Are session write offs tax deductible

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Matthew Flynn, Psy.D.

• September 09, 2018 01:20

Obviously when an insurance pays my plus the client copay there is generally a write off since my rate is higher. Out of curiosity is this amount a tax write off or is it simply just a write off that disappears and is essentially forgotten? I’m assuming client not paying a bill is a bad debt tax write off however - thoughts thx for your help

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  Gillian

  • September 10, 2018 18:51

  Hi, Matthew! This is a great question - and one that might be best answered by an accountant. I'm not an accountant, but I can tell you that in most cases, session write-offs are not tax deductible. For tax purposes, you pay tax on income received. If in your book-keeping you report your full fee, you can "write off" the unpaid amount, therefore deducting it from the full fee for tax purposes and paying tax only on the final amount received. Otherwise, you'll just report the final fee received, and pay taxes on that. 

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  Katherine Heeg

  • October 07, 2018 22:54

  According to my accountant, you can't declare income you never received, so no.  There's also a tax lawyer and accountant in the group.  But check with your own tax and legal advisors.

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  Joel Davison

  • October 30, 2018 20:00

  I was told that because you agreed to the amount of payment between you and the insurance company, you cannot write this off.  

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  Wendy Holder

  • May 10, 2021 13:20

  What about writing off fees that are never collected from self pay clients or that never paid their copay?  

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  Group Schedule

  • May 17, 2021 13:42

  YES WENDY, I HAVE THAT QUESTION TOO. HOW DO WE DEFRENTIATE BETWEEN THE TWO WRITE OFFS?

   

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  Nicole Walsh

  • January 29, 2023 23:42

  I am confused how we just do not get paid for our full fee.  Like the money is just forget about...

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