Advice From Independent Contractors?

  1. Hello all,

    I was hoping for some advice on independent contracting and tax benefits. I currently work as an employee for a group and don't get any benfits outside of retirement and malpractice. I am also going to independent contract 2-4 days per month. Does anyone know if I can still take advantage of tax write-offs from independent contracting (such as paying for my own health insurance) if I'm still working as an employee for another group? Hope this makes sense.
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  2. 7 Comments

  3. by   xkred27
    Being an employee (w-2) should not effect the write-offs that you do while working as an independent contractor/sole proprietor (1099). I think that you should be able to write off the expense of your health insurance as well as other expense like home office, cell phone, internet access, meals, milage, uniforms, etc. If you are planning on contracting on a permenant basis you should think about forming a corporation. That way you can avoid paying a large amount of the self-employment taxes and also write-off the depreciation of a vehicle. Try to find a good CPA in your area that knows a lot about small business tax.

    Bill
  4. by   suzanne4
    It would be much to your benefit to incorporate right from the beginning.
    There have many legal cases involving independent contracting as an RN.
    Per one of the big cases that came out of federal court in Washington DC a few years ago was that the nurse needed to be incorporated to be able to function as an IC, or be set up as a LLC. You won't be able to "get away" with it as a sole proprietor. You are just looking for trouble. It is extremely easy to incorporate and can be done in most states in just a day or two. And you can do it on your own, without the lawyer fees. And you want to go for the "S" corporation so that you don't pay a separate corporate tax on.

    Hope that this helps...................
  5. by   gugal
    Thanks so much for the advice...I wasn't sure about becoming incororated but had thought about it once I read about legal issues (eg, IRS definition of an employee vs independent contractor)--but one CRNA I worked with did some independent contracting and had advised me that it wasn't worth the time and expense to become incorporated. I didn't know it was possible to pursue this without having huge legal fees involved. And, being new to this, any advice on how to find a good CPA? I've never used one before.

    Quote from suzanne4
    It would be much to your benefit to incorporate right from the beginning.
    There have many legal cases involving independent contracting as an RN.
    Per one of the big cases that came out of federal court in Washington DC a few years ago was that the nurse needed to be incorporated to be able to function as an IC, or be set up as a LLC. You won't be able to "get away" with it as a sole proprietor. You are just looking for trouble. It is extremely easy to incorporate and can be done in most states in just a day or two. And you can do it on your own, without the lawyer fees. And you want to go for the "S" corporation so that you don't pay a separate corporate tax on.

    Hope that this helps...................
  6. by   xkred27
    Where do you live? I know of a great CPA in the Portland OR area. PM me if you are interested.
  7. by   suzanne4
    Quote from gugal
    Thanks so much for the advice...I wasn't sure about becoming incororated but had thought about it once I read about legal issues (eg, IRS definition of an employee vs independent contractor)--but one CRNA I worked with did some independent contracting and had advised me that it wasn't worth the time and expense to become incorporated. I didn't know it was possible to pursue this without having huge legal fees involved. And, being new to this, any advice on how to find a good CPA? I've never used one before.
    It depends on which state that you live in. Costs are are actually just a hundred or two hundred dollars to incorporate, for the actual filing of the paperwork with your Corporation Commission. Hope that this helps...........
  8. by   loisane
    Quote from gugal
    Thanks so much for the advice...I wasn't sure about becoming incororated but had thought about it once ...
    Gugal,

    You might want to check out www.anesthesiabiz.com

    I haven't used the service myself, but I know the gal who set it up. She has been a CRNA for awhile, but previously had business background. She has been doing locum/independent contractor for awhile, and saw a need to share the how-to's she had learned. From what I understand, there is a fee for some of the service, but there is also some free information on the site. And it is specific to CRNA practice, which is an advantage, I think.

    loisane crna
  9. by   u-r-sleeepy
    Hello,

    I would advise you to incorporate - most likely as an S-Corp for your outside work. I would also advise you to find a good (read: SHREWD!) CPA for your tax related needs. You could learn it all yourself, but it will take you a long time to come up to speed on these matters. You can get help easy enough without spending a lot of money on their professional expertise. If you need a personal reference - I'll leave it at the bottom.

    I would also encourage you to pick up one - two - or all three of these books from Nolo Press (written by Attorneys - for the rest of us!):

    1 - Working for Yourself: Law and Taxes for Independent Contractors, Freelancers and Consultants (Working for Yourself, 4th Ed)
    by Stephen Fishman ISBN: 0873378547. ~ $25 @ Amazon. PLEASE - buy this one for sure!

    2 - Tax Savvy for Small Business: Year-Round Tax Strategies to Save You Money (TAX SAVVY FOR SMALL BUSINESS)
    by Frederick W. Daily ISBN: 0873379721 - again, about $25.

    3 - Incorporate Your Business: A 50-State Legal Guide to Forming a Corporation (Incorporate Your Business, 2nd Ed)
    by Anthony Mancuso ISBN: 0873379942. about $35 @ amazon. This is if you want to "do it yourself" incorporation.

    Or, you can visit your local library and they may carry some/all of these.

    The tax advantages can be huge depending on how your structure things and your personal needs/goals.

    Sleeepy

    PS The CPA I would recommend is Glen Hughes, CPA, 615-868-2953 consulting office; www.glenhughescpa.com & glen@glenhughescpa.com. He also just happens to be a "great guy"! I receive NOTHING for recommending him - just a satisfied client.

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