Tax season is here again! Tax Day 2020 is Wednesday, April 15.
If you are a locum tenens physician working several jobs throughout the year, chances are you’re going to be filing 2020 taxes in different states from different healthcare facilities. This also means you must account for all deductions and tax benefits for each assignment. Filing locum tenens taxes is going to take a deal of time and effort. Not to mention, locum tenens physician taxes are different than employee taxes with a W-2 form. Our physician recruiters are here to share a short tax guide for filing locum tenens taxes in 2020, as well as other helpful tax tips to consider this fiscal year.
What You Need to Know About Filing Locum Tenens Physician Taxes
Locum tenens physicians are classified as independent contractors for the medical institution or healthcare facility, rather than permanent employees. Upon hiring, 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 31 is the deadline for companies to deliver the 1099 forms to 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 at 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 2020 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.
Locum Tenens Physicians Tax Deductions
As an independent contractor working through a locum tenens agency, 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 locum tenens tax advice.
Latest posts by Elvin Matos (see all)
- Increase in Mental Health Issues During COVID-19 Pandemic - October 19, 2020
- Trends in Telehealth in 2020 - April 27, 2020
- Telemedicine and COVID-19 - March 24, 2020