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A Locum Tenens Tax Brief: Terminology to Know
The annual tradition of filing a federal, and in some cases state, income tax return isn’t too far off. If you accepted locum tenens jobs any time in the previous year, take a moment now to review some of the common terms and conditions that explain how the career alternative may affect your filings. After all, locum tenens physicians and advanced practice providers are neither employed by a locum tenens agency, such as All Star Healthcare Solutions, nor the hospitals, clinics, private practices, and other healthcare organizations that contract with them to supplement their staffing needs.
NOTE: The following is merely a list of definitions. Consult with a professional specializing in tax return preparation and/or tax law for additional and more specific information.
Directory of Federal Tax Return Preparers
This is a national database of tax professionals who have a Preparer Tax Identification Number and hold a professional credential or obtained an Annual Filing Season Program Record of Completion from the Internal Revenue Service (IRS). The directory is available to the public.
Form 1099-MISC
Form 1099-MISC is issued by any company that pays income for work performed as an independent contractor, according to the IRS. It confirms total income earned by the individual within a calendar year.
Form W-9
Locum tenens providers submit this IRS form to staffing agencies to confirm Taxpayer Identification or Social Security numbers.
Independent Contractor
Per the IRS, “People such as doctors, dentists, veterinarians … who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.” Another way to say it is locum tenens providers are self-employed while on assignment because they accept temporary positions and are not employees of the facility or the staffing company.
Per Diem Rules
From a tax point of view, personal daily expenses incurred while away from home practicing as a locum tenens provider may be classified as per diem. It’s important to note these costs are not reimbursed by staffing agencies.
Quarterly Estimated Taxes
Employers withhold federal, state, and other taxes, such as Social Security, from each paycheck. As a locum tenens provider, you are responsible for taxes on income earned from temporary assignments through quarterly estimated tax payments: April, June, September, and January the following year. Seek the advice of a tax expert to calculate amounts.
Schedule C
This IRS form lists net income (and/or loss) by tallying deductions, including any related to locum tenens jobs. Confer with your tax preparer for rules and regulations.
Self-Employment Tax
Basically, this term applies to the taxes independent contractors contribute to Medicare and Social Security.
State Income Tax
Not all states collect taxes on income. However, if you worked locum tenens assignments in a state that does tax earnings, then you must comply with its regulations. Discuss state specifics with your tax preparer.
EXPERT KNOWLEDGE
Whether this will be your first time filing as a locum tenens provider or you only occasionally accept temporary contracts, or locums supplies your primary source of income, being in the know about tax terms can be a cost-saving strategy. Consult with your tax specialist early on so you are armed with the most current and accurate information on tax regulations and laws.
Want to add locum tenens to your professional repertoire? Call All Star Healthcare Solutions today at 800-928-0229, or contact us online.
