At ProLocums, we believe there is no one-size-fits-all way to organize partnerships with hospitals, and the same applies to our relationship with the physicians we hire to care for patients.
Whether you are employed and receiving a W-2 or are an independent contractor physician receiving a 1099 depends on various factors including specialty and role. Most physicians have been W-2 employees at some point, so they inherently understand this model. The independent contractor (IC) model is a little more foreign to many, so it is important to understand the pros and cons of this tax status.
Transitioning from an employed model to being an independent contractor physician (ICP), or starting your career as an independent contractor, presents a variety of often bewildering questions. One of the first is likely about the difference between forming an LLC and an S Corp.
Choosing the right business structure is a complicated question that depends on your state, personal financial goals, and family needs. To help physicians navigate these choices, we've teamed up with DocWealth.io, which specializes in providing CPA services for 1099 physicians to maximize their earnings. Consulting with a professional like DocWealth.io can help you come up with a plan that fits your particular situation and needs.
In this article, we will discuss why being a 1099 physician is the best option and explore whether you should form an S Corp or an LLC to maximize your financial benefits.
When deciding between forming an LLC or an S Corp as a 1099 physician, it's crucial to understand the distinctions and benefits of each structure.
S Corporation (S Corp): An S Corp, or S corporation, is a type of business entity that offers the advantage of pass-through taxation. This means that the company's profits and losses are passed directly to the individual owners, who report them on their personal income tax returns. This structure helps avoid the double taxation commonly associated with traditional C corporations. Owners of an S Corp can also save on self-employment taxes, as they can take a reasonable salary and distribute remaining profits as dividends, which are typically taxed at a lower rate. [not subject to additional self employment taxes.]
Limited Liability Company (LLC): An LLC, or limited liability company, blends the benefits of a corporation with the flexibility of a partnership or sole proprietorship. LLCs are relatively easy to establish and operate, offering significant flexibility in how they are taxed and how profits and losses are allocated among the owners. The members of an LLC are not personally liable for the company's debts and obligations, providing a layer of personal asset protection. Profits can be distributed among one or more members, making it a versatile choice for many business owners.
Contrary to popular belief, the primary purpose of forming an LLC for physicians is not necessarily to shield from liability, but to create an opportunity to save money through electing S Corp taxation.
How Does an LLC Help Lower Your Tax Bill? An LLC can choose to be taxed as an S Corp, allowing the business owner to take advantage of pass-through taxation while also potentially reducing self-employment taxes. By electing S Corp status, the physician can receive a portion of their income as a salary (subject to payroll taxes) and the remaining as a distribution (not subject to self-employment tax), leading to overall tax savings.
Many independent contractor physicians opt to form an LLC for its ease of setup and then elect S Corp taxation for federal tax benefits. This setup allows physicians to benefit from the simplicity of an LLC while enjoying the tax advantages of an S Corp.
Here’s how it works:
1. Formation and Election:
2. Revenue Flow:
3. Salary and Distributions:
As both the employer and employee, the independent contractor physician can significantly reduce self-employment taxes. For 2024, the self-employment tax rate is 15.3% on earnings up to $160,200, with an additional 2.9% on income above this threshold. By balancing W-2 wages and distributions, physicians can save thousands of dollars annually, primarily on payroll taxes, while still meeting their income tax obligations. This strategy offers substantial savings for independent contractor physicians.
Dr. Smith owns Smith Medical, LLC. ProLocums pays Smith Medical, LLC $325k through 1099 payments. Smith Medical, LLC then pays Dr. Smith a $125k salary via W-2. As a result, Dr. Smith’s payroll tax is calculated only on the $125k salary instead of the entire $325k.
Payroll Tax Implications Without an LLC:
Payroll Tax Implications With an LLC:
By structuring his income this way, Dr. Smith saves over $10,000 in payroll taxes.
The next common question is, “What about the $200k that I’m not taking as wages?” That $200k remains your money and can be accessed through owner distributions or dividends. You can transfer these funds from your business bank account to your personal account with ease. The advantage here is that this $200k is not subject to payroll tax, though it is still subject to income tax.
Forming an LLC and electing S Corp taxation has numerous benefits, but there are also potential downsides. These include compliance with additional tax rules and regulations specific to S Corps. Physicians considering this option should weigh the benefits and drawbacks and consult a tax professional before making a decision. For more information, visit DocWealth.io.
In recent years, the tax landscape for independent contractors has become increasingly complex, making much of the existing online information outdated. Consulting with a tax professional is crucial for understanding your specific situation.
Qualified Business Income (QBI), outlined in Section 199A of the tax code, refers to net income from a qualified trade or business eligible for deductions under the Tax Cuts and Jobs Act of 2017. For independent contractor physicians, this income is eligible, but only if it falls under certain thresholds:
QBI Example:
Understanding QBI and its implications can significantly impact tax planning and savings for independent contractor physicians. For more detailed advice tailored to your circumstances, visit DocWealth.io.
The 2017 tax law that introduced QBI also capped state and local tax (SALT) deductions at $10,000, targeting high-income earners like physicians. To counteract this, many states have introduced or proposed a Pass-Through Entity (PTE) Level Tax. If your state offers PTE, you can pay a portion of your state income tax through your LLC and receive a federal deduction.
For Example:
This strategy allows high earners to navigate the SALT deduction cap effectively.
Organizing an LLC and paying yourself as an employee adds complexity but can lead to substantial savings. In the examples above, Dr. Smith could save:
These figures don’t include potential savings from retirement contributions or business deductions. While these examples are simplified and may not apply to your specific situation, the potential benefits are significant.
For personalized advice, consult your CPA or schedule a free 30-minute session with DocWealth.io.
Absolutely! Here’s how. Doctors who work in locum positions possess high levels of specialization because they can work in multiple medical fields through their varied work opportunities. The locum physician industry features specific positions for medical professionals who are OB/GYNs, radiologists, or cardiologists. Locum doctors select full-time roles because they enjoy the flexibility and higher compensation levels as well as the diversity of roles available to them.
ProLocums collaborates with professional-specific providers each day to assist them in their locum physician job search. The specific breakdown of how specialization operates within locum practices can be explored through the following details.
The locum positions extend beyond general practice clinical work. All medical specialties currently experience a growing need for locum workers. The development of medical expertise by doctors leads to positive outcomes for them in this situation. The locum jobs online opportunity exists for both high-risk neurology specialists and emergency medicine practitioners who want to use their expertise.
Top specialties in demand include
High demand exists in locum practice because of workforce deficits alongside rising patient numbers and the requirement for short-term medical staffing solutions, primarily in rural medical areas without sufficient physician presence.
Medical practitioners remain the leading community of locum professionals, but the employment sector continues to expand. Various healthcare occupations currently provide temporary roles with similar working characteristics to locum positions.
The workforce of advanced practice providers incorporates NPs together with PAs who fill positions in different healthcare settings, including primary care, urgent care, and specialties.
Nurses (RNs & LPNs) are in high demand for temporary roles across the country.
The field of locum work includes various allied professionals such as pharmacists, along with physical therapists, lab scientists, and radiologic technologists.
On-demand dental professionals consisting of specialists and dentists have priority placement requirements in specific geographical areas where physician staffing remains challenging.
Healthcare professionals seeking both flexibility in work and meaningful employment will find a good match through locum jobs online.
The practice of locum has evolved into a permanent locum physician job choice for multiple doctors in healthcare fields. More physicians now opt for locum-only practice because they receive the following advantages:
Locum offers physicians complete freedom to determine their working hours along with their locations and work frequency. Similarly, they get higher pay, often better than permanent roles, especially for high-demand specialties. They will experience less burnout due to reduced administrative burden while focusing more on patient care.
Healthcare professionals who choose locum roles have the chance to see different medical systems at urban hospitals and rural clinics. This lifestyle appeals to early-career doctors exploring different settings. Physicians who have stopped working full-time can utilize such opportunities to work as they please. Similarly, they can enjoy adventurous trips, thereby maintaining work-life balance. Specialists choose this path for obtaining elevated salary prospects together with expanded professional variety options.
Locum and specialization complement each other in powerful ways:
1. Precision Matching
The databases and matching systems at locum agencies help identify facilities requiring specialists according to your recorded skills. Your opportunities to work at your full licensing scope will increase when selected through locum services.
2. Filling Critical Gaps
Hospitals depend on locum specialists to handle vacancies, which become especially important in areas where permanent staff cannot be hired easily. The depth of your skills ensures continuous patient treatment remains strong during critical healthcare moments.
3. Expanding Your Experience
Locating your practice in diverse settings allows specialists to encounter multiple healthcare environments, clinical approaches, medical systems, and patient demographics. Early-stage medical practitioners can boost their careers by working as locums, while professionals at any stage can use locum work for clinical refreshment.
Doctors usually select locum because it provides them with control over their personal lives. Doctors who choose locum can accomplish their goals of finding improved work-life balance and career development as well as exploring new opportunities.
ProLocums exists to assist your professional development. The recruiting team at our company connects medical professionals with roles matching their field through high-demand positions. Our company enables all locums to simplify their lifestyle because we provide premier compensation alongside certification aid with flexible positions and travel benefits.
Ready for your adventure era? Contact our ProLocums staff or view current openings through our website. The right opportunity is waiting.
04/17/2025
The time has come for physicians to investigate different opportunities either during medical residency or after multiple years of practice. Locum jobs provide physicians with the opportunity for flexibility, diverse experiences, and better work-life balance, consequently drawing medical professionals to seek these benefits.
The Latin word ‘Locum tenens’ refers to the term "to hold the place of". It describes the temporary physician practice model addressing healthcare facility physician shortages caused by vacancy gaps or staff absenteeism or higher care needs. Each locum care provider employs independent contractor status through staffing agencies such as ProLocums without changing the healthcare facilities for their work.
Through locum positions, medical practitioners can find numerous possibilities that span between different specialties as well as regions and healthcare environments. Through locum physicians gain the flexibility to design their professional journey by pursuing jobs in various geographical areas and work schedules which include both full-time positions elsewhere and part-time jobs in nearby locations or supplemental work along their existing employment. Locum assignments remain available to residents and fellows although permitted and allow them to gain experience alongside additional compensation.
Results between locum roles and permanent roles include unique sets of advantages and difficulties. Flexible employment through locum positions allows doctors to decide their places of work and their working schedules yet permanent roles grant long-term stability through established locum job roles and regular work hours. Expanded mentorship connections along with health care site variety become available through locum roles but permanent positions provide better opportunities for long-term career development within one healthcare organization. The temporary nature of locum positions produces increased pay because healthcare facilities urgently look for staff while permanent employment provides dependable salaries through structured compensation packages.
Staffing agencies handle travel expenses together with housing costs for their locum physicians yet permanent positions sometimes cover moving costs although the commitments often extend several years. Locum assignments provide stretched breaks after assignments but employers must contribute to employee rest periods through their official policies in permanent positions. The main draw of locum work involves minimal administrative tasks that lead to more patient contact but permanent jobs impose organizational obligations which restrict direct patient care.
Your short-term locum positions contracted work offers both exploratory time in new locations and potential continuations that let you assess a new area as a future residency. Permanent positions force individuals to make a long-term job commitment yet this commitment may become troubling if the job situation proves unsuitable. Locum physicians are responsible for securing their own health insurance and retirement plans because permanent employees receive this coverage through their employer. Introducing a new option in healthcare staff solutions because locum staffing agencies deliver malpractice insurance to their workers while permanent roles from various employers might have different malpractice insurance coverage.
The evolution of medicine proves that no career position exists permanently thus your professional development should adjust accordingly. The locum system works excellently as a professional transition solution during various stages of life.
Your initial career stages present uncertainty regarding practice settings so locum position starts as a solution. Experiences in various practice settings will help you develop your career goals.
The extra income generated from locum physician jobs helps healthcare professionals settle their student loans while saving funds for major expenses. The locum physician job model provides exceptional payment packages to its medical professionals.
Locum physician serves as an ideal career transition tool during times of permanent locum job search before starting a new challenge or when life necessitates change. Through locum practice, you maintain clinical work while deciding what lies ahead.
You want to retire partially without complete cessation from work. Through locum physician practice, you can handle medical responsibilities on flexible hours while traveling for patient care duties.
Through locum practice, you acquire the ability to plan your medical career according to your preferences. With ProLocums in place, you can choose flexible career opportunities that span short-term and long-term timescales across many locations in the United States along with professional assistance through each step of the process.
The time has come to start benefitting from working as a locum physician. Existing applicants at ProLocums can launch their medical career path through current job openings.
03/19/2025
When doctors temporarily fill an empty position it is known as locum doctor service. The medical terminology ‘locum tenens’ serves as a ‘placeholder’ description that characterizes this position. Medical practitioners who take locum positions step into doctor roles to fill in assignments beyond primary physician duties. It also enables them to explore various medical setups and meet multiple patient communities while visiting various destinations.
Regardless of your plans to work as a locum, you must prepare first. This checklist provides you with the necessary steps to follow along the path of locum work.
Locum roles operate on short timeframes which grants healthcare professionals the ability to plan their schedules as they wish. The locum lifestyle enables you to decide when to work for several months before taking a rest between assignments. Your desire for work-life balance can be achieved through locum doctor work since the market demands doctors constantly.
Locum professionals have the advantage of traveling thanks to locum assignments. The healthcare needs of the world provide locum physician jobs through their compliant border-crossing procedures. Working in multiple locations can prove to be difficult. Locals must understand that each job needs adaptation to different workgroups and technological systems along with schedule arrangements and payment procedures.
Before committing, conduct thorough research:
After finding locum work matches your objectives you should start seeking open roles. Online job sites particularly target temporary medical physician jobs. Specialized recruitment agencies like ProLocums can match you with medical positions that suit your preferences.
Application & Interview Process:
Execute these steps after you obtain your position to achieve a successful transfer.
A written agreement provides clarity about the job requirements along with employee duties. It should outline:
The arrangement contains important administrative elements about keys as well as parking arrangements and building procedures.
Administrative Preparation:
The preparation process in advance makes the movement smoother.
Before starting locum work you need complete preparation since it's the essential factor for achievement. The medical care provider who follows this checklist will achieve both success and fulfillment during their locum assignment.
The combination of proper preparation along with confidence and adaptability makes you ready to achieve excellence in your new position. For more details, visit www.prolocums.com.
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