The Complete List of Tax Deductions for Health and Wellness Professionals

The importance of record keeping

‍Even if you’re on top of tracking all your expenses, you need to keep receipts on hand so you can claim deductions. In case of an audit, the IRS will demand receipts for every expense you’ve claimed. Generally, we recommend keeping all receipts for business expenses of $75 or more for at least three years.

If you can’t prove your deductions are legitimate, you’ll owe the IRS the full cost of the deduction. You may also have to pay fines.

The best move? Review all your expenses, identify which ones you can deduct from your taxes, make sure you’re tracking them, and save your receipts.

The standard deduction vs. itemized deductions.

The standard deduction vs. itemized deductions vs. deductible business expenses

There are two types of deductions that reduce your tax burden when you run your own business: personal deductions and business deductions.

This article deals with business deductions, but it’s important to understand how the two types differ.

Personal deductions

Personal deductions have to do with you, personally—not your business—and you report them on Schedule A (Form 1040).

You can claim your personal deductions either by itemizing them or claiming the standard deduction.

Itemized deductions include expenses like mortgage interest, real estate taxes, property taxes, as well as medical and dental fees.

Rather than itemizing these deductions, you may instead claim the standard deduction. It’s a flat rate that varies from year to year.

Business deductions

Business deductions are related to the operation of your business, not your activities as an individual.

You report business deductions on:

• Schedule C (Form 1040) if you’re a sole proprietor or an LLC filing as a pass-through entity
• Form 1120 if your business is a C corporation
• Form 1120-S if your business is an S corporation or an LLC filing as an S corporation
• Form 1065 if your business is a partnership or an LLC filing as a partnership (with each partner filing a Form 1040 separately)

Can you claim both the standard deduction and business deductions?

In a word: Yes. But many new business owners get confused here.

Since you can either claim the standard deduction or itemized deductions, they believe that they also have to choose between the standard deduction and business deductions.

However, the standard deduction applies to your personal taxes, while business deductions apply to your business taxes.

If you’re a sole proprietor or an LLC filing as a sole proprietorship, you report business taxes on Schedule C (Form 1040), or else your tax return for your corporation or partnership. Your standard deduction or itemized deductions go on Schedule A (Form 1040).

No matter which personal deductions you claim, or how your business is structured, you can file tax deductions for your business.

Advertising and marketing

The cost of marketing or advertising your health and wellness business is tax-deductible.

Some examples of eligible expenses:

• Mail and print ads
• Online advertising
• Website design and maintenance
• Professional headshots
• Logo design
• SEO tools or consultation
• Business cards
• Brochures
• Sponsorships
• Promotional items like pens, notepads, or water bottles
• Monthly fees to have your business listed in online directories

‍A few exceptions to watch out for:

• ‍Signage: Any sign you put to use for one year or longer must be deducted as a depreciable asset. More on that below. Temporary signs used for less than one year may be written off as marketing and advertising expenses.
• Vehicle ads: You can deduct the cost of putting promotional materials for your practice on your vehicle, but you can’t deduct other vehicle-related expenses (e.g. mileage) as an advertising expense.
• Recruitment: If you pay to post job positions, the cost is tax deductible, but not as an advertising expense.

Accounting and bookkeeping

Accounting and bookkeeping are essential for running your health and wellness business. They’re also 100% tax-deductible.

That includes the cost of:

• An accountant (whether on retainer or only for tax prep)
• A bookkeeper
• A tax advisor
• Accounting software
• Financial management tools like Heard

Business meals

So long as a business meal qualifies as a business expense, 50% of its cost is deductible from your taxes.

In order to qualify:

• You must purchase the meal from a qualifying establishment. Typically, this means a restaurant with either takeout or sit-down service. Ingredients for meal prep, or food purchased for anything other than immediate consumption, do not qualify.
• You must either purchase the meal during a business trip or share it with a business associate. More on business travel deductions below.
• The meal must not be “lavish or extravagant under the circumstances.” Ordering a soup and sandwich at lunch would qualify. A mid-day feast of lobster and filet mignon would likely not.

Unless you frequently travel for business, most meals you deduct will be ones you purchase for yourself and one or more business associates.

In the words of the IRS, a business associate is “a person with whom the taxpayer could reasonably expect to engage or deal in the active conduct of the taxpayer's trade or business such as the taxpayer's customer, client, supplier, employee, agent, partner, or professional adviser, whether established or prospective.”

If you plan to deduct a business meal, make sure to keep the following information for your records:

• The total cost
• The date of the meal
• The location
• The business purpose of the meal
• Who was present at the meal

‍In the event of an IRS audit, you will need this information in order to justify your tax deduction.

Business travel

You may find yourself travelling for business. That could include travelling in order to:

• Treat a client at their home or care facility
• Attend to a conference
• Give a talk, teach a class, or facilitate a workshop

In all of the cases above, you are able to deduct some—if not most—of the cost of travel.

And, depending on how you do it, you may be able to squeeze in a little vacation time along the way.

Business trip versus vacation: What’s the difference? In order to qualify for a deduction, your trip:

1. Must take you outside your tax home. Your tax home is the place your business is based.
2. Must take you away from your tax home for longer than one work day.
3. Mostly be spent doing business. For example, if you are away for four days, and you spend three of those days at a conference, and the fourth day sightseeing, it counts as a business trip. Reverse that—spend three days sightseeing, and one day at a conference—and it’s not a business trip.
4. Be “ordinary and necessary.” For example, If you have the choice between flying First Class and Economy, choosing First Class could put you outside the bounds of “ordinary and necessary.” So would opting for a spa retreat rather than a hotel.
5. Be planned in advance. The IRS doesn’t want business owners tacking on professional activities to recreational trips in order to turn them into business expenses. Prepare a written itinerary and travel plan, and book transportation and lodging well in advance—it will help to prove the trip was primarily business related.

‍You can deduct the cost of travel to your location, and the cost of lodging once you get there. You can also deduct:

• Baggage fees
• Rental car costs
• Laundry and dry cleaning
• 50% of business meals (i.e. with business associates) from qualifying establishments
• 50% of meals eaten, while traveling, at qualifying establishments

Bank fees

Two types of bank fees count as deductible business expenses:

• Overdraft fees
• Maintenance fees

Overdraft fees are only incurred when you overdraw an account. Maintenance fees are charged monthly. You can record them in your books as a regular expense and deduct them from your taxes.

Vehicle use

If you frequently drive as part of your business activities, you can deduct some of the related expenses.

Keep in mind that “business activities” do not include your regular commute to work. You must be travelling to a location besides your business in order to qualify.

Examples that would qualify include travelling to treat a client at their home or care facility, or travelling to deliver a talk or workshop.

There are two ways you can calculate your tax write-off: by mileage rate and by actual expenses.

Mileage rate

To deduct your vehicle expenses using the mileage rate method, first take the total number of miles you traveled for work. Then multiply it by the IRS mileage rate for the tax year.

The mileage rate was 67 cents per mile for the 2024 tax year. For 2025, it's 70 cents per mile.

If you use the mileage rate method, you can’t include any other expenses such as oil changes or routine maintenance and repairs. You can, however, deduct the cost of parking fees or tolls.

If this is your first year owning your vehicle, you must calculate your deduction using the mileage rate. For every year after, you have a choice between the mileage rate and actual expenses.

Actual expenses

To write off actual expenses, first calculate how much of your time on the road is devoted to business. Then multiply it by all your vehicle expenses for the year.

‍For instance, if you drove 10,000 miles last year, and 1,000 of the miles you travelled were spent travelling to clients’ homes or care facilities, you could deduct 10% of your total vehicle expenses.

‍Eligible vehicle expenses include:

• Fuel
• Lease payments
• Oil and other fluids
• Parking fees
• Garage or parking space rental
• Repairs
• Tire replacement
• Licenses and registration
• Insurance
• Depreciation on the vehicle

Whichever method you use to deduct vehicle expenses, be sure to keep detailed records.

Membership fees

The cost of membership in a professional organization is tax-deductible.

Examples include the American Physical Therapy Association, the American Esthetician Association, and the American Psychological Association.

‍You can also deduct the cost of membership in your local chamber of commerce, as well as membership in any public or civic organizations related to your profession.

Continuing education

You can deduct the cost of courses, workshops, and certification programs related to your health and wellness profession, but it must meet at least one of two criteria:

1. ‍It helps you improve upon or maintain the skills you need to do your job
2. It’s required in order for you to maintain a license that lets you practice your profession

‍You can’t deduct the cost of any education necessary to meet the minimum requirements of your profession.

For instance, the training you do so you can become a certified massage therapist in your state is not tax deductible. Any additional training you do after you’re certified is most likely tax deductible.

You also can’t deduct the cost of education you undertake in order to change professions.

For instance, if you’re an esthetician but you decide to start training as an acupuncturist, you can’t deduct the cost of acupuncturist training from the taxes for your existing business.

Some additional education costs you can deduct:

• ‍Books, journals, and trade magazines related to your field
• Learning supplies (stationery, note-taking apps, etc.)
• Supervision (in the case of mental health professionals)

Office or clinic rent (including home-based businesses)

If you work outside your home in a clinic or office space that you rent, the cost is tax-deductible. The cost of utilities (heat, water, electricity, internet, phone) is also deductible.

‍If you work from home—whether with clients on site or remotely (in the case of professions like mental health and coaching)—you can deduct a portion of your mortgage payments or rent, as well as your utilities. This is called the business use of your home deduction.

In order to qualify for this deduction, you must use your home-based work space:

• ‍Exclusively, meaning you have a separate area where you work. This may be a separate room in your home, or a portion of a room. Your primary use of the area should be for work.
• Regularly, meaning you keep recurring work hours in the area. If you use your desk on random occasions to catch up on progress notes for your therapy practice, the area won’t qualify as a home office. If you sit at it to write progress notes every day of the week, it will.
• With precedence, meaning it’s your number one place of business. For instance, you don’t spend 90% of your working hours at your clinic, then use your spare room to do paperwork.

‍If you qualify, you can deduct a percentage of your home’s rent or mortgage payments, plus the cost of utilities (including routine repair and maintenance), that corresponds to the percentage of your home you use for your business.

‍There are two ways to go about this: With the business use of your home regular method or with the simplified method.

Before choosing one, do the math. Depending on your circumstances, one method may result in a bigger tax write-off than the other.‍

‍The business use of your home regular method‍

To calculate your home-based business deduction using the regular method, first determine the square footage of your workspace. For the sake of an example, let’s say your workspace is 100 square feet.

‍Next, calculate the square footage of your entire home. Let’s say your home is 2,000 square feet.

‍‍Divide your workspace square footage by your home’s square footage.

‍100 / 2,000 = 0.05 or 5%

‍The resulting percentage is the amount you can claim on your tax return as a business use of your home. Following this example, you can deduct 5% of your combined mortgage payments/rent and utilities for the year.

The business use of your home simplified method‍

Rather than calculating what percentage of your home you use for work, the simplified method applies a flat rate per square foot.

‍Using the regular method, you can deduct $5 per year for each square foot of your home you use for business, up to a maximum of 300 feet.

Business equipment and supplies

The cost of any item you use to run your business or treat clients is a tax deductible expense.

That includes general purpose and office equipment like:

• Printers, photocopiers, and phones
• Printer or photocopier ink or toner
• Printer paper
• Furniture
• Office artwork
• Storage bins

It also includes items specific to your profession. Some examples:

• Massage tables
• Chiropractic tables
• Physical therapy tools
• Massage oil
• Heat/cold packs
• Cosmetic laser units
• Acupuncture needles
• Psychotherapy tools (flashcards, books, weighted blankets)
• Massage guns
• Imaging devices (thermal, digital x-ray)

Payment processor fees

If you use payment processors to collect payments from clients, those fees are 100% tax-deductible.

‍This applies both to the flat monthly fees you pay to use these services, and to any percentages of your revenue they collect.

‍Check the app for the service you use. Most offer yearly reports telling you how much you paid in fees each year.

Booking and billing software

The subscription costs of software you use for booking client appointments is 100% tax deductible. The same goes for any software you use to invoice clients or provide them with receipts.

‍Most billing software collect a percentage of your revenue when clients pay by credit card. This fee is also tax-deductible.

Electronic health record (EHR) tools

The cost of an EHR or practice management tool like Jane is 100% tax deductible as a business expense.

Professional liability insurance

Professional liability insurance protects your business from claims of malpractice or negligence in the rendering of professional services.

‍

So long as it’s considered an ordinary and necessary business expense for your profession, professional liability insurance is generally considered tax-deductible. If you’re unsure whether professional liability insurance is ordinary and necessary, consult with your licensing board or professional organization.

General liability insurance

Whereas professional liability insurance protects you from malpractice claims, general liability insurance protects your business from property damage or claims of bodily harm.

‍As with professional liability insurance, the cost of general liability insurance premiums are tax deductible. Make sure to document all payments made towards your policy, as this information will be essential when filing your taxes at the start of the year.

Student loan interest

The principal of your student loans is not deductible.

Now for the good news: You may be able to write off the interest.

‍If you pay over $600 in interest during the course of the year, you can claim the expense on your tax return.

Some caveats:

• The maximum amount you can write off per year is $2,500

• You can only claim this deduction if your adjusted gross income (AGI) is $85,000 or less

Technically, this is not a business expense. It’s an itemized personal deduction, meaning you claim it on your personal tax return. But it can help to take the sting out of monthly student loan payments.

The Qualified Business Income (QBI) deduction

Taking advantage of the QBI deduction, you can write off up to 20% of your income. Your health and wellness business likely qualifies for the full amount of this deduction if:

• It’s a pass-through entity (a sole proprietorship, an S corporation, a partnership, or an LLC filing as either of those business structures)

• Its taxable income for the year is $182,100 or less

If you earn in excess of $182,100, you may qualify for a partial deduction.

There are a few more factors to take into account before claiming the QBI deduction. For a deeper dive, check out this article on the QBI deduction for therapists — it applies not only to therapists but to most health and wellness businesses.

A note on depreciating business assets

Some equipment or tools you purchase for your health and wellness business may qualify as depreciable assets.

A depreciable asset is any fixed, tangible business asset with a useful life of 12 months or more:

• “Fixed” means it’s not easily converted to cash, and you put it to long-term use as part of your business activities.
• “Tangible” means it has a physical presence (e.g. a massage table for your massage therapy business is tangible, but your website is not).
• “Useful life” is the amount of time an asset can be put to use before it wears out or becomes obsolete.

When you depreciate an asset, you deduct the total cost of purchasing it over multiple years according to its amortization period.

An amortization period is the number of years over which you depreciate an asset. Different types of assets have different amortization periods. An item with a longer useful life typically has a longer amortization period.

Businesses usually only depreciate large assets, not small ones. For instance, it may make sense to depreciate a $2,000 work computer, but it does not make sense to depreciate a five dollar USB stick.

One of the benefits of depreciating an asset on your tax returns is that you can claim the maximum deduction possible. That’s because the maximum amount you can deduct from your taxes in a given year is limited by the amount you owe.

Example: You buy a cosmetic laser unit for your esthetician business. It costs $100,000. After deducting all other expenses, your taxable income for that year is $80,000. If you were to then deduct an additional $100,000 for the cost of the laser machine, you would save yourself the cost of income taxes on your income of $80,000. But that would leave an additional $20,000 in unclaimed tax savings.

On the other hand, if you depreciate the cost of the machine over ten years—for instance, claiming $10,000 in deductions each year—you take full advantage of the tax savings.

This is a simplified example. There are multiple methods for depreciating assets—it can get pretty complex. Before purchasing any major assets for your business, consult with an accountant to determine a depreciation strategy that works for you.

Key takeaways

• Tax deductions take the form of either personal expenses (certain costs related to your person) or business expenses (costs related to your business).
• Make sure to keep receipts for every business expense you deduct on your taxes so you can back up your claims in the event of an IRS audit.
• Many health and wellness businesses qualify for the QBI deduction, and it’s worth your time to find out whether you can claim it.
• If you purchase a large fixed asset, in order to reap the most tax benefits, you should depreciate the expense.
• Consult with a qualified accountant before claiming any business expenses you’re unfamiliar with, or to get help depreciating large assets.

Want to join us for a deeper dive? 👀

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