Bookkeeping and Accounting for Sports Psychologists

The tax considerations for a sports psychology practice can be quite specific and depend on various factors such as the size of your practice, location, and whether you offer any allied health services. Here are a few general considerations:

• Business structure: Your tax obligations can vary significantly depending on whether you are a sole proprietor, partnership or a corporation.
• Income tax: You must factor in both federal and state income taxes for your sports psychology practice.
• Sales tax: Although psychological services are generally exempt from sales tax, any merchandise or products you sell may be subject to it.
• Deductible expenses: Be aware of the business expenses you can deduct against your income, which could include professional fees, travel expenses, office rent, equipment costs, etc.
• Employment taxes: If you have employees, you need to account for both employer taxes and withholding their portion of taxes as well.

Given the complexities, we highly recommend working with a professional bookkeeper or accountant who understands the nuances of tax obligations for a sports psychology practice. They can help you maximize deductions, minimize your tax bill, and ensure you remain compliant with all tax laws.

The primary difference in bookkeeping for sports psychologists compared to general medical practitioners lies in the specific costs, income sources, and write-offs associated with each profession.

Sports psychologists may need to account for travel expenses and equipment related to sports training. They may also need to factor in the cost of continuing education in the realm of sports psychology, which may be different from the continuing education required in general practice medicine.

On the other hand, general medical practitioners often have costs associated with running a medical office, purchasing medical supplies, or paying out to other medical staff. They also typically deal with a variety of insurance companies and healthcare providers, which can complicate their bookkeeping process.

Despite these differences, both professions require well-organized and accurate bookkeeping. This is crucial for managing financial health, tracking profit and loss, and staying compliant with tax laws.

The most common accounting errors a sports psychologist should avoid include:

• Incorrect expense classification: This involves recording an expense in the wrong category, which can lead to misleading financial statements and potential tax issues.
• Not separating personal and business expenses: Using the same account for personal and business transactions can cause financial complications. It's crucial to maintain separate accounts to simplify bookkeeping and tax prep.
• Not tracking reimburseable expenses: Sports psychologists often incur expenses that are reimbursed by their clients. Not tracking these expenses diligently can lead to financial losses.
• Data entry errors: Simple data entry errors can compromise the accuracy of your bookkeeping and cause serious issues down the line. It's always a good idea to double-check your entries or hire a professional bookkeeper.
• Not recording transactions in real time: Failing to record transactions as they occur can lead to an oversight and skew the financial picture of your business.
• Neglecting sales tax: It's important to accurately track, record, and pay your sales tax liabilities to avoid penalties and legal issues.

Nope! All bookkeeping is completed in-house.

Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.

We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.