If I am going to practice under sole proprietorship, do I have to register my practice as a business for tax purposes? Or can I still write off expenses without registering with the state as a business?

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Hi Jessica,

Probably you need to register with your municipality. But this varies depending on the rules of your city, and the revenues you make. For example, some places don’t have a business license tax, so they might not require you to register, other places have a business license tax, but not for businesses that make less that $10,000 per annum, etc. I wish I could give you an exact answer. The good news is a quick call to your city’s Office of Business Development will probably get you an answer in about 5 minutes (I’ve made that call plenty of times, when I’ve opened practices in different areas). One thing to keep in mind is, all things equal, if you’re getting ready to plant a practice, maybe choose an area that doesn’t have a business license tax. Where Thriveworks HQ is located, we pay a little over one-half a percent of our revenue in ‘business license tax’ to our city. Four miles down the road is another county with no such tax (so we’re looking to move).

Lastly, always check with your accountant and attorney (that’s my disclaimer/cop-out). Hope this helps!

Here is a video and an article that might help:
Do I need a business license? https://www.youtube.com/watch?v=nEVtbsr8RPY
Pay attention to local taxes: https://thriveworks.com/blog/pay-attention-to-taxes/


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Anthony Centore

Anthony Centore, PhD, is Founder and Chair at Thriveworks — a counseling practice focused on premium client care, with 340+ locations across the US. Anthony is a Private Practice Consultant for the American Counseling Association, columnist for Counseling Today magazine, and author of "How to Thrive in Counseling Private Practice". He is a multistate Licensed Professional Counselor (LPC) and has been quoted in national media sources including The Boston Globe, the Chicago Tribune, and CBS Sunday Morning.

Check out “Leaving Depression Behind: An Interactive, Choose Your Path Book” written by AJ Centore and Taylor Bennett."