Tax season is here again! Tax Day 2019 is Monday, April 15.
As an active locum tenens physician, chances are you’re going to be filing taxes in multiple states, and having to account for all deductions and tax benefits for each assignment is going to take time. Filing locum tenens physician taxes are different than filing employee taxes with a W-2 form – but there’s no need to worry! Our physician recruitment specialists share important information below in a short tax guide, regarding how to file locum tenens taxes, along with other helpful tax tips to consider.
What You Need to Know About Locum Tenens Physician Taxes
Locum tenens physicians are classified as independent contractors for the medical institution, rather than employees. You will have filled out a 1099 form with the locum tenens agency, or agencies, that you have worked for within the past year. This is the most important difference to be aware of when working as a temporary physician. January 31st is the deadline for companies to deliver the 1099 forms that declare the previous year’s compensation to independent contractors.
What Does It Mean to be an Independent Contractor?
Being an independent contractor means that taxes will not be taken out of your paycheck. This means that you are responsible for estimating your own tax payments. It’s important to keep accurate recordings of your earnings throughout the year, as that will help you calculate the taxes you owe.
How to File Locum Tenens Physician Taxes
Plan Ahead with 40%. A good rule of thumb to follow when working locum tenens is to set aside about 40% of your earnings throughout the year so you can pay the taxes you owe.
Submit Estimates Quarterly. Submitting quarterly estimates will help you figure out what you owe and will help minimize the amount you have to pay at the end of the year.
Keep Track of Your Spending. Keeping track of your monthly expenses is helpful for numerous reasons – not only for filing taxes! Separate your work expenses from personal so you can easily deduct them from your income when it’s time to file.
Report Earnings from Other Sources. You’ll want to keep track of all financial events, including buying or selling real estate and earnings from savings accounts or big investments.
Get in Touch with a Tax Specialist. Let’s face it – taxes can be confusing! Consult a CPA or tax professional who can offer you advice and provide you with the help you need to get through tax season once and for all.
Tax Deductions for Locum Tenens Physicians
As an independent contractor, there are plenty of work-related expenses that are tax deductible write-offs:
- Phone bill
- Internet bill
- Equipment used for work
- Board exam fees
- License fees
- Health insurance
- Retirement plans
As mentioned before, a CPA or another tax professional can help you when it comes to what you can and cannot deduct on your locum tenens physician taxes.
Disclaimer: The information above is a tax guide and tips meant for informational purposes and should not be considered tax advice.Leave a reply →