lies and where we find most small group practices or primarily solo entrepreneurs are those exact tax types. So if you are taxed as a corporation, just keep that in mind. Some of these some of the slides we're talking about would be treated a little bit differently and often used for much larger complex businesses. So for those that are in their first year of private practice, hopefully, this visual, starts to help explain, really, your taxes aren't that much different. And why I say that is both sole proprietors, LLCs, PLLCs, s corporations. Right? They're all pass through entities. What does that mean? That means the profit from your practice is passing through or flowing in to your personal tax return. So you have the money coming in, right, subtracted by the money going out. That gets to your profit, which you'll see that last arrow going to that form ten forty. If you've ever heard anyone say when you're paying quarterly tax estimates, they're actually personal tax estimates. That's exactly why. Right? When you're paying down your quarterly taxes, you're paying down your personal tax liability at the end of the year. Now if you're an s corporation, here's another one of those forms I'm gonna call out. Rather than a ten forty, your first step is gonna be filing an eleven twenty s. So if you are a new s corp this year, keep that in mind because you have an earlier tax deadline. You file your eleven twenty s on March 16. You get what's called a k one, and then you include that k one in your personal ten forty. As an s corp, you're not paying any taxes at a federal level when you file that eleven twenty s because the profit flows through or passes through to your personal tax return. So the big change for that 25 or 26% of folks who are brand new to practice this year is you'll have likely what's called a schedule c, assuming you're not an s corp. That schedule c is included in that form ten forty. What that is is it shows your income and expenses and profit, and then it's all taxed together. So I like to explain, like, really the takeaway around this is the taxes derived from your business are personal taxes. So when you get to the end of the year or you're going throughout the year, you're not paying a business tax and then a personal tax when it comes to this. It's really confusing, though, because you're like, wait. I I run a practice. I run a business. What about those business taxes? They didn't remember again, passing through. So passing the profits passing through from your business into your personal tax return. Andrew, anything to add on pass through or entities before we go to our next poll? No. I think you nailed it. Cool. I think the only other piece to mention is when I mentioned LLC and PLLC. We have a great resource included on all about that and how to form one. Certain states will say, hey. If you're a licensed professional, you can't be an LLC. You have to be what's called a PLLC. It's legitimately an LLC with a p in front of it, but it's really important that you choose that right one. So it's governed by the secretary of state in your local state. Fairly, I would say, not time consuming process. Most folks will work with a lawyer, but definitely check that out in with your specific state. Are you an LLC or a PLLC state? So moving on to the next poll. Gave you that information beforehand, so hopefully folks can answer this more accurately. But I'm also gonna walk through the step of if you're unsure. Right? What are some steps to do? And, again, this is gonna help us tailor the rest of the presentation today. So how's your practice incorporated? Sole proprietorship, LLC or PLLC, corporation or professional corporation, and unsure. And you don't see s corp here, right, because it's not an incorporation type. It's a taxation type. One call quickly for us from Christina. A good note in the chat. That is correct, Christina. In California, if you wanna form a professional entity as a, licensed behavioral health professional, it would need to be a professional corporation. Good call out. So kinda what I would expect, 25% folks are incorporated as a sole proprietor. That's a default. You don't have to do anything to be a sole proprietor. I have my practice tomorrow. I'm a sole proprietor. Got 66% LLCs or PLLCs. Sure. A lot of them might be taxed as an s corporation. 5% corporations or professional corporations. My hunch is most of those folks are in California in that professional corporation. And then lastly, those were unsure. So if you just started your practice this year and don't remember working with a lawyer or filing anything with the secretary of state, you can assume you are a sole proprietorship. Right? Well, what if you did taxes last year and you didn't have a lot of visibility into that process? Or maybe you were working with a not so great accountant who did stuff everything in the background and didn't tell you. Right? Call your secretary of state. They are not like the IRS where they take usually ten hours or multiple days to answer the phone. But, again, they govern that LLC or PLLC or professional corporation piece. And really important to know if you are incorporated or are a corporation because on that schedule c or the eleven twenty s, it's gonna ask for things like your EIN number, business name, or business address, and you wanna make sure that aligns all what the, secretary state is on file. Ideally, you have the approval, which is a one page document for a two page document from your secretary state with a seal on the top that says, hey. Andrew LLC was approved effective 01/18/2025. So if you can't find that, you can revert back to the secretary of state. Well, now I'm really excited, to introduce Molly, who's not only an LPC, but also a great member of Heard's team. And she's gonna share a little bit more about her journey as a self employed therapist, use a Simple Practice, tying that in on hopefully how it made it easier for taxes. So, Molly, super excited. Thanks for joining us, and we'll hand it over to you. Yeah. Thanks, Forrest. And hi, everybody. I'm Molly. As Forrest said, I'm a provider success manager at Heard, so I get to work with wonderful providers such as yourself, and help you with onboarding into our Heard system. And I'm also a therapist myself, so I'm a licensed professional counselor, and I run my practice part time now. But before starting at Heard, I was in full time private practice. And maybe like some of you, I didn't start there. And if you did, kudos. I started in community mental health. And then when I obtained my licensure, I started working for a group practice. Both of those were as a w two. And so once I became self employed in 2021, I got my PLLC, I launched my full time private practice. I was contracting as a ten ninety nine with a local company to take insurance. And I did not know how to do my taxes. I had been doing my taxes since I was a teenager, when I had my first barista job, and all of a sudden I was still trying to DIY it for the first year, and was not sure how to do that accurately, and make sure I was compliant. So within the first year, I reached out to a local CPA. He encouraged me to transition into an s corp, which Forrest touched on. I was like, I wanna save money on taxes, but it also added extra tasks and compliance factors. So I'm glad I took that step. It didn't work out with the local CPA. That's for a whole other webinar, but that's how I found Heard as a customer three years ago. I'm also a SimplePractice user, and have been since the beginning of my practice in 2021. And both of these together, Herd and SimplePractice, have been like game changers. SimplePractice has awesome billing and scheduling and everything that I needed to run my practice successfully, and awesome income data. But then I just was like, how do I organize this and track my deductions and expenses? And that's where Heard filled in the gaps. I did wanna point you to two of your new friends. These are forms that were really helpful with doing my taxes. So with Heard, they asked me to provide these forms. In simple practice, I was able just to click on the website and download them and upload them into Heard. And we have these in your resources today. So the two friends for your tax season, whether you use Heard, DIY it, or use your own accountant, is your annual financial activity report. And then my chance to sound smart is the ten ninety nine k form, which is basically just your credit card processing fees. So you should definitely download those documents, and I know SimplePractice has those available really easily when you just click on it on the website. So I'll hand it back to Forrest, and he'll he'll take it from here. Thank you so much, Molly. And, hopefully, it was reassuring for all you out there to hear as a first year provider. Right? It's normal to be worried, be concerned, not knowing where to go. Because at the end of day, most of you weren't trained, to be a business owner or be a CPA, right, during all your schooling. We're gonna talk more about those forms and resources that Molly referenced. Just also wanna call attention to the link that Janelle just shared in the chat. It's a 13 page guide around preparing for annual taxes. So great supplementary resource to review after this goes more into depth, and it's targeted exactly health and wellness providers. So, hopefully, it's a nice translator. So thanks again, Molly. Okay. So now moving into the forms, what that ten ninety nine k or NECs, miscs, w twos that you heard. We're gonna start defining out those. But before we get there, we're gonna walk through all of the important expense documentation that is required. Also introduced ten ninety nine NECs. If you haven't heard, there's about four different types of these ten ninety nines, but this one is some oftentimes one that's overlooked. So definitely pay attention when we get to that slide. So if you were at that financial foundations live cast, hopefully, you recall a little bit more about what bookkeeping is. The reason we're showing it again now, it is critical to have that your bookkeeping done for last year before you are, quote, unquote, tax ready for your CPA or accountant. Oftentimes, I'm sure we'll see in the q and a, well, does the IRS require bookkeeping? The answer is no, but it's close to impossible for a CPA or accountant to file your taxes without having bookkeeping records. So what is bookkeeping? Why it's important? At the end of the day, it's a fairly simple concept of you take the date, description, and dollar amount, and then you add a category to every expense transaction and every income transaction related to your practice or business for the year. So example, 01/01/2025, $35. So date, description, dollar amount, got that from my bank account or credit card. The bookkeeping piece comes to that last piece. That would be categorized as software services. Right? And then maybe at, 01/05/2025, you have Stripe deposit as the description for $1,500. And then that category would be individual therapy income. So we're gonna walk through some of the top, deductible expenses, which is where this categorization gets a little bit more tricky. Income, though, is also really important, especially if you're someone who's diversifying their income streams. Maybe you wanna understand how much money you're earning from group therapy income or supervision or courses versus individual therapy income, and that's one of those insights you can gain is how your business is operating. Where are those expenses trending? How is your income performing? But most importantly, it's needed for the annual taxes. Right? So you'll have the date, description, dollar amount, and that category for every transaction for the entirety of 2025, and then you hand that over to your CPA or accountant. That's what they're going to use to fill out, if you remember that form schedule c, if you're taxed as a LLC, PLLC sole proprietor, or if you're taxed as an s corp, they're gonna use those bookkeeping records to complete your November or your s corp annual tax return. Now oftentimes folks ask, well, should I work with a bookkeeper, or how do I do this? Very similar answer to taxes. Right? With bookkeeping, though, I'm more say, what is something you're gonna keep up with? Ideally, you're doing bookkeeping on a monthly basis because without bookkeeping, it's really hard to determine how much to set aside for quarterly taxes each month or how much to pay yourself. Right? If you're working with a professional bookkeeper, you'll see that word at the bottom of what bookkeeping means called a reconciliation. Purely checks for completeness and accuracy, so it ties back your bank statements into your bookkeeping records. So, again, think through how much time and effort you wanna put towards bookkeeping. Would you wanna use a spreadsheet, which works for many providers, and many providers have had their system down for the last twenty years. It's free, easy to navigate. QuickBooks is a really common software you'll hear about. They're kind of the godfather, I would say, within the, bookkeeping space. And then you have Heard or plenty of other services online. Big thing, though, if you haven't started bookkeeping yet for last year, likely, maybe you didn't even know it existed or it's just this confusing concept, put together an action plan. Maybe by the end of this month is a goal to, each every other day, work on a month. So maybe this weekend, you're gonna tackle January, February, March. Next week, April, May, June. Right? That way, at the January, you feel good, have all of your records ready to go for your account or CPA. Now when you're going through these, I'm sure you're gonna have some questions. Like, is this deductible? I don't really know how to categorize this. Keep it in those records. Flag it. Then when you meet with your CPA or accountant for the end of the year prep, you can flag those to them and ask their advice. Two pro tips on the right, the receipts is is fairly straightforward, but that bank account piece, is critical in terms of making your bookkeeping easier to do, cleaner, and more accurate. If you're an LLC, PLLC, or S Corp, it is absolutely critical that you have a separate business bank account because it could jeopardize the status of your s corporation or the status of your LLC or PLLC. And for those who are new to practice, look could have been using your personal account. Right? Very common. This year, great chance to go open up a bank account dedicated to your business. Again, it's gonna make it much cleaner. The normal villain that we see here at Heard is Amazon, and you're going through your records now and you see a purchase on Amazon in July. Was it business or was it personal? Right? So bookkeeping, often a foreign concept on what it is. Figure out what's you're gonna keep up with, what works best with you, and make sure now if you don't have your records yet cleaned up and ready for last year, get going on that, and then maybe come up with a plan on how you're gonna stay on top of it in 2026. So those common business expenses. So really excited. I think it's September, October. You'll get notifications about renew an hour long live cast on the top tax deductions for therapists and wellness providers. So, yeah, there's an hour worth of content, if not more, around this specific topic. We have a great resource in here called the complete guide to tax deductions for therapists detailed. Lists out every single one. So I'm not gonna spend too much time here. Gonna call out a few of the the really common ones that I see or where confusion lies. One being business meals. You'll see that's the only one in parentheses that says 50%. There was a time as either right at the beginning of COVID, I think during COVID, where it was a 100% to stimulate restaurants and businesses. That's only 50%, including when you're traveling for business. Business travel is another great one to think through because that is often a place where the IRS might take a secondary look. Why? More expensive, and a lot of folks have taken advantage of business travel in the past. I don't want you to shy away from including your business travel expenses in there because there's plenty of reasonable reasons. Just think twice of was this truly a a business trip or business travel. What about some of the ones that are not deductible? New car should have an asterisk next to it because I think maybe once or twice in my five years I've heard of I've seen someone actually be able to deduct their car. There's other ways with tax deductions, whether it's mileage, percent of vehicle use, but to outright buy your car is extremely difficult to make the case that we found normally in private practice. There's a big test. The IRS loves tests, and there's a full on test you have to pass to buy that car through your business. Self care is another great one to call out because at the end of the day, a business expense or tax deduction is something that is reasonable and necessary to operate your business. Vague. Right? In my mind, I would say, hey. I need to go to the gym every day or maybe get that monthly massage so I show up well to my clients or patients or show up sane to work. Fortunately, the IRS doesn't see it that same way. So that gym membership or those monthly massages would not be deductible. Now you type a lot of these on Google or ChatGPT, you're gonna find hundreds of different answers or different analysis. Right? That's, I think, both the fun and challenge of accounting and taxes. There's that interpretation piece. So one CPA might interpret your use of a business expense different than another. So while you're going through that those bookkeeping records, right, cross check that tax deduction checklist or, guide I referred to and make sure you have all those in there, especially something like CEUs that might, at the end of the year, cost up to $5,000. Every deduction or business expense that you have in those records are going to help reduce your taxes at the end of the year. Andrew, anything to add in here so far or common themes that are coming up from the q and a's that we should clarify? No. I think there's just individual questions. We have the great guide that Forrest had talked about us sharing, and I think we dropped that into the chat as well. But it would be fun in the chat to see what are some of the deductions that you either heard about from your CPA or that you're looking to take in the current tax here as well. But, Forrest, I would probably keep it rocking. Cool. Alright. Ten ninety nine NECs. We're starting with this because if you look at number four, they're due February 2. We normally don't have this slide in here as a dedicated slide, but Molly and Morgan during our some of our preparing for tax season webinars in December told me how many questions they're getting about this. Right? And the more I thought about it, it it makes sense because this is another one of those minute elements that is easily missed, and you would not do this if you were not self employed. Right? So if you're brand new to being self employed, this could be a new tax obligation or form that you need to fill out. Don't mix these up with the ten ninety nine mix. We're gonna go over that shortly, but you are likely gonna receive ten ninety nines yourself from that group practice or agency that you're contracting for. In a similar fashion, if you are paying someone for services such as, let's say, rent, and you didn't pay them with a credit card and that amount was over $600 for this year, you'll need to file a ten ninety nine NEC. So, again, if you paid someone for a service from your business, well, it was a biller or an admin or rent, right, and it wasn't using a credit card, so usually that's cash or check, you will need a file, a ten ninety nine NEC for them. Don't worry. It's actually a really simple form, and that graphic that we mocked up almost mirrors exactly what those inputs are. What's great about why we're having this live cast now is it gives you time to hopefully plan accordingly to fill this out. You'll see in that step three, gather the w nine. That is a document that gives you, quote, on kind of like their quasi employer, right, the tax information, that's corresponding to them. Right? So their tax identification number, maybe they have a business name. And the goal of this from the IRS is so that they're able to ensure like, say, I'm renting that office from Andrew. I file a ten ninety nine a c for Andrew so the IRS knows that Andrew needs to claim that income as part of his tax return. Another benefit of bookkeeping. Right? Like, it's really hard knowing at the end of the year who you might have paid that $600 or more to. And then from there, if they didn't pay with a credit card, make sure you have that w nine and file that 1099 NEC. I believe there's some free services online or very cheap. This is not something that should be hundreds of dollars or thousands of dollars. So that might be a scammy website or CPAs potentially trying to take advantage of you. Or you can always do it the old school way. If you just type in ten ninety nine n e c IRS, you can download that and then fill that out. So again, keep this in mind because it's due February 2, and not everyone is gonna have to file one of these. Right? You get over 600 not paid via credit card. Okay. So business income. Right? So that wraps up the expenses section. You heard Molly reference that ten ninety nine k. Right? You just heard me reference the ten ninety nine NEC, and I'm sure everyone has received a w two. Very common that you'll have a multitude of these. Maybe multiple ten ninety nines, multiple w twos, maybe you worked as a w two for the first six months, and then may delete to open your own practice and then started to have this ten ninety nine NECs. Briefly gonna walk through some light revenue or accounting adjustments just to familiarize y'all, talk through how w two income incorporates all into this, and then Andrew is gonna spend a few minutes talking about multistate taxes as we're continuing to see the rise of those in the world of telehealth. Okay. So spelling out some of those forms. W two, I'm not gonna spend much time on because everyone I'm sure in this live cast has received a w two at some point in their life for those new providers. If you had a mix of w two and self employed income, don't worry. It's not gonna make your taxes much more complex, and it's super normal that we'll see that. If you're a new s corp though, you should have been paying yourself payroll last year. Right? And you're it sounds bizarre. But if I'm an s corp, say Forest Perry Therapy Practice LLC, I would get a w two from myself as the owner. And so even though it's my business that's paying me this reasonable salary via w two, I'm gonna be sure to capture that and include it in my annual taxes. Then you have your $10.99 NEC. Think about this as if you're contracting for a school, the hospital, or a group practice. Right? That's gonna show you how much you earned from that contracting position. If you do not get that by that February 2 date from a contractor or group practice that you worked at, definitely reach out to them. So if you're someone who did have a bunch of contracts last year, maybe make a list each time you get one, whether it's the mail or through online, cross it off, check it off. Right? Because you're gonna need all of those ten ninety nine NECs and w twos when you're getting to that tax preparation piece. And then the ten ninety nine k. So this is what Molly referenced. There's that great SimplePractice resource on. Great news is you'll see that, that we parentheses after that informational. So this one is not included in your tax return, but your accountant or CPA is likely gonna use this to make a revenue or accounting adjustment. Andrew's gonna talk a little bit more about this shortly in terms of cash versus accrual basis and what you see in terms of financial records, maybe in SimplePractice versus your business. But the at the end of the day, that $10.99 k, what it does is show you how much credit card processing fees you've paid. You might wanna throw up if it's your, first year in practice and you see how much those are because they add up quickly and they're expensive, but there's usually no way of getting around it. The big piece about this ten ninety nine k, right, those credit card processing fees have already, been paid throughout the year. When you get paid from Stripe and you get that deposit from Stripe, that's net of credit card processing fees. I do wanna call out that they changed the guidance this year, so you've had to receive 20,000 in credit card payments. So this might be one you got last year, but if you didn't have more than $20,000 in credit card payments, you wouldn't receive. I'm not gonna necessarily walk through in-depth on what each one of these includes. Hopefully, that walked through the high level of these different forms. I would say the big piece is if you think you should be getting one of these at the end of the month of January, you don't, Right? Make sure you get them. The other piece of the $10.99 is, I think, another good call out is you wanna make sure they all align to the same EIN, TIN number, or business name. If you used multiple EINs or TINs throughout 2025, it'll require multiple annual tax returns. So if you catch that now, they might be able to switch that ahead of you filing your taxes because, again, it's much more of that informational style change. Alright, Andrew. I'll hand it over to you for a little bit. Yeah. Gotta take a breather after that one. That's a lot of information to share for us. How is everybody feeling? Drop into the chat how you're feeling. I know we're providing a lot of information. It could be overwhelming. I know a lot of folks oftentimes can feel discouraged because they're like, oh my gosh. It's too much. But, again, you can always come back to it. Big shout out to Kimberly and Cynthia and Natalia and everybody else that's asking questions. Please keep the questions coming into the chat. Someone had said, oh, dumb question. There is no such thing as a dumb question. This is our safe space to to ask accounting questions, and so really grateful that you are here. We have lots of resources. You can always come back and review this. And one thing to say before I just jump into this is, like, we're talking about the, like, best practices for all these things in different forms, and, like, there's no expectation you get to the best practice right away. And so, grateful that you are all here. Really quickly on this because I know we only have fifteen minutes left. H. D. And Simple Practice are complimentary, not conflicting. A lot of people will come and join H. D. And be like, but Simple Practice says my revenue is this. And Simple Practice is at the clinical and session level. There are reimbursements that are outstanding for sessions that have taken place that you haven't gotten paid for. The difference from an accounting standpoint and a little bit of what Molly talked about is that what you earn in your practice and represent on your tax return, in 99% of the cases, you're going to be using the cash basis. And so what matters here is that what you've actually earned, what's actually been paid out from insurance reimbursements or private pay or through the EAP or however you're getting paid is represented on your tax return. And so what's different about this is insurance payments often arrive weeks after sessions, months in certain case. Sometimes they give you, like, these weird prepaid credit cards. I I was gonna go into more depth there, but we don't need to. We will pause. Credit card processors report gross payments while banks receive net deposits. Simple Practice will show the income that hasn't hit your bank account yet. This is extremely helpful for managing your practice on a day to day basis. But what Heard or QuickBooks or any other bookkeeper account that you might work with is helping you understand how that translates back to your actual cash based financial position of how much income has hit your bank account, how many expenses have gone out, what is the profit that's left over, and what are you gonna tell the IRS at the end of the year. One other thing to note before we jump to the next slide here is Forrest talked about the ten ninety nine NEC and the ten ninety nine ks and a certain threshold at which the part the other party may need to give you those, regardless of that threshold, you still need to represent the expense if it's a ten ninety nine NAC or the income if it's a ten ninety nine k. And so just because you didn't get a form doesn't mean that you don't need to report the income or report the expense. Okay. So many questions in the chat on multistate taxes. After 2020, telehealth became an incredibly prominent thing. Cross state licensure became real. There were things like the social work compact, PSYPACT, and all of these different cross state licensure agreements that enabled folks in a very positive way to support start supporting under supported communities where there isn't a density of providers, but there is a risk associated with that. Right? When you're operating across state lines, even remotely, every state has their own income tax laws, and that can influence whether you owe tax in the state or you don't owe tax in a given state. And so things for you to be thinking about. And my recommended recommendation here before I talk through the details is that, please, if you're operating in multiple states and you're earning a sizable amount of income in multiple states, have a conversation with a professional. It doesn't have to be Heard. It can be your local accountant, your CPA, but talk to somebody to help you think through this and understand because you don't wanna have any sneaky surprises at the end of the year or some sort of triggering event that would cause you to have to pay back taxes or anything like that. What's gonna influence this? Where you live and work. You'll always file taxes in your home state, but what will also influence this is where your clients are located and where you're getting paid. In some states, we'll again require additional filing if you earn income from there. I love the sad face on this. I don't know if this was a Freudian slip or not, but it is a sad face. Every state is different. There's thresholds. There's rest reciprocity agreements. There's physical nexus in certain states. So some states will tax you if you have a physical presence in a state or if you've been there a certain number of times. Other states will tax tax you based on income nexus, and so you have an income threshold that you've passed. And so the rules vary. There are certain qualifications to take into consideration. Of course, there's no sales tax on therapy. So if you receive some weird forms that are acting you asking you to collect or remit sales tax, that might be something that you just wanna double check with an accountant. But, again, we could spend a whole presentation on this, but I did just wanna make sure that we cover this because it can be extremely overwhelming. Feel free to drop questions into the chat before I hand it back over to Forrest. We'll be here to answer them. You can always, schedule time with our team to figure out if there's somebody, at Heard or elsewhere that can help you with this. It's I've been reading the chat where you've been chatting. I think what's really enlightening is how much information and content is here. Right? And I think for everyone out there, think about this as, the intro or one on one to each one of these tax concepts. Just about every slide, we can spend an hour on and do probably a two week boot camp on preparing for annual tax season. So encourage everyone to check out those resources, not only linked down on the side, but as well as in our website because just about every one of these topics, we go really, really deep, and it gives you another lens or opportunity to learn more. One last clarification on that last point, the no sales tax on therapy, that is therapy services. So if you sell journals or t shirts, merchandise, something like that, assess if you may hit that sales tax threshold. So I'm gonna skip this next poll, but I will tell you from all the webinars I did last month around this that, almost 20 to 30% of providers filed extensions last year. I don't know why that n is showing down there below, but it says 20,000,000 business filed extensions last year. But, again, from a provider standpoint, we see about 20 to 30% folks doing that. So there's a lot of myths around extensions. The one first one is like, oh my gosh. I'm in trouble with the IRS or they're bad. Right? Tax extensions can be a great strategic tool if used correctly. The biggest mistake I see folks make here is they file their extension and then don't make a payment. The IRS does not say, hey, Andrew. You can just wait six months to pay us. When you file your extension, you have to estimate your tax liability owed for the prior year. So another piece of advice, don't wait until April 14 to file that extension. Because if you get to that tax liability box, you're gonna be like, what the heck do I put here? Most folks will work with a CPA or accountant when doing this filing the extension because like I said, that number takes into consideration everything from your business, your personal side because it's a pass through entity and paid at once at the end of the year. Then after you file that extension, we'll share the deadlines here in a second. You don't wanna ideally wait, wait, wait, wait, wait to get it filed. Why that is is that that estimated tax liability that you paid with your extension is less than what you actually owed. You'll see that last bullet. There are fines and penalties that the IRS will assess. One of the great pieces of advice I always have is like, hey, maybe you're learning all this today and you realize I got a lot to get done on bookkeeping, but I also have maybe my honeymoon or getting married or big personal events going on. You could always file your extension now. You could be proactively ahead of the game and file it and then say you still file your return on time. That's fine. So if you wanna just do it as a precautionary measure, that is still a okay. So the big takeaway here is if you're getting to either kind of that last few days and you're waiting for one last form or you know now that you just want some extra time, it's really common for s corps because they're due March 15. Check out the tax extension form, chat with your CPA or accountant about it. You can actually file an extension through TurboTax as well, but it's that tax liability piece. So make sure that you file that, or pay the corresponding amount of that tax liability from last year. So here are those tax extension dates. As I mentioned earlier, if you're an s corporation, your taxes are due on March 16. That's the same day when your four or your extension would be due as well, form seven zero zero four. Same thing applies for your individual return or your form ten forty. If you're gonna extend that, which is due April 15, you fill out a form four eight six eight. See on the right, each one is extended six months. Please, though, like I said, don't wait until September, October, to get through that. Alright, Andrew. Hand it back over to you. Yes. Sarah, great question. We always like to talk about, having a multitude of options. So Heard is a full service accounting service, and so we have software plus accountants. But it's not the right fit for everyone, and so working with a CPA or an accountant is possible as well. Awesome. So starting to strategize on 2026 tax season soon. So looking ahead, let's assume that you are, you know, planning or maybe think you might be able to earn over a 100 k in profit. An s corp might be able to help you lower your self employment taxes in the new year. I know if you've probably made a sizable amount of money, let's say, over 80 k or a 100 k, you've looked at the self employment tax on your tax return and said, oh my gosh. That's an insane amount of money. Just as a general threshold, if you're below 60 k, you definitely don't want to explore becoming an s corp. 60 k to 80 k, you might start thinking about it. 80 k to a 100 k, it starts to look more reasonable. But certainly after a 100 k in profit, you might think about becoming an s corp. Other ways that you might be able to start thinking about saving some money on your tax returns, exploring retirement accounts, things like a SEP IRA or a solo one k. While we're not investment fiduciary's nor we provide investment recommendations, these are strategies that providers can take to invest in their financial future and reduce their overall tax liability. If you are exploring whether or not an s corp makes sense, Molly just dropped a s corp quiz in here to see if it is a good fit for you and your practice, and so feel free to jump in there and check that out. And, Jesse, a 100 k in profit, not a 100 k in gross there. And then I don't think we'll spend too much time here, but Molly called this one out as when I was asked her from a therapist point of view what was missing or critical. Again, this is a topic all on its own of calculating quarterly tax estimates, but we feel remiss by not letting y'all know that tomorrow q four tax estimates are due. Right? The last chance you have to make a tax estimate for the year 2025. If you missed some of those maybe throughout last year, a great chance to catch up. If you haven't paid any yet this year and you do your calculation, you're like, I don't have anywhere close to this money, pay as much as you can now because that will help reduce fines and penalties over these next few months, and then also help estimate what that liability owed on April 15 is so that you could use these next few months to financially plan. Again, just like everything we've been talking about today, you might have been like, oh my gosh. I didn't know this. I should have known this, or why didn't I pay these quarterly taxes? You're not alone. 40% of providers last year during our financial trend report answered they didn't make one tax estimate last year. Again, whole presentation on its own. We got some great resources and documents around how to calculate this q four tax estimate. But, again, make it something tomorrow if you can rather than nothing at all because the IRS system will shut off. Alright, Andrew. Hand it back to you, and then we'll open up to q and a. Alright. Great. Okay. Need help with twenty twenty five taxes? Heard is here to help. Tax season doesn't have to feel Oops. Oh, yeah. We have a free, consultation link here. We'll also have a QR code. We'll drop that into a chat. Spend time connecting with our team. We can help you understand if it's a good fit for you and your practice. Tax season doesn't have to feel overwhelming. I mean, the reality is tax season is a challenging thing, and regardless, it might feel overwhelming. I know, our tax and accounting team internally is probably feeling a little bit of that pressure right now and the stress from a lot of the folks that we're providing. And so, whether we like it or not, it probably will be overwhelming. But our goal is to be here as a support mechanism for you. We provide year round tax report, year round accounting support. If you're an s corp, we have payroll. We help you with quarterly tax estimates. And so we'll organize your books throughout the year, help you understand as caseloads change, what your tax liability looks like. We'll return we'll review your returns with tax professionals. You can set up meetings live with a tax preparer at the time of filing to review the return. Lots of folks have asked, hey, but I'm also married, and I have a personal tax return to file. We do file both business and personal tax returns whether you're an s corp or you are set up as a sole proprietor and have a partner that you file with. And we do provide clear guidance and lots of reminders and dates so nothing gets missed during the busy client weeks. The thing that we are most passionate about is ensuring that you don't have to navigate your finances alone. And so you have direct access to the amazing experts like Morgan and Michael and Justin and everyone else behind the scenes at Heard to ask your questions throughout the year. You can fit it into your schedule. I know a lot of our providers will, shift their Heard work to their admin day on Monday or Friday or however they schedule their week, and then we provide guidance that scales as your practice grows, whether or not it makes sense for you to become an s corp to set up payroll, if you have a different business tax return, if there's a dis a different business decision that you need to make. So even after cutting out, I think, four or five slides in the last twenty four hours, here we are right in the nick of time. I'm sure a lot of folks have to run two sessions or or to go to their next commitment. Andrew, myself will stick around for the next ten to fifteen minutes to do some more live q and a. I know we've had our team in the background answering a bunch. I'm not sure how many, but it's been hundreds of questions in the background. So even though you maybe have to jump now, hopefully, you got a few of those answers. But just sharing this consult screen once more, a few deadlines that are coming up. So February 26 is our deadline if you need s corp taxes done because, again, right, that's due 03/15. We wanna set up a buffer so we can set you up for success. And then March 2 would be the deadline to sign up if you want assistance with transforming to an s corp. The IRS deadline is for 03:15 or March 15 for that. And so, again, gives you a buffer to get set up, give us the documents you need, make sure you're gonna save on taxes from being an s corp, and they get you all set up there. So that QR code and links that have been shared out there, go to that free consultation page. Has three questions, goes right to a calendar, and then you'll meet with one of our wonderful new business advisers, and they can share that promotion code as well as you see on the bottom right. We're often all simple practice members, which is exclusive to specifically simple practice, 25% off your annual plans. Not only is her deductible, but a great way to save some money. So I know we're here at the bottom of the hour. Happy to stick around and answer questions. Thank you so much, Janelle and Alena, the whole Simple Practice team, as well as Heard team here who's been supporting us in the background. And I know there's a lot of information. I'm even exhausted walking through it all, and I've done this, I don't know, probably 40 times in the last few months. So thank you again for sticking around, and we'll move into q and a unless Alena or Janelle, you have anything you wanna add. No? Cool. Well, luckily, Morgan, I know, been in the background prioritizing some of the ones for us to go through. So I'm gonna look at this right now. And, Andrew, feel free to put me on the screen that you see right away. Let me go ahead and drop this one on the ten ninety nine n e c. I'm gonna share this up here for us then if you wanna jump in. Perfect. So from my understanding, if you're paying not in credit card oh, I was looking at another NEC on the left. My bad. So if we are an LLC operating solely, would we not have a need to have a $10.99 NEC? From my understanding, that is not the case. Right? Because if you had paid more than $600 for a service, then it would still require that $10.99 NEC. Again, the big thing is that most things most of are paying with credit card. So this is only happens if you're not paying credit card and you paid more than $600. I mean, Michael or Justin, feel free to correct me in the chat. But my understanding is the best way to put, but it's uncommon. A lot of folks haven't run into this yet, which is why we wanted to put a slide on it. Awesome. We couldn't. Yeah. Let me the profit threshold for electing to be an s corp? And can you touch on those earlier deadlines again? Yes. Absolutely. So profit threshold varies. Right? So there is profit is one of the inputs in determining if an s corp is gonna be a good fit for you and your practice. During our consultations, we can actually now run through an assessment with you to give you that exact savings. On the conservative side, normally, nine out of 10 times, if you make more than a $100,000 in profit, an s corp's gonna make sense. If you're below that level, slightly below, there's also a chance. If you're at 50 or 60,000 in profit, you're likely gonna pay more in taxes as an s corp. That's why we always recommend going through a savings assessment first to ensure that you're actually gonna see those tax savings. In terms of the deadlines, I'll walk through from the IRS side first and then, conclude with some of the ones that correspond to Heard. So the first one being February 2, that's when those $10.90 nines you would need to be sending in due. March 15, if you were taxed as an s corp last year, and you would need to file your return or your s corp extension by March 16. Why it's not the fifteenth? It's the fifteenth falls on a Sunday. March 15 is also the deadline if you were incorporated last year and you wanna be an s corp for the entirety of 2026. Right? So if you're doing that s corp election or filling out your form two five five this year because you see those savings, right, that you would wanna have that filed by March 15. And then April 15. Hopefully, that date, date is ingrained in everyone's brains. That's when everyone has to file their personal tax return. So the ones that I mentioned about her, right, are just usually a few weeks ahead of time because the last thing we wanna do is sign you up on that deadline, and then you'd be like, alright. Create my s corp. I'll say no. Right? So that's why we have these buffer time lines. First one is if you want annual tax support for your s corporation, you'd need to sign up by February 26. If you want help transitioning or forming into the s corporation, that would be March 2. And then that promo code that we shared earlier, it's March 30 or thirty first. I always forget if that has thirty or thirty one days. One last piece on s corp just because I know it's such a timely topic right now is remember you have to be incorporated first. So if I'm the sole proprietor right now and I'm like, I did this assessment or quiz through Heard and learned from my new business adviser, I'm gonna save a lot on taxes. My first step is to incorporate. So tomorrow, right, go to my friend who's a lawyer and say, hey. Can you help me perform or form my PLLC in Washington state? Washington is a PLLC state. Right? From there, I would immediately wanna incorporate. Once my incorporation or PLLC is approved by Washington State, let's say that's January 30, that's when my s corp would start January 30. So January 1 to January 29, I would be taxed not as an s corp. And then January 30 until the end of the year, I'd be taxed as an s corp. Why I'm saying that is the longer you wait to incorporate, if you see s corp savings, the lower your savings go for the year because you can't date your s corporation before the incorporation date. That was a great question. I probably totally overanswered it with too much information and deadlines. So I apologize, but, hopefully, that that came through alright. Andrew, I'm a let you answer the next one. We love your answers, Forrest. We are grateful for them. We might not have covered this throughout the presentation, but taking a quick step back on quarterly taxes, if you anticipate having a total tax liability of over $1,000, which very roughly means that you've probably had about four or five thousand dollars in business profit in the given tax year, you'd be responsible for filing quarterly throughout the year. But if you are net new to practice, welcome, Alena. Congratulations on making the jump. You would not be responsible for paying taxes, but stay on top of those expenses. Well, you'd personal taxes, yes. But, as it relates to, filing additional quarterly taxes, no. But stay on top of those expenses, and, you can talk to a tax professional to figure out if it makes sense to roll those into the upcoming tax year depending on when you started your tax or when you started your practice. And I'm gonna answer one from Molly, which actually came in from the chat, same theme of quarterly taxes. Do I pay quarterly taxes for my business account if I also have a w two? So first thing I would say is because they're personal tax estimates, it's actually best to pay your quarterly taxes from your personal bank account. Remember these pass through entity concept that we were talking about earlier. Now if you have a w two, the great piece is it's likely gonna reduce the quarterly tax estimates owed. So as a w two employee, right, you get that paycheck every two weeks. Any one of those paychecks, you see all the money that's automatically withheld and taken out by the IRS and state. Federal withholdings. Right? That withhold withheld amount is going to the same bucket that your quarterly taxes are going. Right? Personal tax estimates, which is why it's such a critical concept at the beginning. So, again, if you have a w two, you may still owe quarterly tax estimates. But when you're doing your calculation, you wanna take into account how much did my w two job already withhold for taxes. Same thing if you're married finally jointly and have a spouse. If they are also a w two employee, it's going into that same pot. So you could have your w two withholdings going into here, your spouse's withholdings going into here, and then your quarterly tax estimates going into here. Those are all listed on your ten forty. There'll be a line item that said how many quarterly taxes, miss, did you pay last year, and it's going to that same personal tax liability balance. If for any reason you overpay, you would get that money refunded, come when you file your tax return. So we think Andrew answered one one or two more here. I was gonna say we have one more from Molly that is an awesome opportunity for telehealth based therapists, and then we can probably wrap it up unless there's anything else that comes through. Okay. What was, Molly? so missed it if you haven't. seen him. Context on the question is usually helpful. Molly said, thank you. Hugely informative. Shout out to Forrest and his wonderful emcee. I still have a question about how home office deductions are handled. Maybe you talk about the two different approaches, Yeah. and keep it pretty high level. And, Molly, thanks for, keeping me honest. I had that in my note on that slide because that's one of the key deductions that was missing there. So there there's two approaches. There's the simplified method, which is a set dollar amount per square foot of your office. And then there's the actual method, which is gonna use the legitimate ex a percent of the expenses related to your home. The second option normally has bigger savings, but also requires more record keeping. Normally, do not recommend keeping your home office expenses in your bookkeeping records because you're only giving a fraction of them. So another great activity to do these next few weeks, go back for this year. What was my rent and mortgage for each month? What was my electricity bill? Homeowners insurance. We have a great actually, calculate on our website as well to calculate this home office deduction. And so at the end of that, each all the expenses, right, row one, all the months, and and let's say you spent $10,000 on home expenses. And then my office is a 100 square feet or my apartment is a thousand square feet. 10% of my house is my office. I would then take that 10, multiply it by the $10,000. Therefore, my home office deduction would be $1,000. Obviously, really simple math. And that method is on its own home office deduction worksheet, or CPA or TurboTax would be filling that out. And then the last piece to mention is the test. Make sure you qualify for the home office deduction. Some of the times I see this is I have a studio apartment, or I work more in an external office than my home office. So there's some great decision trees or little tests or just double check with your CPA or accountant, but not everyone qualifies for the home office deduction. And sorry. If you haven't realized, it's really hard for me to answer a question simply just because I it brings back all these questions that I answer in the webinars, and it's always a waterfall effect. Well, what about that? What about that? So hopefully, it's not overwhelming and ends up providing more of that that clarity. But I think that home office one is a a great one to go on and great to see. We still had a 230 people here listening in to this q and a. We're super excited to come back. We're actually gonna do s corporations this summer, and so keep an eye out for that. But use all those resources we shared. Check out those consultations if you have those high level questions or wanna get a better idea of what Heard looks like. And then Andrew, as our trustee CEO and cofounder, I'm gonna give you the opportunity to to close it out. That was a great rally cry for us. That is exactly what we needed. No. Just a thank you to Isabelle and Janelle and Alena for having us again and setting us up for success, and I hope everybody has the most wonderful rest of your week and all. Alena, do you wanna give us a send off? You're back on stage with us. Yeah. No. Thank you both so much. I think this was really, really helpful and valuable for a lot of people. So and thank you for staying after and taking some time to answer the q and a. We really appreciate it.