As a locum tenens physician or advanced practitioner, you are considered an independent contractor. This means you have the freedom to manage your schedule and work on your terms. However, with that independence comes the responsibility of handling your own taxes. Since earnings aren't automatically withheld, tax preparation requires a proactive approach.

The good news? A little planning can go a long way in making tax season easier. Understanding key deadlines, deductions, and filing requirements will help you stay ahead and avoid last-minute stress.

The Difference Between W-2 and 1099

W-2s are issued to company employees. Their pay is processed through their employer's payroll, and tax payments are automatically withheld from compensation.  

In most cases, if you provide locum tenens services, you are classified as an independent contractor. 1099 independent contractors receive the full pay earned without tax deductions. The IRS considers independent contractors to be self-employed individuals. As stated by the IRS, a different set of tax payment and filing rules applies to independent contractors than W-2 employees.

If you work locum tenens assignments in addition to a full-time employed position, you will receive both a 1099 and a W-2. To file your taxes, you will need to gather your 1099s (you may have several of them) and any W-2s. All of the companies you worked for are required to send you documentation of work by January 31. If you do not receive W-2s or 1099s from every company you have worked for, make sure to follow up so you can properly file and pay your taxes.

Find Your Qualified Tax Preparer

Partner with a qualified tax preparer who will organize your documentation and build a financial plan to ensure your tax requirements are fulfilled. Tax regulations are complex, and liabilities vary across state lines. Working with a tax preparer can relieve stress and worry.

We suggest you partner with a preparer who has expertise in locum tenens tax plans and is well-informed about the laws in the specific states you practice. As part of the My Medicus Loyalty Program, you have access to customized tax resources and support to ensure you are set up for success.

Know Your Tax Deadline

This year's deadline for filing taxes is Tuesday, April 15, 2025, although those living in certain areas impacted by natural disasters have additional time to file.

If you expect to owe more than $1,000 when you file your return, the IRS requires that you file quarterly estimates on your taxes. Paying quarterly avoids having to pay a large lump sum on Tax Day. View Form 1040-ES provided by the IRS as a way to estimate your quarterly tax payments. Missed quarterly payments will result in penalties and interest. You can pay online, by mail, or by phone.

Knowing your deadline to file, or if needed, requesting an extension to file, and making sure you file on time will save you from wasting money on late fees and penalties. Please consult with your tax preparer to ensure you understand deadlines and requirements.

Determine Your Deductions and Credits

Deductions and credits can lower your tax burden. Common deductions include those associated with airfare, lodging, meals, internet, phone, educational expenses, and charitable giving, along with medical and other insurance expenses. Contributions made to a retirement plan are also tax-deductible. Always make sure to keep your receipts for all of your work expenses, just in case!

Optimize Resources

We all know how confusing and complicated tax forms can be, but it is important to try and avoid costly mistakes. The IRS is a vital resource that provides help online or via phone.

Smooth Filing Starts with Preparation

We know tax season can feel complicated, but with the right preparation, it doesn’t have to be stressful. Keep track of important deadlines, explore available deductions, and seek guidance from a tax expert to make filing as smooth as possible.

At Medicus, we are committed to supporting locum tenens physicians and advanced practitioners year-round. If you're interested in working locum tenens with Medicus, fill out the short form below and connect with a Medicus Recruiter!