As a professional counselor, you can deduct expenses that are "ordinary and necessary" in your line of work. The IRS defines ordinary expenses as ones that are standard and accepted in counseling. Necessary expenses help you do your job, even if you can get it done without them. Even if your expense is both ordinary and necessary, however, tax laws may not let you take it.
If you want your own practice, you need at least a graduate degree to get a license. None of your college costs are deductible: the IRS specifically rules out a write-off for education that qualifies you for a career. Once you've qualified, however, you can deduct the cost of any continuing education you have to acquire, or courses you take to improve your skills. Trade journals and books in your field are also a deductible expense.
To work as a professional mental health counselor, you need a state license. License fees are a valid write-off in any profession. If you have to pay a business license to local government to open a counseling office, that's deductible too. If you join a professional group such as the American Mental Health Counselors Association, your dues are deductible. Joining your local Chamber of Commerce or similar groups gets you another deduction, provided you can show it's an ordinary and necessary expense.
Your office expenses are 100 percent deductible. This include desks and other furniture, computers, phones, file cabinets and whatever else is ordinary and necessary equipment. The rent and utilities for your office are also a write-off. If you reserve space in your home for an office and meet clients there, or do all your administrative work there, you can write off a portion of your home expenses. If your office is 9 percent of the property, you deduct 9 percent of utilities, rent, and mortgage interest as a business expense.
If you're doing well enough to have a staff, their pay is a tax write-off as long as it's appropriate for the work they do. Putting your spouse on the payroll with a big paycheck and little work, for example, can draw unwanted IRS attention. The pay deduction applies to salary, wages, commission and bonuses. Along with what you actually pay your staff, you can write off your employer's share of their Social Security and Medicare payments.
