Starting your own ABA practice is an exciting step, but it comes with new responsibilities—especially around taxes and running a sustainable business.
Many aspiring BCBAs imagine life as an independent contractor or private practice owner. The flexibility is appealing: setting your own schedule, working directly with families, and keeping more of what you earn. But what often surprises first-time practice owners are the hidden challenges—like navigating tax laws, billing insurance, and handling non-billable work that eats into your time.
That’s why we created Taxes 101: A Guide for New ABA Practice Owners, a free webinar to help new business owners understand tax deductions, compliance, and how to build a financially sound practice.
Can Self-Employment Work for a BCBA?
It’s a question many ABA professionals ask: “What if I work part-time as an independent contractor, see just one client, and still make a great salary?”
On paper, it might look like this:
20 client hours per week
Billing $120/hour to insurance
Working 48 weeks per year
That adds up to roughly $115,000 annually. Sounds great, right?
In reality, experienced practice owners point out some important caveats:
Insurance challenges. Most insurers won’t approve 20 hours/week of direct BCBA services. They often require RBTs to deliver therapy, with BCBAs providing oversight. If you do provide direct care, you may only get reimbursed at the RBT rate, not the BCBA rate you expect.
Non-billable hours. Even if you’re in session 20 hours a week, you’ll likely spend additional time on parent meetings, treatment planning, creating materials, and insurance paperwork—time you can’t bill for.
Billing and compliance. As an independent provider, you’ll handle all credentialing, pre-authorizations, and claims submission yourself. Without proper systems, this administrative work can quickly feel like another part-time job.
Taxes and expenses. Unlike a W-2 employee, you’ll be responsible for self-employment taxes, health insurance, and retirement savings. Many BCBAs are surprised to find that after taxes and overhead, their take-home pay is closer to half of their gross revenue.
That doesn’t mean private practice isn’t possible—it absolutely is. But it requires careful planning, strong administrative systems, and an understanding of your financial obligations.
🎥 Want the full breakdown? Watch the webinar: Taxes 101 for New ABA Practice Owners.
Common Tax Deductions ABA Practice Owners Should Know
Whether you’re seeing one client or running a multi-staff practice, here are key deductions to track:
1. Client Materials and Therapy Supplies
Flashcards, reinforcers, sensory toys, and even craft supplies can qualify as business expenses if you’re operating as an independent contractor or business owner.
As CPA Ajish Abraham explains:
“If it’s necessary to deliver services or support your business, it’s likely deductible. The key is to keep clear records.”
Note: W-2 employees can’t claim these deductions under current tax law.
2. Home Office Deduction
If you work from home, you may be able to deduct a portion of your rent/mortgage and utilities.
There are two methods:
Simplified method: $5 per square foot (up to 300 sq ft)
Actual expense method: Calculate the percentage of your home dedicated to business use.
The space must be used regularly and exclusively for your practice to qualify.
3. Mileage and Vehicle Expenses
Driving to client homes or schools? You can deduct mileage at the IRS standard rate (currently 67 cents/mile). Alternatively, you can calculate actual vehicle expenses (gas, insurance, repairs) and deduct the business-use percentage.
Abraham advises sticking with the standard mileage method for simplicity unless your car is used exclusively for business.
The Hidden Costs of “Part-Time” Private Practice
Many BCBAs are drawn to private practice for flexibility, but experienced practitioners caution that it’s rarely as part-time as it appears.
One former independent contractor shared:
“I thought I’d be working 20 hours a week, but I didn’t realize how much time would go into billing, insurance calls, program development, and non-billable parent communication. It quickly became more than full-time.”
Others emphasize the importance of support systems:
“If you’re not familiar with insurance billing, find a mentor or outsource it. Otherwise, you risk delays in payment or rejected claims.”
This is where platforms like Alpaca Health come in—taking care of all the non-clinical work that can overwhelm new practice owners.
From navigating the insurance maze to managing billing, admin tasks, and even guaranteeing on-time payouts, Alpaca acts as your behind-the-scenes partner so you can focus on what you do best: providing life-changing care to your clients.
Should You Set Aside 30% for Taxes?
A good rule of thumb for self-employed BCBAs is to save 30% of net income for federal and state taxes.
“This isn’t a hard-and-fast rule,” says Abraham, “but it helps avoid surprises. And don’t forget quarterly estimated tax payments—they’re mandatory for business owners.”
Smart Tax Tips for New ABA Business Owners
Separate your finances. Open a dedicated business account to make tracking income and expenses easier.
Track everything. From gas receipts to therapy supplies, every small expense adds up.
Talk to a professional. A CPA can guide you on deductions, compliance, and optimizing your business structure.
Consider administrative support. Managing billing and insurance alone can eat into your clinical time. Outsourcing can protect your cash flow and sanity.
The Bottom Line: Yes, It Can Work—With the Right Systems
Starting your own ABA practice can be rewarding and financially viable—but only if you plan carefully for taxes, overhead, and the administrative demands of running a business.
By taking advantage of deductions, keeping clean records, and working with a professional like Ajish Abraham, you can build a practice that’s both sustainable and profitable.
About Alpaca Health
At Alpaca Health, we help BCBAs start, run, and grow thriving ABA practices. From handling insurance billing and admin work to providing modern tools that reduce documentation burdens, we take the non-clinical work off your plate so you can focus on care.
Ready to launch or scale your ABA practice?
Book a free demo with our team to see how Alpaca can simplify your operations, guarantee faster payouts, and set you up for long-term success.
