Unlike traditional employees, Locum Tenens workers are considered independent contractors. This employment status has certain implications when it comes to filing a tax return.

According to the guidelines laid out by the IRS, Locum Tenens workers are independent contractors. This means that they are self-employed and not an employee of any particular medical facility they may work at throughout the year. This status is of particular importance when it comes to filing a tax return.

Record Keeping, Forms, and Other Tax Implications

Locum Tenens physicians must report quarterly to the IRS their estimated, not actual, earnings.  They will not receive a W-2 form from any facility they worked at, instead they will received a 1099, which details the amount paid to them throughout the year. They will receive a 1099 from each separate medical provider they performed services for. Because of this, Locum Tenens physicians may want to maintain their own accounting books on a monthly basis. User-friendly accounting software, such as QuickBooks, will help these workers keep track of all of their financial dealings.  Please note that it is essential that Locum Tenens physicians contact an accountant who is qualified to prepare taxes in each location they performed services in.

Independent contractors may also be required to file quarterly estimated tax payments to each state they worked in. Some states, such as Florida, do not have an income tax, however, even if a physician doesn’t work in a state that has income tax, he or she will still need to pay estimated quarterly tax payments to the IRS. Be sure to consult an accountant who is familiar with the tax implications in each state you have worked in.

Potential Deductions and Other Income

Independent contractors can deduct certain business expenses from their income.  This will reduce the amount of tax they may owe at the end of the year, if anything. Common deductions may include vehicle mileage, business meals/entertainment, postage, uniform expenses, accounting expenses, etc. If any expenses, such as housing, are provided by the healthcare organization, this may be considered income, and will have to be listed as such on a tax return.

This article is meant to be a guide to Locum Tenens workers and is not meant to provide tax advice, please consult with a qualified certified public accountant. For any other questions, please contact Medstaff National Medical Staffing.