The Annual New Speech Therapy Practice Review Checklist

Running a speech therapy practice means wearing many hats, and taxes are one hat you can’t ignore. For new practice owners, the annual review can feel overwhelming, but it doesn’t have to be. This checklist walks you through the key tax and financial tasks you need to complete each year, with concrete steps and realistic figures for 2026. By following this guide, you’ll stay compliant, maximize deductions, and avoid surprises at tax time.

1. Gather and Organize Your Financial Documents

Before you can do anything else, you need a complete picture of your income and expenses. Set aside a few hours to collect:

• All bank and credit card statements for the practice (business and personal, if mixed)
• Receipts for business expenses: rent, utilities, supplies, equipment, software, marketing, continuing education, travel, meals, and entertainment (50% deductible)
• Invoices and payment records from clients, including insurance reimbursements
• Payroll records if you have employees, including W-2s and 1099s issued
• Records of any contractor payments (1099-NEC forms)
• Previous year’s tax return, if applicable

Action step: Create a digital folder (e.g., Google Drive, Dropbox) and scan or photograph all paper receipts. Use a naming convention like 2026-01-rent.pdf to stay organized.

2. Reconcile Your Books

Your accounting software (QuickBooks, Xero, FreshBooks) should match your bank statements. If you’re not using software, now is the time to start. Reconciling ensures your profit and loss statement is accurate, which is the foundation for your tax return.

• Compare every transaction in your software to your bank and credit card statements
• Flag and correct any discrepancies (e.g., missing deposits, duplicate charges)
• Categorize expenses correctly: rent, supplies, professional fees, etc.

Action step: If you’re behind, hire a bookkeeper for a one-time cleanup. Rates range from $50 to $150 per hour, depending on your area and complexity.

3. Review Your Business Structure and Tax Obligations

Your business structure (sole proprietorship, LLC, S-corp) determines how you pay taxes. As a new practice, you may have started as a sole proprietor, but it’s worth reviewing annually.

• Sole proprietorship: Report income on Schedule C. You’ll pay self-employment tax (15.3% in 2026) on net earnings.
• LLC (single-member): Treated as a sole proprietorship for tax purposes unless you elect S-corp status.
• S-corp: You pay yourself a reasonable salary (subject to payroll taxes) and take additional profits as distributions, which are not subject to self-employment tax. This can save money if your net income exceeds $40,000 to $50,000.

Action step: If your net income is consistently above $50,000, consult a CPA about whether S-corp election makes sense. The cost of payroll processing and additional tax prep is typically $1,000 to $2,000 per year, but the tax savings can be larger.

4. Calculate and Pay Estimated Taxes

As a practice owner, you don’t have an employer withholding taxes. You must pay estimated taxes quarterly. For 2026, the due dates are:

• April 15, 2026 (for Q1)
• June 15, 2026 (for Q2)
• September 15, 2026 (for Q3)
• January 15, 2027 (for Q4)

How to estimate: Use your prior year’s tax liability or project current year income. A common method is to pay 100% of last year’s tax (or 110% if your adjusted gross income was over $150,000) to avoid penalties. If your income is growing, you may need to pay more.

Action step: If you haven’t been paying estimated taxes, start now. Use IRS Form 1040-ES or pay online via the Electronic Federal Tax Payment System (EFTPS). Penalties for underpayment are around 5% of the underpaid amount, so it’s better to overestimate slightly.

5. Maximize Deductions Specific to Speech Therapy Practices

Many new owners miss deductions they’re entitled to. Here’s a list of common ones for speech therapy practices:

• Home office deduction: If you have a dedicated space used exclusively for business, you can deduct $5 per square foot (up to 300 sq ft) or actual expenses. For a 200 sq ft office, that’s $1,000.
• Equipment and software: Computers, tablets, therapy apps, and assessment tools are deductible. Under Section 179, you can deduct the full cost in the year of purchase (up to $1,160,000 for 2026).
• Continuing education: Courses, conferences, and materials directly related to your practice are deductible, including travel and lodging (subject to limits).
• Professional liability insurance: Premiums are fully deductible.
• Marketing and website: Costs for your website, SEO, ads, and printed materials are deductible.
• Retirement contributions: SEP IRA or solo 401(k) contributions can reduce taxable income. For 2026, the SEP IRA limit is $69,000 (or 25% of compensation, whichever is less).

Action step: Review your expense categories and add any you’ve missed. Keep receipts for all deductions.

6. Review Your Retirement and Health Insurance Options

Retirement plans and health insurance can be significant tax savers.

• SEP IRA: Easy to set up, contributions are tax-deductible, and you can contribute up to 25% of net earnings (max $69,000 in 2026).
• Solo 401(k): Allows higher contributions (up to $69,000 plus catch-up if over 50) and can be set up with a robo-advisor or brokerage.
• Health insurance premiums: If you’re self-employed, you can deduct premiums for yourself, your spouse, and dependents, even if you don’t itemize.

Action step: If you haven’t set up a retirement plan, do it before December 31 to reduce this year’s taxes. For health insurance, keep records of premiums paid.

7. Prepare for State and Local Taxes

Don’t forget state and local obligations. These vary widely, but common ones include:

• State income tax: Most states have their own forms and deadlines, often aligned with federal.
• Sales tax: If you sell products (e.g., therapy materials, books), you may need to collect and remit sales tax. Check your state’s rules.
• Business license and fees: Some cities or counties require annual renewals, costing $50 to $500.

Action step: Check your state’s Department of Revenue website for specific requirements. Set calendar reminders for all deadlines.

8. Work with a Tax Professional

While you can do your own taxes, a professional can save you money and stress. For a new practice, expect to pay:

• CPA or Enrolled Agent: $300 to $800 for a simple Schedule C, $1,000 to $2,500 if you have an S-corp or employees.
• Bookkeeper (ongoing): $200 to $500 per month for monthly reconciliations and financial statements.

Action step: Interview at least two tax professionals before choosing. Ask about their experience with healthcare practices and their fee structure.

FAQ

Q: What if I miss an estimated tax payment? A: You’ll likely owe a penalty, but it’s not catastrophic. Pay as soon as possible and adjust future payments. The penalty is calculated on the underpaid amount and the time it was outstanding, typically around 5% annually.

Q: Can I deduct my home internet and phone? A: Yes, but only the business-use percentage. If you use your phone 50% for business, you can deduct 50% of the bill. For internet, if you have a home office, you can deduct a portion based on square footage or actual usage.

Q: Should I incorporate as an S-corp in my first year? A: Usually not. The costs of payroll and additional tax prep may outweigh savings unless your net income is consistently above $50,000. Reassess each year.

Q: What records should I keep and for how long? A: Keep all tax returns and supporting documents for at least 7 years. This includes receipts, bank statements, and contracts. Store them digitally to save space.

Related guides

• The Complete New Speech Therapy Practice Startup Checklist
• 7 Mistakes New Speech Therapy Practices Make in Their First Year
• 7 Questions to Ask Before Buying a New Speech Therapy Practice

The bottom line

An annual tax review isn’t just about filing a return; it’s about making smart decisions throughout the year. By following this checklist, you’ll stay organized, take advantage of deductions, and avoid penalties. Start with the first step today: gather your documents. Then, work through each section at a pace that fits your schedule. If you’re unsure about anything, hire a professional. The cost is worth the peace of mind and potential savings.