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

2026-08-21

Discover the complete list of tax write-offs for new physical therapy practices, including startup costs, equipment, software, and more. Maximize deductions legally.

Starting a physical therapy practice comes with significant upfront costs, but many of those expenses can reduce your tax bill. As a new PT practice owner, you can deduct a wide range of business expenses, from equipment to marketing, as long as they are ordinary and necessary. This guide lists the most common write-offs, with realistic 2026 figures, so you can plan your deductions and keep more of your revenue.

Startup Costs (Section 195 Deduction)

You can deduct up to $5,000 in startup costs in your first year, with the rest amortized over 180 months. Costs include market research, legal fees, and training. If your startup costs exceed $50,000, the $5,000 deduction is reduced dollar-for-dollar.

Example: You spend $12,000 on legal and marketing before opening. Deduct $5,000 in year one, amortize the remaining $7,000 over 15 years.
Action: Keep receipts for all pre-opening expenses, and ask your accountant to file Form 4562.

Equipment and Furniture

You can deduct the full cost of equipment (e.g., treatment tables, ultrasound machines) using Section 179 or bonus depreciation. For 2026, the Section 179 limit is $1,220,000, and bonus depreciation is 80% for new assets. Used equipment also qualifies for Section 179.

Example: A new treatment table costs $3,000. Deduct the full amount in year one via Section 179.
Action: Track all equipment purchases, including shipping and installation, and ensure they are placed in service by December 31.

Software and Technology

Practice management software, EMR systems, and billing software are fully deductible as business expenses. If you subscribe monthly, deduct the monthly fee. If you buy a perpetual license, depreciate it over 3 years.

Typical costs: EMR software ranges from $200-$500 per month per provider, and practice management tools from $100-$300 per month.
Action: Review your subscriptions and ensure they are used exclusively for the practice.

Office Rent and Utilities

Rent for your clinic space is fully deductible, as are utilities like electricity, water, and internet. If you work from a home office, you can use the simplified method ($5 per square foot, up to 300 sq ft) or the actual expense method.

Example: A 1,200 sq ft clinic at $25/sq ft/year costs $30,000 annually, fully deductible.
Action: Keep lease agreements and utility bills organized monthly.

Employee Wages and Benefits

Salaries, bonuses, and payroll taxes for your staff are deductible. Health insurance premiums you pay for employees are also deductible, and you may qualify for the Small Business Health Care Tax Credit if you have fewer than 25 full-time employees and average wages under $56,000.

Typical range: Physical therapy assistants earn $25-$35/hour; front desk staff $15-$20/hour.
Action: Use a payroll service to track wages and tax filings accurately.

Professional Services

Fees for your accountant, bookkeeper, and attorney are deductible. This includes tax preparation, business formation (LLC or S-Corp), and contract review.

Typical costs: Accounting fees $1,500-$5,000 annually; legal fees $2,000-$7,000 for formation.
Action: Pay these professionals separately from personal services to keep records clean.

Marketing and Advertising

Website design, SEO, Google Ads, social media ads, and printed materials are all deductible. For 2026, the standard deduction for marketing is not limited, but you must keep proof of business purpose.

Typical costs: Website design $2,000-$10,000; monthly SEO $500-$2,000; Google Ads $1,000-$5,000 per month.
Action: Track all ad spend and create a marketing budget for the year.

Continuing Education and Licenses

Course fees, travel, lodging, and meals for professional development are deductible. State licensure fees and DEA registration (if applicable) are also deductible.

Typical costs: CEU courses $200-$1,000 each; license renewal $100-$300 annually.
Action: Attend conferences that are directly related to your practice, and save all receipts.

Insurance

Professional liability (malpractice), general liability, property, and workers’ compensation insurance premiums are fully deductible.

Typical costs: Malpractice insurance $2,000-$6,000 per year; general liability $500-$2,000.
Action: Review your policies annually and ensure coverage is adequate.

Vehicle and Travel Expenses

If you use your car for business (e.g., home visits), you can deduct the standard mileage rate (67 cents per mile in 2026) or actual expenses. Travel for conferences or business meetings is also deductible, but not commuting.

Example: You drive 5,000 business miles, deduct $3,350.
Action: Keep a mileage log with dates, destinations, and purposes.

Retirement Contributions

Contributions to SEP IRAs, SIMPLE IRAs, or solo 401(k)s are deductible. For 2026, the SEP IRA contribution limit is 25% of compensation, up to $66,000. Solo 401(k) employee deferral limit is $23,000, plus catch-up if over 50.

Action: Set up a retirement plan before year-end to reduce taxable income.

Miscellaneous Deductions

Other write-offs include office supplies, postage, bank fees, interest on business loans, and business meals (50% deductible). Also, if you hire your spouse or children, their wages are deductible, but they must perform real work.

Action: Keep a separate business credit card for all small purchases.

FAQ

Can I deduct the cost of starting a PT practice if I haven’t opened yet?

Yes, startup costs incurred before opening are deductible up to $5,000 in your first tax year, with the remainder amortized. You must file Form 4562.

What is the best way to track write-offs?

Use accounting software like QuickBooks or Xero, and keep digital copies of all receipts. Categorize expenses monthly to avoid missing deductions.

Are home office deductions worth it for a PT practice?

If you have a dedicated space used exclusively for business, yes. The simplified method gives $5 per square foot up to 300 sq ft, which is $1,500. Actual expenses may yield more if your home costs are high.

How long should I keep tax records?

Keep records for at least 3 years from the filing date, but for assets like equipment, keep until the depreciation period ends plus 3 years.

The bottom line

New PT practices have many tax write-offs available, but they require documentation. Start by tracking every expense from day one, categorize them monthly, and consult a CPA who understands healthcare practices. Deductions like startup costs, equipment, and software can significantly lower your taxable income in your first year. Plan ahead, and you’ll keep more of what you earn.