FAQs

• How do I know if an S Corp makes sense for my therapy practice?

  If you're consistently earning $80K or more annually in private practice, an S Corp likely saves you money. As a sole proprietor, LLC, or PLLC, you pay 15.3% in self-employment tax on all your net income. With an S Corp, only your salary gets hit with that tax — distributions don't. On $150K in session income, that could mean $10,000+ back in your pocket. And because therapy is classified as a Specified Service Trade or Business, the QBI deduction phases out at higher income levels, making S Corp savings even more valuable as your practice grows. Lettuce's free savings calculator can show you an estimate based on your actual numbers.

• What does Lettuce handle for therapists in private practice?

  Pretty much everything that isn't your clinical work. Lettuce sets up and manages your S Corp, runs payroll, handles bookkeeping, files your business taxes (1120-S and K-1), automates quarterly tax payments, and gives you access to group-rate healthcare and retirement plans. One system replacing the patchwork of a CPA, payroll provider, bookkeeping tool, and tax preparer.

• I get paid through a mix of private pay, insurance, and platforms like Headway or BetterHelp. Can Lettuce handle all of it?

  Yes. Whether it's private pay session fees, insurance reimbursements, or 1099 contractor payments from therapy platforms, it all flows into your Lettuce business banking account. From there, the system automatically distributes income into reserves to pay you a salary and meet your expected tax obligations. Whatever is left over can be taken as profit or used to pay your business expenses.

• How do salary and distributions work with an S Corp?

  Your income splits into two buckets: a reasonable salary (subject to payroll taxes) and distributions (not subject to self-employment tax). Lettuce automates this. As payments come in, the system distributes the right amounts based on your income and set salary. You don't calculate payroll or figure out withholding because Lettuce handles the processing and compliance. Take distributions from the non-salary and tax accounts knowing your obligations are handled and benefit from reduced self-employment taxes compared to filing as a sole-proprietor.

• Why do I need to run payroll for myself?

  It's how the S Corp tax savings work. The IRS requires S Corp owners to pay themselves a reasonable salary through payroll. That's the part that gets taxed at the full rate. Everything above that salary comes to you as a distribution, which avoids the 15.3% self-employment tax. Lettuce automates the entire payroll process for you—set it and forget it.

• I'm earning around $90K. Is an S Corp really worth it after Lettuce fees?

  It can be, and Lettuce's savings calculator will show you the specific math for your situation. Even at $90K, most therapists save enough in self-employment tax reduction to more than cover the cost of the subscription. And because Lettuce also replaces what you'd otherwise spend on a CPA, payroll service, and bookkeeping tool, the total cost comparison is often even more favorable. If the savings don't materialize, you're covered by the Lettuce Guarantee.

• How long does it take to get set up?

  Most therapists are fully set up within a few days to a couple of weeks. Lettuce handles S Corp formation (or S Corp election for your existing LLC/PLLC), EIN registration, and all the paperwork. Once your entity is established, your business banking, payroll, and bookkeeping are ready to go. Lettuce's thorough onboarding walks you through each step.

• What if I already have an LLC or PLLC?

  That's a great starting point. Lettuce can help you elect S Corp status for your existing entity so you don’t need to dissolve anything or start over. The S Corp election (Form 2553) is filed with the IRS, and Lettuce manages the process and ongoing compliance from there.

• What expenses can I write off as a therapist in private practice?

  The IRS lets you deduct costs that are ordinary and necessary for your business. For most therapists, that includes office rent or coworking fees, EHR and practice management subscriptions (Simple Practice, TherapyNotes), malpractice insurance premiums, continuing education and CE credits, clinical supervision fees, therapy books and professional development, your phone and internet (business portion), and a home office if you see virtual clients from a dedicated space. Lettuce helps you categorize these expenses properly so nothing gets missed at tax time.

• My spouse has W-2 income. Does that complicate things?

  It's actually one of the most common situations we see. When you're married filing jointly and one spouse has W-2 income, the tax math gets more layered, but Lettuce handles it. Your S Corp salary, distributions, and your spouse's W-2 income are all factored into your tax planning so nothing falls through the cracks.

• What's the QBI deduction and how does it affect therapists?

  The Qualified Business Income (QBI) deduction lets eligible self-employed people deduct up to 20% of their net business income. But because therapy is classified as a Specified Service Trade or Business, that deduction starts to phase out once your taxable income exceeds roughly $202,000 for single filers or $404,000 for married filing jointly (2026 thresholds, adjusted annually for inflation). If your practice income is approaching or past those thresholds, an S Corp can become even more valuable because the tax savings shift from QBI eligibility to self-employment tax reduction through salary and distribution planning. Lettuce's savings calculator factors this in.

• How does Lettuce healthcare compare to ACA marketplace plans?

  As a solo practitioner, marketplace options typically mean high premiums, especially if your practice income disqualifies you from subsidies. Lettuce gives you access to group-rate healthcare — the same type of coverage employees at larger companies get, with generally lower rates and more comprehensive plan options (HMO, PPO, etc.). For therapists who left a salaried agency or hospital position to go into private practice, the difference can be significant.

• Can I still use my current accountant for my personal taxes?

  Absolutely. Lettuce handles your business taxes (1120-S and K-1) and provides the documents your personal accountant needs to file your individual return. Many members keep their existing CPA for personal taxes while Lettuce handles the business side. You also have the option to use Lettuce's tax prep for your personal return if you'd rather keep it all in one place.

• What if my income fluctuates with cancellations and seasonal dips?

   Lettuce is built for this because variable income is the norm in private practice. Whether you're ramping up a new caseload, navigating a slow August, or dealing with a week of cancellations, the system adjusts. As each payment arrives, Lettuce sets aside the right amount for taxes, runs your payroll, and shows you what's yours to keep.

• How can Lettuce help me plan for retirement?

  To make it easy for Lettuce S Corp owners to invest in their retirement, we've partnered with Carry, who lets you easily launch a Solo 401(k) in minutes. A Solo 401(k) is a retirement account for people who are self-employed or are small business owners, and it allows you to create a supercharged retirement plan. You can learn more about it here.