Tax Write-Offs for New Aba Practices: The Complete List

2026-08-21

Discover the complete list of tax write-offs for new ABA practices, including startup costs, equipment, software, and more. Save money with these deductions.

Starting an ABA (Applied Behavior Analysis) practice involves significant upfront costs, but many of those expenses can be deducted from your taxable income. This guide covers the complete list of tax write-offs for new ABA practices, from startup expenses to ongoing operational costs. By understanding what you can deduct, you can reduce your tax bill and keep more of your hard-earned revenue.

Startup Costs (Deductible Up to $5,000)

When you launch your ABA practice, you incur costs before the business officially opens. The IRS allows you to deduct up to $5,000 in startup costs in your first year, with the remainder amortized over 180 months. Eligible startup costs include:

Market research and feasibility studies
Advertising and marketing before opening
Training staff before opening
Legal and accounting fees for setting up the business
Licenses and permits (e.g., state ABA licensure, business registration)
Office space setup (rent, utilities, furniture, equipment)

Example: If you spent $7,000 on startup costs, you can deduct $5,000 in year one and amortize the remaining $2,000 over 15 years.

Office Space and Rent

If you rent an office or clinic space, the rent is fully deductible as a business expense. This includes:

Monthly rent payments
Utilities (electricity, water, internet, phone)
Property insurance
Janitorial services

If you work from home, you may qualify for the home office deduction. The simplified method allows $5 per square foot, up to 300 square feet, for a maximum deduction of $1,500. The regular method requires calculating actual expenses (mortgage interest, utilities, repairs) based on the percentage of your home used exclusively for business.

Equipment and Furniture

Furniture and equipment used for your practice are deductible, but the method depends on the cost:

Section 179 Deduction: Allows you to deduct the full purchase price of qualifying equipment (e.g., desks, chairs, computers, therapy tools) in the year you buy it, up to a limit. For 2026, the limit is $1,160,000, but most new practices will be well under that.
Bonus Depreciation: Allows an additional 80% first-year deduction on new equipment, and 80% on used equipment in 2026.
Standard Depreciation: If you don’t use Section 179 or bonus, you can depreciate the cost over 5-7 years.

Example: You buy $10,000 worth of therapy equipment. With Section 179, you deduct the full $10,000 in year one.

Software and Technology

ABA practices rely on specialized software for scheduling, billing, and data collection. These expenses are deductible:

Practice management software (e.g., CentralReach, Catalyst, or similar): $100-$300 per month, deductible as a business expense.
Electronic health records (EHR) systems: $50-$200 per month.
Billing software: $30-$100 per month.
Accounting software (e.g., QuickBooks): $30-$100 per month.
Data collection apps for therapists: $10-$50 per month per user.

If you purchase software outright (perpetual license), you may need to depreciate it over 3 years, but most modern software is subscription-based and fully deductible in the year paid.

Professional Services

Fees paid to professionals are deductible:

Legal fees for contracts, incorporation, or compliance
Accounting and bookkeeping fees
Consulting fees for business or clinical advice
Billing and coding services if outsourced

These are fully deductible as ordinary business expenses.

Employee Costs

Your staff is your biggest expense, but also your biggest deduction. Deductible employee costs include:

Salaries and wages
Payroll taxes (employer portion)
Health insurance premiums for employees
Retirement plan contributions (e.g., 401(k) matching)
Workers’ compensation insurance
Professional development and training
Background checks and credentialing fees

If you are a sole proprietor or LLC owner, you can also deduct your own health insurance premiums (subject to limits) and retirement contributions (e.g., SEP IRA, solo 401(k)).

Marketing and Advertising

Marketing costs to attract clients are deductible:

Website design and hosting: $500-$2,000 for design, $20-$50/month for hosting
Search engine optimization (SEO) services: $300-$1,000/month
Pay-per-click advertising (Google Ads, Facebook Ads): $500-$2,000/month
Print materials (brochures, business cards): $100-$500
Networking event fees
Client referral fees (if allowed by your state’s regulations)

Continuing Education and Training

To maintain your BCBA or RBT certification, you need continuing education. These costs are deductible:

CEU courses: $50-$200 per course
Conference registration and travel (if business-related)
Professional memberships (e.g., APBA, state associations)
Training materials and books

Vehicle and Travel Expenses

If you drive to client homes, schools, or other locations for business, you can deduct vehicle expenses. Two methods:

Standard mileage rate: For 2026, the IRS rate is expected to be around $0.70 per mile (check current rate).
Actual expenses: Deduct gas, oil, repairs, insurance, and depreciation, but only for the business percentage of use.

Keep a mileage log to substantiate your deductions. Travel expenses for conferences or training (flights, hotels, meals) are also deductible if the primary purpose is business.

Insurance

Professional liability insurance (malpractice) is essential for ABA practices. Premiums are deductible:

Professional liability: $500-$2,000/year
General liability: $300-$1,000/year
Business owner’s policy (BOP): $500-$1,500/year
Cyber liability insurance (if you store client data): $500-$2,000/year

Miscellaneous Deductions

Other deductible expenses include:

Bank fees and merchant processing fees
Interest on business loans or credit cards
Office supplies (paper, pens, therapy materials)
Postage and shipping
Business meals (50% deductible) when discussing business with clients or colleagues
Client entertainment (if business-related, 50% deductible)

How to Track and Document Deductions

To maximize your write-offs, you need a system:

Open a separate business bank account and use it for all business transactions.
Use accounting software (e.g., QuickBooks, Xero) to categorize expenses.
Keep receipts for all purchases, even small ones. Use a receipt scanner app like Expensify or Shoeboxed.
Track mileage with a dedicated app (e.g., MileIQ, Stride) or a logbook.
Review your expenses monthly to ensure you’re capturing all deductions.

FAQ

Q: Can I deduct expenses incurred before my ABA practice officially opened? A: Yes, startup costs up to $5,000 are deductible in your first year, with the remainder amortized over 180 months. Keep records of all pre-opening expenses.

Q: What is the home office deduction, and can I claim it if I see clients at home? A: The home office deduction allows you to deduct a portion of your home expenses if you use a space exclusively and regularly for business. If you see clients at home, that space qualifies. Use the simplified method ($5 per sq ft, up to 300 sq ft) or the regular method.

Q: Are ABA therapy materials deductible? A: Yes, therapy materials such as toys, books, and assessment tools are deductible as supplies or equipment, depending on cost. If they are used within a year, they are supplies; if they last longer, they may be depreciable.

Q: Can I deduct my own salary as an owner? A: If you are an S-corp, you must pay yourself a reasonable salary, which is deductible as a business expense. If you are a sole proprietor or LLC, you cannot deduct your own salary, but you pay self-employment tax on your net earnings.

The Bottom Line

New ABA practices have many tax write-offs available, from startup costs to ongoing operational expenses. The key is to track every expense and understand the rules. Work with a CPA who specializes in small businesses or healthcare to ensure you’re maximizing your deductions and staying compliant. Start implementing a tracking system today, and you’ll save money come tax time.