TCP

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I am curious about your decision-making regarding going into an agency such as university counseling centers, hospitals, VA, etc versus starting your own private practice. What helped you choose?

Agencies:

Pros: job security, stable income, benefits such as retirement contributions/health insurance/paid vacation/paid CEUs and professional development, resources, and a supportive team

Cons: not as high paying, 8 am-5 pm job, politics within the department or leadership

Private Practice:

Pros: greater potential to be a high-earner, more flexibility to make your schedule how you like, you are the boss of your practice

Cons: greater responsibility, more risk for income instability, need to market to make money, have to purchase softwares/compliant emails, etc., less support/consultation if a solo practice
 

mypointlesspov

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I'm only a postdoc, but it's been my goal to work at an agency FT (like four tens) and have a small private practice on the side. I'd want the agency for benefits etc. and the flexibility of a private practice plus $$ without income instability. A fair amount of my supervisors have done this and they seem to be really satisfied.
 

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I'm only a postdoc, but it's been my goal to work at an agency FT (like four tens) and have a small private practice on the side. I'd want the agency for benefits etc. and the flexibility of a private practice plus $$ without income instability. A fair amount of my supervisors have done this and they seem to be really satisfied.

This is me. Best of both worlds.
 
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Agencies:

Pros: job security, stable income, benefits such as retirement contributions/health insurance/paid vacation/paid CEUs and professional development, resources, and a supportive team

Cons: not as high paying, 8 am-5 pm job, politics within the department or leadership

An important thing here is for everyone to remember the W2 gig is more than just salary. You can calculate out the value of the medical, dental, vision, retirement match $, paid vacation, sick leave, workers comp, etc, etc... All this goes into the total package.


I agree with @BuckeyeLove about the best of both worlds for an ECP.

What was another thing I thought about was that it is easier to go from W2 work to private practice than the reverse if things don't work out.
 
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Therapist4Chnge

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Agency/working for someone else for the first few years can be good because you don't need to have everything figured out, though at some point the economics rarely make sense to stay. Private practice isn't for everyone, though I think it's easier to earn more than trying to climb up at an institution or similar. There can definitely be value in certain benefit packages, it just depends on what fits your situation.
 
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Sanman

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Often, I feel like these issues are determined by your life circumstances more than anything else.

Do you have a lot of debt?
Need access to health insurance?
Do you have a benefactor to support you and help fund startup costs?
 
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chicandtoughness

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I'm not a fan of pp so I'll be agency 'til the day I die.

I used to work as the practice manager of a group private practice and it completely turned me off to the administrative side of pp. I did AP/AR, fixed up the building, did credentialing, submitted claims, called the providers when the claims got erroneously denied (the worst part by far), hired new clinicians, did the marketing and PR, ran metrics, maintained our website, researched/purchased/moved all our paper files to an EMR... basically, if it wasn't therapy in the room, I did it. I worked full time throughout grad school and it helped me SO much once I started doing internship and post-graduate hours. I knew so much more about insurance, health records, etc. than my colleagues.

That said, I could not imagine doing what I did as a practice manager ON TOP OF providing psychotherapy to clients. That's like two jobs. And me being a hyper type A, there's no way I wouldn't go hard 110% on things like marketing. Nah, it's much more cost effective for me to have someone else deal with all the administrative stuff. I've been my own boss many times in the past (i.e. I ran a fairly successful design firm in a past career/life), and I'm tired of it.

I also like having that work/home separation. When I leave the office at 5pm, I leave everything behind mentally and physically and don't worry about it until I clock in at 8am the next morning. I currently have a small group of pp clients because in a moment of weakness I succumbed to earning more $$, and I'm in the process of trying to transfer/terminate with them because it is just mentally draining. My rented pp office is close to home so it is so tempting on weekends to say, "Oh, I could just pop by and catch up on some treatment planning..." Ew.

Also, I hate having to calculate, set aside money for, and do my own business taxes lol.
 
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beginner2011

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I'm not a fan of pp so I'll be agency 'til the day I die.

I used to work as the practice manager of a group private practice and it completely turned me off to the administrative side of pp. I did AP/AR, fixed up the building, did credentialing, submitted claims, called the providers when the claims got erroneously denied (the worst part by far), hired new clinicians, did the marketing and PR, ran metrics, maintained our website, researched/purchased/moved all our paper files to an EMR... basically, if it wasn't therapy in the room, I did it. I worked full time throughout grad school and it helped me SO much once I started doing internship and post-graduate hours. I knew so much more about insurance, health records, etc. than my colleagues.

That said, I could not imagine doing what I did as a practice manager ON TOP OF providing psychotherapy to clients. That's like two jobs. And me being a hyper type A, there's no way I wouldn't go hard 110% on things like marketing. Nah, it's much more cost effective for me to have someone else deal with all the administrative stuff. I've been my own boss many times in the past (i.e. I ran a fairly successful design firm in a past career/life), and I'm tired of it.

I also like having that work/home separation. When I leave the office at 5pm, I leave everything behind mentally and physically and don't worry about it until I clock in at 8am the next morning. I currently have a small group of pp clients because in a moment of weakness I succumbed to earning more $$, and I'm in the process of trying to transfer/terminate with them because it is just mentally draining. My rented pp office is close to home so it is so tempting on weekends to say, "Oh, I could just pop by and catch up on some treatment planning..." Ew.

Also, I hate having to calculate, set aside money for, and do my own business taxes lol.

You aren't tempted to do a group practice and hire out the administrative tasks to someone so you could just do psychotherapy? With your knowledgebase you could probably hire well and set things up so you'd only be responsible for the tasks you found most valuable to you, no?
 

TCP

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For those that worked/plan to work at an agency full time + small private practice, is there work-life balance or do you feel like you’re hustling constantly?

Thanks for everyone’s inputs! So insightful.
 

BuckeyeLove

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For those that worked/plan to work at an agency full time + small private practice, is there work-life balance or do you feel like you’re hustling constantly?

Thanks for everyone’s inputs! So insightful.

Early on in my career: yes. Now: I have more control, so no. My primary employment is also very flexible and not overly demanding (relatively speaking). You'll learn what works for you and what your limits are when you dive in.
 

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I've always had zero desire to do private practice because I have zero desire to own my own business, honestly.

You'd be amazed at the broad array of tax deductions you can use to shield your money in businesses. In my experience with owning rental property and now with side PP stuff, it's incredible. One caveat, get a good tax person, unless you are super knowledgeable of the tax code, I wouldn't recommend going that part solo. Not to mention, your ability to throw a great deal of money into retirement plans that you can't do in agency sponsored plans.
 
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Side question: Do you guys deduct your car? My old boss used to do this. I'm about to snag a new ride, so should I make that my "business vehicle?" I do drive places for PP evals, so I don't think it would raise any eyebrows, unlike my best friend who is a dentist and his practice is in his house and he still has his car as his business car.
 
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WisNeuro

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Side question: Do you guys deduct your car? My old boss used to do this. I'm about to snag a new ride, so should I make that my "business vehicle?" I do drive places for PP evals, so I don't think it would raise any eyebrows, unlike my best friend who is a dentist and his practice is in his house and he still has his car as his business car.

Not at the moment. Most of my side work is local, so it's essentially just driving to an office. And, I am still employed full-time at another position. I was planning on talking with the accountant about it if I go full PP, but for now, I'm thinking it's a decent way to get audited. That's one deduction that I do not know the nuances of the legal aspect, so I leave it alone for now.
 
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conky124

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Side question: Do you guys deduct your car? My old boss used to do this. I'm about to snag a new ride, so should I make that my "business vehicle?" I do drive places for PP evals, so I don't think it would raise any eyebrows, unlike my best friend who is a dentist and his practice is in his house and he still has his car as his business car.

My father and sister are real estate brokers, they successfully write off the lease on their personal cars because they will often drive clients to show them houses. I find it hard to justify a similar use of a personal car for a psychologist. That being said, maybe you could do drive to your clients and do therapy in the car and write that off as a business car. Just a crazy idea
 

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Side question: Do you guys deduct your car? My old boss used to do this. I'm about to snag a new ride, so should I make that my "business vehicle?" I do drive places for PP evals, so I don't think it would raise any eyebrows, unlike my best friend who is a dentist and his practice is in his house and he still has his car as his business car.

I don't, but know of (non-psychologists) who do. As was mentioned above, I'd definitely consult with a CPA or some other knowledgeable party before attempting this. They may suggest you purchase the car using your business account and in your company's name, etc.

As an alternative, it may be easier and less likely to trigger an audit to track your mileage and claim that. But I'm no expert.
 
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Sanman

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My father and sister are real estate brokers, they successfully write off the lease on their personal cars because they will often drive clients to show them houses. I find it hard to justify a similar use of a personal car for a psychologist. That being said, maybe you could do drive to your clients and do therapy in the car and write that off as a business car. Just a crazy idea

Plenty of geropsychologists have sessions or assessments at client homes. You are also using the car to drive to your office if you are in PP full-time.
 
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WisNeuro

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Plenty of geropsychologists have sessions or assessments at client homes. You are also using the car to drive to your office if you are in PP full-time.

Plus, there actually is a good amount of demand, at least in my area, for IME examiners to travel to more rural areas to perform assessments. If I start doing that I'd look at vehicle deduction. Because why not get that deduction in addition to being paid a large amount of money for the time I spend sitting in my car listening to the radio.
 
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Sanman

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Plus, there actually is a good amount of demand, at least in my area, for IME examiners to travel to more rural areas to perform assessments. If I start doing that I'd look at vehicle deduction. Because why not get that deduction in addition to being paid a large amount of money for the time I spend sitting in my car listening to the radio.

Prior to COVID, the government did this for me. Starting to miss those days.
 

Sanman

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Govt still making you use those terrible Ford Focus models? Those things sucked in the snow.

They are still around along with some elantras at the medical center. However, since they do not have cars for our clinic we get mileage reimbursement for personal vehicles. No better really (they use mapquest mileage, lol), but less back pain from cheap car seats at least.
 

AcronymAllergy

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They are still around along with some elantras at the medical center. However, since they do not have cars for our clinic we get mileage reimbursement for personal vehicles. No better really (they use mapquest mileage, lol), but less back pain from cheap car seats at least.

I didn't use the gov vehicles much, but when I did, I always felt super-official with the snazzy government license plates.
 
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foreverbull

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I think one of the biggest challenges of PP is if you are not business savvy, it’s a steep curve to figuring things out on your own while either losing money or breaking even for awhile (grad school doesn’t prepare you for this). This assumes one fully transitions to full time PP from an agency job without subletting an office a few evenings. It can be a bit disheartening to calculate how much you have to make in a month before you even break even with business expenses once you start, and the amount you’d need to make to live comfortably. That number is MUCH higher in private practice than an agency because of the business expenses, taxes, retirement, health/dental/vision, and calculating time off that results in reduced income for each week of vacation. The numbers needed start looking really high, even exorbitant for someone just starting out and jumping in. I also know a few folks who made a decent amount of money in PP but can’t retire now that they’re in their 60s because they didn’t put enough away into retirement.

PP is higher income potential, with potential being the key word and risk involved. A lot of factors play into the success of PP: startup income, referral source if any, where you practice (SES), local saturation, evening or weekend availability, specialty, reputation/networking, marketing presence, etc. Snags with any of the above can be a big setback to stable income, but success means higher range of pay—greater risk, greater reward.

I would say this path is definitely not for everyone.

Edit: one thing many folks don’t also account for is that prime PP hours are around 3-7 p.m. Those slots fill up fast during the week, with morning typically being more difficult for folks to fit into their schedules regularly. If you do want to do PP, you have to consider whether a schedule with heavy afternoon/evenings is ideal for you, and if not, your availability will also limit your own income.
 
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summerbabe

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Govt still making you use those terrible Ford Focus models? Those things sucked in the snow.
I had access to a sweet hybrid Ford Fusion during a MHICM/ICMHR postdoc rotation recently. I was really sad when the motorpool pulled it for a basic minivan and I may genuinely consider it for my next vehicle even though I've only ever owned Japanese cars.

For me, I'm 100% agency until the bureaucracy/politics become truly unbearable. And I would worry about becoming overly obsessed and unable to disengage with the non-clinical aspects of PP.
 
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Sanman

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I had access to a sweet hybrid Ford Fusion during a MHICM/ICMHR postdoc rotation recently. I was really sad when the motorpool pulled it for a basic minivan and I may genuinely consider it for my next vehicle even though I've only ever owned Japanese cars.

For me, I'm 100% agency until the bureaucracy/politics become truly unbearable. And I would worry about becoming overly obsessed and unable to disengage with the non-clinical aspects of PP.

The hybrid Fusions are nice, I have one and it beats the hell out of the base Focus. Unfortunately, you won't be buying one new because Ford stopped making them.
 
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WisNeuro

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I had access to a sweet hybrid Ford Fusion during a MHICM/ICMHR postdoc rotation recently. I was really sad when the motorpool pulled it for a basic minivan and I may genuinely consider it for my next vehicle even though I've only ever owned Japanese cars.

For me, I'm 100% agency until the bureaucracy/politics become truly unbearable. And I would worry about becoming overly obsessed and unable to disengage with the non-clinical aspects of PP.

You could always join/start a practice with some others, and split the costs of an experienced administrative assistant. As for taxes, you should have a professional dealing with those anyway.
 
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PsyDr

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Side question: Do you guys deduct your car? My old boss used to do this. I'm about to snag a new ride, so should I make that my "business vehicle?" I do drive places for PP evals, so I don't think it would raise any eyebrows, unlike my best friend who is a dentist and his practice is in his house and he still has his car as his business car.

You have to either:

1) Get an LLC, get it registered under a specific agency that allows you LLC to have a credit rating, and then get a car REGISTERED TO THE LLC, NOT YOU. If you do this, you HAVE to ALSO have a personal car that is registered and insured. Hint: your state knows how many cars you have, and I would be shocked if that information was not available to the IRS.

2) Just deduct your mileage. You can ONLY deduct your travel from one office to another place of business. For example, you couldn't deduct your mileage from your house to your office. You could deduct your mileage from your office to a prison. Those that have an ACTUAL home office can have additional benefits. DO NOT SCREW AROUND WITH A HOME OFFICE. It HAS to be a defined space, that has NOTHING to do with your personal stuff. The IRS can show up and look around. You do not want to be the guy with a bunch of children's toys in your home office, explaining to the IRS that this is definitely not your kids' play room.

3) You can lease a car under your LLC after getting a credit rating for the LLC. Then deduct the monthly payments. I believe you cannot deduct mileage on that, but ask your tax person. Again, you have to have a personal car. And you likely have to store the business car at the office, not your house.

In the case of #1 or #3, one would be wise to not buy something very expensive. Outside of some specific explanations/loopholes, the IRS isn't gonna believe that a psychologist needs a lambo for a business ride.
 
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Sanman

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You have to either:

1) Get an LLC, get it registered under a specific agency that allows you LLC to have a credit rating, and then get a car REGISTERED TO THE LLC, NOT YOU. If you do this, you HAVE to ALSO have a personal car that is registered and insured. Hint: your state knows how many cars you have, and I would be shocked if that information was not available to the IRS.

2) Just deduct your mileage. You can ONLY deduct your travel from one office to another place of business. For example, you couldn't deduct your mileage from your house to your office. You could deduct your mileage from your office to a prison. Those that have an ACTUAL home office can have additional benefits. DO NOT SCREW AROUND WITH A HOME OFFICE. It HAS to be a defined space, that has NOTHING to do with your personal stuff. The IRS can show up and look around. You do not want to be the guy with a bunch of children's toys in your home office, explaining to the IRS that this is definitely not your kids' play room.

3) You can lease a car under your LLC after getting a credit rating for the LLC. Then deduct the monthly payments. I believe you cannot deduct mileage on that, but ask your tax person. Again, you have to have a personal car. And you likely have to store the business car at the office, not your house.

In the case of #1 or #3, one would be wise to not buy something very expensive. Outside of some specific explanations/loopholes, the IRS isn't gonna believe that a psychologist needs a lambo for a business ride.

I get the vibe that you don't like to play chicken with the IRS and dare them to audit you. How boring. Why not start a Tai Lopez style executive coaching practice and lease 3 lamborghinis and a mansion to use in your Youtube spam advertising? This seems like a foolproof plan to me.
 
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AcronymAllergy

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You have to either:

1) Get an LLC, get it registered under a specific agency that allows you LLC to have a credit rating, and then get a car REGISTERED TO THE LLC, NOT YOU. If you do this, you HAVE to ALSO have a personal car that is registered and insured. Hint: your state knows how many cars you have, and I would be shocked if that information was not available to the IRS.

2) Just deduct your mileage. You can ONLY deduct your travel from one office to another place of business. For example, you couldn't deduct your mileage from your house to your office. You could deduct your mileage from your office to a prison. Those that have an ACTUAL home office can have additional benefits. DO NOT SCREW AROUND WITH A HOME OFFICE. It HAS to be a defined space, that has NOTHING to do with your personal stuff. The IRS can show up and look around. You do not want to be the guy with a bunch of children's toys in your home office, explaining to the IRS that this is definitely not your kids' play room.

3) You can lease a car under your LLC after getting a credit rating for the LLC. Then deduct the monthly payments. I believe you cannot deduct mileage on that, but ask your tax person. Again, you have to have a personal car. And you likely have to store the business car at the office, not your house.

In the case of #1 or #3, one would be wise to not buy something very expensive. Outside of some specific explanations/loopholes, the IRS isn't gonna believe that a psychologist needs a lambo for a business ride.

What about a Ferrari? They're infinitely more practical.
 

PsyDr

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I get the vibe that you don't like to play chicken with the IRS and dare them to audit you. How boring. Why not start a Tai Lopez style executive coaching practice and lease 3 lamborghinis and a mansion to use in your Youtube spam advertising? This seems like a foolproof plan to me.

I strongly believe in understanding the rules, and playing by them. And I believe that if you are gonna risk your license, you'd better risk it for an amount of money that vastly exceeds your lifetime earning potential. Otherwise, you're just bad at math.

Scientology, Al Capone, etc didn't have problems with the FBI... they had problems with the IRS. That should tell you something. If the FBI came after you, you could always fight the case with your money, or run to a non-extradition country with your money. If the IRS came after you, they'd seize all of your assets so you can't really flee or fight. Then they can turn it over to the FBI.

But, once the IRS started an audit of me, and it was AWESOME! They went through ~5 years, and ended up owing me mid to high 5 figures. They decided they didn't want to go through the remaining years available to them.


@AcronymAllergy Ferraris are like $250k. Lambos are like $300k. And the lambo company was (and is) a tractor company that got into the car game to spite Mr. Ferrari, after a social snubbing. Plus lambos are cheaper to maintain, and mostly hold their value better.
 
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Sanman

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@AcronymAllergy Ferraris are like $250k. Lambos are like $300k. And the lambo company was (and is) a tractor company that got into the car game to spite Mr. Ferrari, after a social snubbing. Plus lambos are cheaper to maintain, and mostly hold their value better.

Chump change, but they can't make it up my drive way. I much preferred Aston Martin for looks and driving experience before they became ugly, though I hear the Ferrari portofino is a nice daily driver. The altogether more cheap and reasonable BMW M4 was the best car I ever drove in the real world.
 
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[/QUOTE]
But, once the IRS started an audit of me, and it was AWESOME! They went through ~5 years, and ended up owing me mid to high 5 figures. They decided they didn't want to go through the remaining years available to them.

I'm intrigued... how in the world did that happy ending come about? DId you learn new things about filing your taxes after that?
 
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chicandtoughness

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You aren't tempted to do a group practice and hire out the administrative tasks to someone so you could just do psychotherapy? With your knowledgebase you could probably hire well and set things up so you'd only be responsible for the tasks you found most valuable to you, no?
Nope, no temptation at all. I wouldn't trust someone to oversee all aspects of administration (and in reality, you'd probably want at least three people for this stuff if you want to scale well - one for operations, one for billing, and one for marketing)... and then I'll probably go into Annoying Micromanager Mode, and that won't be fun for anyone. I also previously worked in HR and I hate the hiring process hahaha.
 

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