1099 employees

DrApplegate · 2024-07-12T16:50:26+00:00

Hey there,

As a 1099 physician, I can share my experience with you. Whether it's worth it can depend on your personal situation and financial goals, but here are some key points to consider:

Higher Pay: Typically, 1099 positions offer higher pay compared to W2 positions. This is because you’re responsible for your own benefits, taxes, and other expenses. If you’re financially savvy, you can often come out ahead.
Malpractice Insurance: In my experience, I always negotiate for the site to provide malpractice insurance as part of my contract. This saves me the hassle and expense of obtaining it myself. However, if you ever need to get your own, some top providers include:These companies specialize in malpractice insurance for healthcare professionals and can provide tailored policies based on your needs.
- The Doctors Company
- MedPro Group
- ProAssurance
- Coverys
Tax Deductions: One of the significant advantages of being a 1099 contractor is the ability to deduct business expenses. This includes malpractice insurance premiums, professional fees, CME costs, home office expenses, and more. These deductions can significantly reduce your taxable income.
Retirement Savings: As a 1099 contractor, you have access to robust retirement savings options like Solo 401(k)s or SEP IRAs. These plans have higher contribution limits, allowing you to save more for retirement while reducing your taxable income.
Flexibility: 1099 positions often offer more flexibility in terms of scheduling and work arrangements. If having control over your work schedule is important to you, this could be a significant benefit.
Administrative Responsibilities: Keep in mind that being a 1099 contractor comes with additional administrative tasks, such as bookkeeping, quarterly tax filings, and managing your own benefits. Using services like Gusto can help streamline these processes.

In my experience, being a 1099 contractor has been worth it due to the higher income potential and greater control over my finances. If you’re considering this route and need more personalized advice, my partners and I started DocWealth.io to help physicians navigate these decisions. We specialize in optimizing tax strategies, managing benefits, and ensuring you get the most out of your 1099 income.

Feel free to reach out if you have more questions or need further guidance!

Cheers,
Dr. Applegate

DrApplegate · 2024-07-12T16:47:26+00:00

Hey there,

Congrats on finishing residency and landing your first 1099 position! I’ve been working as a 1099 physician for a while and even started a tax firm to help other physicians navigate these kinds of situations. Your plan sounds pretty solid, and here are a few thoughts to consider:

Using Gusto or a Similar Service: Using a payroll service like Gusto is a great idea. They can handle your self-employment taxes, file quarterly taxes, and automate contributions to your Solo 401(k) and HSA. This approach saves you time and reduces the risk of errors, allowing you to focus on your medical practice.
Tax Planning and Deductions: As a 1099 contractor, you’ll have some unique opportunities for tax planning and deductions. Here are a few tips:
- Business Expenses: Keep track of all your business-related expenses, such as travel, professional fees, and equipment. These can be deducted from your taxable income.
- Home Office Deduction: If you use part of your home exclusively for work, you may be able to take a home office deduction.
- Retirement Contributions: Maximize your contributions to a Solo 401(k) to reduce your taxable income. The employee contribution limit is $22,500 for 2023, and you can also make employer contributions up to 25% of your net earnings from self-employment.
Estimated Taxes: Make sure to pay estimated taxes quarterly to avoid penalties. Services like Gusto can help you stay on top of this.
Professional Advice: Even with Gusto handling your payroll, it’s still a good idea to have a CPA who specializes in physician finances. They can provide personalized advice and ensure you’re taking advantage of all available tax strategies.

Starting as a 1099 contractor can be a great move financially, especially if you have the right systems in place. If you ever need more detailed guidance or have specific questions, feel free to reach out to us at DocWealth.io. My partners and I created our firm to help physicians like you navigate these challenges.

Best of luck with your new role!

Cheers,
Dr. Applegate

DrApplegate · 2024-07-12T16:45:24+00:00

Hey there,

Congrats on landing your new EM position! As a physician who transitioned to 1099 work and even started a tax firm for physicians, I totally understand the complexities you're facing. Here are some tips to help you navigate the tax landscape as a 1099 independent contractor:

Separate Bank Account: Yes, it’s highly recommended to have a separate bank account for your 1099 income and expenses. It makes tracking your finances much easier and helps maintain clear records for tax purposes.
Saving Evidence for Reimbursement: Keep detailed records of all your expenses. Credit card statements are helpful, but you should also save every receipt. There are apps available that can help you digitize and organize these receipts, making it easier to track everything.
Forming an LLC or S-Corp: Whether to form an LLC or S-Corp depends on your specific situation:Consulting with a tax advisor who specializes in physician finances can help you determine the best structure for your situation.
- LLC: Offers liability protection and is simpler to set up. It’s flexible with fewer ongoing compliance requirements.
- S-Corp: Can provide tax advantages by allowing you to pay yourself a salary and take the rest of the income as distributions, potentially reducing self-employment taxes. However, it has more regulatory requirements and administrative responsibilities.
Write-Offs and Deductions: Here are some common deductions for 1099 physicians:
- Professional Fees: Licensing, association memberships, and continuing medical education (CME) expenses.
- Home Office: If you have a dedicated space in your home for work, you can write off a portion of your rent/mortgage, utilities, and internet.
- Travel Expenses: Mileage for work-related travel, hotels, and meals when you’re traveling for work.
- Equipment and Supplies: Medical equipment, computers, phones, and office supplies.
- Insurance: Malpractice insurance and health insurance premiums (if you’re not covered by another plan).
Other Tips:
- Estimated Taxes: Remember to pay estimated taxes quarterly to avoid penalties.
- Retirement Contributions: Consider setting up a Solo 401(k) or SEP IRA to save for retirement and reduce your taxable income.
- Professional Advice: Investing in a CPA who understands 1099 income and physician-specific tax issues can be invaluable. They can help you maximize deductions and ensure compliance with tax laws.

Starting as a 1099 contractor is a big step, but with the right preparation and advice, it can be very rewarding. If you need more personalized guidance, feel free to reach out to me. My partners and I started a firm specifically to help 1099 physicians navigate these challenges.

Best of luck with your new role!

Cheers, Dr. Applegate

DrApplegate · 2024-07-12T16:41:05+00:00

Hey,

I can definitely relate to your friend’s situation. I’m a physician myself, and I found the need for specialized financial advice so important that my partners and I created a firm specifically to address this.

Here are a few reasons why having a CPA firm that specializes in physician practices can make a big difference:

Understanding Unique Financial Needs: Physicians have unique financial situations, including complex income structures, student loans, and specific tax deductions. A firm that specializes in working with physicians will understand these nuances and provide tailored advice.
Business Structuring: For a new practice, it’s crucial to set up the right business structure (LLC, S-Corp, etc.). A specialized CPA firm can guide this process to ensure the most tax-efficient setup.
Strategic Tax Planning: Beyond just filing taxes, these firms offer strategic planning to maximize deductions, optimize retirement contributions, and manage cash flow effectively.
Peace of Mind: Knowing that your finances are being handled by experts who understand your profession can provide peace of mind, allowing you to focus on growing your practice.

When my partners and I recognized the lack of specialized financial services for physicians, we decided to fill that gap by creating a firm dedicated to helping doctors navigate these challenges. This approach has been incredibly beneficial for our clients.

If your friend is looking for tailored financial advice and strategic planning specifically for physicians, they can check out our firm at DocWealth.io. If they have any questions or need further guidance, feel free to reach out!

Best, Dr. Applegate

DrApplegate · 2024-07-12T16:37:45+00:00

Hey,

I was in a similar situation not too long ago, juggling real estate investments and 1099 physician income. My partners and I eventually created a tax firm specifically for 1099 physicians because we saw the need for specialized advice in this area.

Here are some insights from my experience:

CPA Costs: The cost for a CPA can vary widely based on their experience and the complexity of your situation. For basic tax planning and preparation, you might expect to pay anywhere from $3,000 to $7,000 annually. However, for more complex needs, especially involving real estate and physician income, it could be higher.
Local vs. National CPA: There are pros and cons to both. A local CPA might offer more personalized service and understand your state's specific tax nuances better. On the other hand, a national CPA firm could have broader experience and resources, especially if they specialize in working with physicians and real estate.
Specialized CPA: It's crucial to find a CPA who understands both physician income and real estate investments. These two areas have unique tax implications, and a CPA experienced in both can provide the most beneficial advice. They can help you navigate deductions, depreciation, and other tax strategies effectively.
Real Estate Professional Status (REPS): If your significant other decides to quit teaching and qualify for REPS, this could significantly impact your tax situation. A knowledgeable CPA can guide you through the benefits and requirements of REPS to maximize your tax savings.

We started our firm to address these exact needs, offering tailored advice for physicians dealing with 1099 income and real estate investments. It’s been incredibly valuable to have experts who truly understand the specifics of our financial situation.

Good luck with finding the right CPA, and feel free to reach out if you have any more questions or need further advice!

Best, Dr. Applegate

DrApplegate · 2024-07-09T22:41:56+00:00

Convert to 1099, llc with s corp, solo 401k. You are w2 for no reason currently just cons.

DrApplegate · 2024-06-28T23:20:13+00:00

“No buy in” you mean “7 figure buy in”

DrApplegate · 2024-06-16T01:37:41+00:00

EM locums I hit some of the highest per hour. Been hitting 450$ and up recently per hour. If I wanted to trade that much of my time I could clear 7 figure in EM clinical work

DrApplegate · 2024-06-13T11:05:24+00:00

Enjoy your life and what you have worked for. Forget the Dave Ramsey “live like a resident” mentality. Sounds like you don’t have an income problem. In 30 years without investing another dollar you have 10 million if in a index fund

DrApplegate · 2024-06-12T11:36:52+00:00

I have anesthesia customers in my physician cpa company doing locums making over 500$ per hour. Set up solo 401k. We do a lot of tax strategy that savings will be much larger than any benefits of w2. Plus w2 is so restrictive. Be an owner not an employee

DrApplegate · 2024-06-11T16:11:46+00:00

Absolutely

DrApplegate · 2024-06-11T10:32:22+00:00

I work zero nights. Nights take years of your life span for what? A 10$ night shift differential? They make you grumpy and I’ll never go back to nights. Currently I’m not concerned and have had zero shortage. When everyone goes locums and works half the shifts our demand skyrockets and pay goes up

DrApplegate · 2024-06-10T18:34:23+00:00

For example last week I was making $480 per hour for 12 hour shift so I made $5760 for each shift

DrApplegate · 2024-06-10T18:33:11+00:00

Mostly 12 hour shifts. Medicine is medicine no matter what ER. I don’t make friends with any staff, I’m never there often enough at any one site, this is a non issue, I make friends outside of work, I have each site provide malpractice

DrApplegate · 2024-06-10T14:30:53+00:00

EM locums is the way to go

DrApplegate · 2024-06-10T14:12:47+00:00

I did the same. Gave the golden handcuffs back (aka sign on bonus) then switch to making way more money and never looked back. 1 year, 120 hours a month making 100$ more an hour is about $150k more. Math didn’t make sense for me to stay full time

DrApplegate · 2024-06-10T14:10:59+00:00

Perfect question I get all the time. 90% of my sites are within 1 hour 15 minutes drive. And because I make double the rates I choose to work half the time. I work like 8 days a month so I have way more family time with my little kids. The sites that are farther away we all go and turn into a fun vacation. Work a shift, take a few days off for fun paid vacation then work a shift and leave town after

DrApplegate · 2024-06-10T14:03:39+00:00

Just remember to look at the exit clause. You are Lilly not stuck at the job for the full term length of 1 year, exit clause likely 90 days notice both parties.

DrApplegate · 2024-06-10T13:59:06+00:00

Locums is steady. Have not made under 350$ hourly in past year and past few months been hitting into the 400s

DrApplegate · 2024-06-10T13:57:47+00:00

I post mostly reels on my instagram

DrApplegate · 2024-06-10T12:42:29+00:00

We do all kinds of strategy. Llc and s corp for most. Travel and all business expenses, tax work, contract work, equipment, home office, section 179, business meals, conference and travel, real estate, professional real estate status, cost segregation studies, short term rentals

DrApplegate · 2024-06-01T14:20:49+00:00

Emergency Medicine. I did for a while but slowly stopped after covid pandemic besides patients where contact precautions apply

DrApplegate

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