Stress Less with Tax Tips for Locum Tenens
As a locum tenens physician or advanced practitioner through Medicus, you are an independent contractor. This means you have the flexibility to manage and create your schedule while collecting higher compensation rates than employed staff.
Locum tenens empowers you to make more informed decisions about your career path based on factors most important to you. You have the freedom to work in different healthcare environments across various state lines, ultimately furthering your expertise and skillsets. During your travels, it is important to keep documentation and stay organized to ensure your tax season is stress-free.
This year don’t let the looming deadline cause stress. Instead, get ready to stress less and make the most of your earnings! Understanding your tax obligations (and opportunities) is a great place to start.
The difference between W-2 and 1099.
W-2s are issued to individuals that are employed by a company. Pay is produced through their employer's payroll, and tax payments are automatically withheld from compensation.
In most cases, if you are providing 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 that 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 18. Those living in certain areas of Georgia, Alabama, and California impacted by natural disasters have until October 16, 2023, to file. This is an update to the earlier file extension date of May 23, 2023.
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!
We all know how confusing and complicated tax forms can be. The IRS has help available online or via phone. Try avoiding mistakes, as they may cost you money.
At Medicus, it’s important to us that our locum tenens physicians and advanced practitioners feel valued and supported, including during tax season. We are proud to have a partner that can provide tax support, information, and customized services.
We at Medicus wish you a smooth and stress-free tax season!
If you are interested in new locum tenens opportunities and learning more about how Medicus supports and rewards our physicians and advanced practitioners, be sure to check out our job board.