It’s that time of year again… Tax season! Filing your taxes as an independent contractor can be complex, involved, and change from year to year—and as a physician, you may be in a special category on top of all that. Tax Day this year is April 15, 2019, according to the IRS, so make sure you have filed your income tax details before this date. There’s still time before you have to have everything in, so now’s the time to make sure you have all the proper documentation in order.
Worried about your deductions or not sure that you’re filing correctly? Seek out expert advice to simplify the process and make sure claim every deduction you’re qualified for.
Going it alone? Read on for our tax advice for locum tenens physicians:
Locum Tenens Means 1099
In a permanent position, you fill out an IRS W-2 form to file your taxes, but as an independent contractor, you will need to fill out an IRS 1099-MISC form. Instead of your employer withholding an amount from your paycheck, you are responsible for calculating your own tax payments and paying at the appropriate time. If locums is your main source of income, you may need to make quarterly payments rather than just paying once at the end of the year.
Document Your Expenses
One of the most important elements of tax season doesn’t occur during tax season. Any eligible deductions you want to claim must be documented for the entire previous year at the time the expense occurs. Using a business card designed for solo entrepreneurs can help with this—that way all your expenses are all in one place and easy to track for record-keeping purposes.
From business supplies to professional liability insurance, there are quite a few deductions that you can claim as a locum tenens physician. When you correctly identify and document your expenses, you may be able to reduce your taxable income. If you’re not sure what qualifies as a deductible expense, document everything and ask a CPA to review to ensure your tax deductions are in order.
Advantages for Locum Tenens
Since, as a locum tenens physician, you qualify as an independent contractor you can also reduce your taxable income by deducting home office expenses, health insurance premiums, and other legitimate deductions of this nature. Depending on your income level, you may also qualify for the Qualified Business Income tax provision (QBI), which allows some independent contractors to deduct up to 20% of their income tax from their return.
Need more information about tax season as locum tenens? The IRS website features step-by-step information, calculators, and extensive information about withholdings. You can also find in-depth articles on tax laws, requirements, and how to file.