Tax season is approaching, and for locum tenens physicians and advanced practice providers, filing can be more complex than it is for traditional employees. Since locum tenens professionals are typically independent contractors rather than employees of staffing agencies or healthcare facilities, it’s crucial to understand tax obligations, deductions, and filing requirements. Here’s a guide to help you prepare.
Understanding Your Tax Status
As a locum tenens provider, you are considered self-employed rather than a W-2 employee. This means:
- You will not receive a W-2 from staffing agencies or healthcare facilities.
- Instead, you’ll receive a Form 1099-MISC, which reports total income earned.
- You are responsible for paying your own taxes, including self-employment tax for Social Security and Medicare.
Essential Tax Forms for Locum Tenens Providers
- Form W-9 – Before starting an assignment, you’ll provide this form to confirm your Taxpayer Identification Number (TIN) or Social Security Number (SSN).
- Form 1099-MISC – Issued by agencies or healthcare organizations to report your total earnings for the year.
- Schedule C (Form 1040) – Used to report business income and expenses, including deductions.
Quarterly Estimated Tax Payments
Since taxes are not automatically withheld from your earnings, you must make estimated tax payments throughout the year. The IRS requires quarterly payments in:
- April
- June
- September
- January (of the following year)
Failure to pay estimated taxes on time could result in penalties and interest.
Tax Deductions for Locum Tenens Professionals
To reduce taxable income, take advantage of eligible deductions, including:
- Travel expenses – Flights, gas, rental cars, lodging, and meals while on assignment.
- Medical licensing & certifications – Costs associated with renewing or obtaining state licenses.
- Malpractice insurance – Premiums for professional liability coverage.
- Continuing medical education (CME) – Fees for conferences, courses, and materials.
- Home office deduction – If you manage your locum tenens work from a dedicated home office.
- Professional association fees – Memberships in medical organizations.
State Income Tax Considerations
Not all states impose an income tax, but if you worked in a state that does, you must comply with its tax laws. Some locum tenens providers owe taxes in multiple states based on where they worked throughout the year.
Seek Professional Tax Assistance
To avoid mistakes and maximize deductions, consult a tax professional who specializes in self-employment and physician taxes. You can also check the Directory of Federal Tax Return Preparers to find a qualified expert.
Final Thoughts
Tax preparation for locum tenens professionals requires planning, organization, and knowledge of self-employment tax laws. By staying proactive, tracking expenses, and making quarterly estimated tax payments, you can minimize stress and maximize deductions.
Would you like to explore more locum tenens opportunities? Contact Sendoc Locums today!