Could a FNP hired as an independent contractor in private physician clinic?

zmansc, ASN, RN · Aug 5, 2014

Could? Yes, certainly could. However, there are legal and tax ramifications to it that you and he should know in more detail. I would strongly suggest you consult at minimum a tax accountant and possibly an employment lawyer to help you and your employer navigate this decision.

member95054 · Aug 5, 2014

Thanks zmansc

I do ask an accountant and he said it is a gray area. The best way is to form a business and bill my employer.

However, I don't want to go that route due to the tax complexity.

Since I don't have any benefit except two weeks personal time off, I prefer contractor option since I can use self-employed retirement account to save tax. I need to show my future boss that there are many contractor positions in the private physician clinic setting. Thank you for your comment.

SunnyNP · Aug 5, 2014

It is grey area. I've done it both ways as a travel NP doing Locums work. Keep all your receipts and document your expenses for 1099. Good luck!

member95054 · Aug 6, 2014

The greatest benefit is self-employed retirement benefit. Additional to normal $17500, you can put up to additional 20% your net income to your retirement account. So you save a lot of tax. However, based on IRS guidelines, one of the criteria is work time and place. If you work at fix location (such as a clinic) and work from M-F, 8am-5pm (required by your employer), then you are likely classified as an W2 employee.

However, one strange thing is that so many contractor positions at private clinic which requires fix time and location of work. Why they can offer contractor in private physician clinic? That is where I need your help. I would like to know what is your practice seeting. (if you are a contractor) Thank you very much!!

SunnyNP · Aug 6, 2014

The hours listed on the "employment agreement" are productive patient care hours. Example I see patients at 123 Main Street Monday, Wednesday, Friday 8-5. Compensated at 24 hours a week. Tuesday and Thursday I am still working from my home office, dedicated solely for that use. I use a laptop on a remote server to clock in and perform administrative work. Many businesses consider telecommuting/work from home into the position description.

Atl-Murse · Aug 6, 2014

You want to be W2 especially if the pay stays the same. This is why

1. You lose the 6.2 % employer SS contribution = 6.2% pay cut

2. You may have to pay maybe thousands of dollars to accountants, malpractice insurance

3. Hundred of hours to comply with million of business rules. Spend those hours making money and let your employer deal with regs/headache.

4. In most cases you can still get the same tax deductions W2 or 1099

5. You are getting free advice from a random guy online next time you may have to pay. good luck

member95054 · Aug 9, 2014

I agree you need to pay roughly 7.6% tax more in contractor position. However, you can save fed and cal tax on $175000 and 20% of your net income if you set up self-employed retirement account. Assume your pay is 100k, after every deduction, your net income is $60k. Then you can save $17500+$12000=$29500 into your retirement account. Assume your highest tax rate is 40%, then you can save close to 12k. It is retirement account saving alone. Plus some business expenses. So for me unless W2 employment provides some benefits, contractor employment is more favored.