As an independent contractor, you are entitled to certain tax deductions for your business expenses.
Monday, April 15th. Tax Day 2019 is coming faster than you realize. While working locum tenens, you’re considered an independent contractor, which comes with additional tax burdens. The Tax Cuts and Jobs Act, signed by President Donald Trump in December of 2017, brought many changes that started taking place in January of 2018. There are some potential big savings with the new business deductions, especially if you’re a first-time locum tenens. Between now and 2025, many independent contractors may be entitled to lop off a tax deduction of 20% on qualified business income.1
There Are 2 Major Differences for Those Who File a 1099 Form:
- The standard deduction for taxpayers has increased, personal exemptions have been suspended through 2025. This will make it harder for some taxpayers to itemize their tax deductions.
- “Pass-through income” is only 80% taxable. This applies to self-employed sole proprietorships, S corps, and partnerships that have qualified business income (QBI).
How the 20% Tax Break Works for Locum Tenens Physicians:
Independent contractors are eligible for tax savings on pass-through income. Locum tenens physicians are able to deduct 20% of their QBI from their tax return (which leaves 80% of your income to be taxed).
At Mint Physician Staffing, we suggest consulting a CPA or tax professional who can clarify the new tax law and offer you tax advice when it comes down to what you can and cannot deduct from your 2018 taxes.
Disclaimer: The information above is a tax guide and tips meant for informational purposes and should not be considered tax advice.
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