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How do therapists in private practice track quarterly estimated taxes?

Each time practice income comes in, set aside a share of it for taxes, using the rate your CPA gives you. Track it by IRS quarter: what you meant to set aside, what you actually moved, and what you paid. If the actual number runs behind the plan, you see it weeks before the due date instead of the day it's due.

How to set it up

1. Get a set-aside rate from your CPA. It depends on your income, your state and your other household income, so a number from a blog post won't fit you.
2. Log income when it's actually received, including insurance payments, copays and self-pay. Money billed but not yet paid doesn't count yet.
3. Group income by the IRS estimated tax periods, not by calendar quarters. The periods aren't equal: the second one is only two months long.
4. Track three numbers per period: suggested set-aside (income times your rate), what you actually moved to a tax account, and what you paid the IRS and your state.
5. Check the gap a few weeks before each due date, so you have time to move money if you're short.
6. Log business expenses as you go. They lower your profit, which is what the tax is actually based on, and they're much easier to sort in April if they're already grouped.

This is record-keeping guidance, not tax advice. Estimated tax rules, safe-harbor amounts and state requirements vary, so get your set-aside rate and payment plan from a CPA or tax professional, and check current IRS due dates on IRS.gov.

A template that does this

Our Private Practice Money Ledger ($24, Excel and Google Sheets) has a quarterly tax set-aside tab with the IRS periods and due dates. It shows suggested versus actual set-aside and flags a shortfall. Paid insurance claims count as income automatically, expenses are mapped to Schedule C lines, and a monthly P&L shows net profit. You set the rate.

Common follow-up questions

When are quarterly estimated taxes due?

For most people, federal estimated payments are due in mid-April, mid-June, mid-September and mid-January of the following year. Dates move when they fall on a weekend or holiday, so check IRS.gov for the current year.

Should I keep tax money in a separate account?

Many solo practitioners do, because it keeps tax money from looking like spending money. Whatever you choose, log each transfer so you can compare it with what you meant to set aside.

Do insurance payments that arrive late count in the quarter I saw the client?

For most solo practices on a cash basis, income counts when it's received, not when the session happened. Ask your CPA which method you use.

Related questions

• What should a therapy insurance claims tracker include?
• How do I track no-show and late-cancel fees in private practice?

Sparta Labs templates are spreadsheets for organizing your practice. They aren't an EHR, billing or clinical advice, or a HIPAA compliance solution.