State of Locums market

[Status Sciaticus]

anyone got reccs on CPAs? Looking to do W-2 + 1099 locums in 2024, plus would like someone who can help set up all these 401ks, cash benefits or defined benefits plans, and make use of all the available deductions that is mentioned in this thread.

Came across Fox wealth management, but dont know too much about them.

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[private practice warrior]

You could do S corp, C corp, or LLC. Probably save about 50K/yr if you are in a state with high state taxes. Need to have a good CPA and then set up corp that best fits where you live and how much work you want to put into the corp as you have another business that has finances to take care of.

 

[aneftp]

I'm anticipating about 500k in locums / 1099 pay for next year. Someone told me I should set up an S corp to get more tax benefits. Can someone explain

It really depends how much real w2 income u have
In my case. I have 450-500k w2 real income from my real job

If I make 200k more in 1099 income. In my state. I think I’m better off as single member LLC (treated as sol proprietor). I don’t see many advantages of electing s corp when I have w2 income.

I have just file as single member LLC (schedule C). Write off expenses. Plus put more money into my sep (20% of net)

If I paid myself from s corp. say 40k (of the 200k 1099). I’d be incurring more payroll taxes.

For ME. I don’t see any advantage of doing s corp with 450-500k w2 income already

I guess I can do a define benefits plan. Put another 75-100k into the plan


But I’m already putting plus employer contribution of 100k from my w2 job already. 401a/403b/457b plus match.

How much money do I really want to put away ?? That I can’t touch for 10 plus years?

 

[aneftp]

anyone got reccs on CPAs? Looking to do W-2 + 1099 locums in 2024, plus would like someone who can help set up all these 401ks, cash benefits or defined benefits plans, and make use of all the available deductions that is mentioned in this thread.

Came across Fox wealth management, but dont know too much about them.

How much does ur regular w2 allow u to deduct? Envison only allows 22500 ($30k) deduction?

If u work for the state u get to deduct more more.

That determines what u want to do with cash benefits plan

I just find it easier with sep ira for the 1099 gig. Less accounting and less paperwork. But that’s because I already put away a ton (70k plus ) into my w2 job already.

If I were purely 1099. I’d re elect s corp status for my LLC. But I’m not.

 

[Status Sciaticus]

How much does ur regular w2 allow u to deduct? Envison only allows 22500 ($30k) deduction?

If u work for the state u get to deduct more more.

That determines what u want to do with cash benefits plan

I just find it easier with sep ira for the 1099 gig. Less accounting and less paperwork. But that’s because I already put away a ton (70k plus ) into my w2 job already.

If I were purely 1099. I’d re elect s corp status for my LLC. But I’m not.

last job i was at allowed max 66k.
currently in fellowship but contributing zero since im maxed out in my regular 401k.
Solo401k 20k since my 1099 was 100k prior to starting fellowship.
Likely ill go back to PP anesthesia vs. HOPD if i can find a good gig so I expect to go back to W-2 with max contribution and keep 1099 locums on the side.
If I go full 1099 locums, I may go the S-Corp route.

 

[narcotics999]

You could do S corp, C corp, or LLC. Probably save about 50K/yr if you are in a state with high state taxes. Need to have a good CPA and then set up corp that best fits where you live and how much work you want to put into the corp as you have another business that has finances to take care of.

Anyone use pte tax benefit to circumvent salt cap? A lot of blue states (mean high state tax) allow it.

 

[narcotics999]

I'm anticipating about 500k in locums / 1099 pay for next year. Someone told me I should set up an S corp to get more tax benefits. Can someone explain

Technically business cost can be expensed in both s Corp or schedule c of solo proprietorship.

The biggest difference is that you don’t need to pay 2.9% Medicare tax on pass through income. Depending on states, you may get pte credit.

Some states charge franchise tax on pass through income. 1.5% for ca and IL.

If you have another w2 income, you may need to pay extra employer social security tax as s Corp is your 2nd employer.

 

[aneftp]

last job i was at allowed max 66k.
currently in fellowship but contributing zero since im maxed out in my regular 401k.
Solo401k 20k since my 1099 was 100k prior to starting fellowship.
Likely ill go back to PP anesthesia vs. HOPD if i can find a good gig so I expect to go back to W-2 with max contribution and keep 1099 locums on the side.
If I go full 1099 locums, I may go the S-Corp route.

Doing a good job saving.

Time to diversify if you want to expand

I’m at a different stage. I just work extra cause I spend a lot on vacation. Plus kids getting more expensive as well. The kids suck u dry as many who have kids know.

 

[Status Sciaticus]

Doing a good job saving.

Time to diversify if you want to expand

I’m at a different stage. I just work extra cause I spend a lot on vacation. Plus kids getting more expensive as well. The kids suck u dry as many who have kids know.

Open to hearing on how to do this. Tried to PM you but no option to do so.

 

[abolt18]

How much does ur regular w2 allow u to deduct? Envison only allows 22500 ($30k) deduction?

If u work for the state u get to deduct more more.

That determines what u want to do with cash benefits plan

I just find it easier with sep ira for the 1099 gig. Less accounting and less paperwork. But that’s because I already put away a ton (70k plus ) into my w2 job already.

If I were purely 1099. I’d re elect s corp status for my LLC. But I’m not.

Why not solo 401k instead of SEP IRA? Same contribution limits and then you can do the backdoor Roth IRA without any pro rata restrictions.

 

[abolt18]

Open to hearing on how to do this. Tried to PM you but no option to do so.

What fellowship are you doing?

 

[aneftp]

Why not solo 401k instead of SEP IRA? Same contribution limits and then you can do the backdoor Roth IRA without any pro rata restrictions.

More paperwork with solo 401k. Filing 5500 forums with acccounts over 250k. Remembering to file partial short year if u shut down ur s corp.

Like I said. If I were full time 1099. I would do it. But I don’t anticipate me leaving my cushy w2 daytime job.

I’m already putting 30k into Roth 401/403b. Only so much I can do. Or so much I want to do.

 

[addoncase]

Anyone have recs for good CPA’s that focus on physicians ?

 

[BLADEMDA]

Why not solo 401k instead of SEP IRA? Same contribution limits and then you can do the backdoor Roth IRA without any pro rata restrictions.

Solo 401K is best for pure 1099 providers who don't have W-2 employment

SEP IRA is best for providers who work locums or side job as a 1099 but who have W-2 employment as well exceeding around $200K.

 

[aneftp]

Solo 401K is best for pure 1099 providers who don't have W-2 employment

SEP IRA is best for providers who work locums or side job as a 1099 but who have W-2 employment as well exceeding around $200K.

And to add. Define benefits plan is best for those generating a crap load in excess of 1 million who want to shield 200k pretax away

It’s too bad Obama and the Dems shut down the 412 self employed plans in 2011. My friend has a 412 he self funded with 3 million paying him 25k a month for life since age 57 with Omaha of Nebraska.

The dems always shutting down tax havens (Obama shut down the taking social security early at age 62 and if u repay it back in full age 67). U get the step up age 67 social security monthly benefits. It’s like best of both worlds taking social early and getting the money and if u live to age 67. Getting more

 

[Guillemot]

I use Fox CPA. Expensive, but competent and responsive. Vetted by WCI.

anyone got reccs on CPAs? Looking to do W-2 + 1099 locums in 2024, plus would like someone who can help set up all these 401ks, cash benefits or defined benefits plans, and make use of all the available deductions that is mentioned in this thread.

Came across Fox wealth management, but dont know too much about them.

 

[Status Sciaticus]

What fellowship are you doing?

Pain

Solo 401K is best for pure 1099 providers who don't have W-2 employment

SEP IRA is best for providers who work locums or side job as a 1099 but who have W-2 employment as well exceeding around $200K.

Can you elaborate on why this is so?

 

[BLADEMDA]

Pain

Can you elaborate on why this is so?

Solo 401(k) vs. SEP IRA

The solo 401(k) and SEP IRA are two different types of tax-advantaged retirement savings plans for the self-employed and small-business owners.

www.businessinsider.com

W-2 employed anesthesiologists already have access to a 401K plan most of the time. This means they can max out their 401k with their W-2 job then contribute toa SEP IRA with their side gig. SEP iRA is simple to open, no fees and no requirement to make a contribution. The IRS does not allow you to exceed the maximum allowed personal contributions per year regardless of how many 401K plans you have access to. This means the business contribution is all you need from your side gig as a 1099.

 

[BLADEMDA]

 

[BLADEMDA]

 

[Shimmy8]

Solo 401(k) vs. SEP IRA

The solo 401(k) and SEP IRA are two different types of tax-advantaged retirement savings plans for the self-employed and small-business owners.

www.businessinsider.com

W-2 employed anesthesiologists already have access to a 401K plan most of the time. This means they can max out their 401k with their W-2 job then contribute toa SEP IRA with their side gig. SEP iRA is simple to open, no fees and no requirement to make a contribution. The IRS does not allow you to exceed the maximum allowed personal contributions per year regardless of how many 401K plans you have access to. This means the business contribution is all you need from your side gig as a 1099.

But if your company already maxes out to the $66k per year with your contribution then no ability to do this at all, correct?

 

[Arch Guillotti]

It’s too bad Obama and the Dems shut down the 412 self employed plans in 2011.

This is not true at all. Provide a source and I will believe your “fake news”

 

[ERRES2288]

Can you have cash balance plan as sole proprietor ?

 

[thinkorswim]

I hope all you homeowners who are balling out in the 1099 locums market are taking full advantage of the Augusta Rule for your annual corporate wellness retreats. A surgeon I was working with told me he does this to the tune of $30k each year for his consulting side gig.

Council Post: How Business Owners Can Use The Augusta Rule Tax Strategy

The first step in implementing this tax strategy is to know the rules.

www.forbes.com

(And cue the outrage from our resident tax sticklers)

 

[aneftp]

This is not true at all. Provide a source and I will believe your “fake news”

“The new law closes loopholes that allowed some married couples to receive higher benefits than intended. Only a small fraction of retirees used these loopholes. Closing them helps restore fairness and strengthens Social Security’s long-term financing.”

This is from official social security website. No fake news. Look at the date of article. March 2016

https://blog.ssa.gov/what-you-need-to-know-about-the-new-laws-for-claiming-retirement-benefits/#:~:text=The%20new%20law%20closes%20loopholes,Social%20Security's%20long%2Dterm%20financing.


Who was president? Urs truly. Barack Obama.

Just like how Joey Biden telling dept of education to forgive student loans in fall of 2022 even religious hospitals. Presidents direct agencies to make these decisions folks. That’s been discuss on these forums already so no need to link it.

My microphone has just dropped and I left the conversations folks.

The truth just simply hurts when I state facts.

By the way. I’m not a true republican I believe in weed. Legal prostitution. I’m anti death penalty. And my favorite president is Bill Clinton. In anti gun. But I support us constitution so it’s the second amendment and I will respect it. If they repealed it. I would be happy since it would be in the constitution

What I like is to keep my hard paying money and not waste it on federal and state spending.

 

[private practice warrior]

Anyone have recs for good CPA’s that focus on physicians ?

Find a CPA that takes care of a lot of high earning folks and they should know how to deal with whatever situation you set up. Ask docs you work with for recommendations or if you set up a corp whatever lawyer you use should be able to refer you to good CPA’s.

 

[Status Sciaticus]

Solo 401(k) vs. SEP IRA

The solo 401(k) and SEP IRA are two different types of tax-advantaged retirement savings plans for the self-employed and small-business owners.

www.businessinsider.com

W-2 employed anesthesiologists already have access to a 401K plan most of the time. This means they can max out their 401k with their W-2 job then contribute toa SEP IRA with their side gig. SEP iRA is simple to open, no fees and no requirement to make a contribution. The IRS does not allow you to exceed the maximum allowed personal contributions per year regardless of how many 401K plans you have access to. This means the business contribution is all you need from your side gig as a 1099.

From what I recall, a solo401k also doesnt require fees, and is relatively simple to open, and contribution isnt required. Correct me if I am wrong here.

 

[Arch Guillotti]

“The new law closes loopholes that allowed some married couples to receive higher benefits than intended. Only a small fraction of retirees used these loopholes. Closing them helps restore fairness and strengthens Social Security’s long-term financing.”

This is from official social security website. No fake news. Look at the date of article. March 2016

https://blog.ssa.gov/what-you-need-to-know-about-the-new-laws-for-claiming-retirement-benefits/#:~:text=The%20new%20law%20closes%20loopholes,Social%20Security's%20long%2Dterm%20financing.


Who was president? Urs truly. Barack Obama.

lol this says nothing about 412 plans and there are ads for them all over the internet

 

[chessknt]

I hope all you homeowners who are balling out in the 1099 locums market are taking full advantage of the Augusta Rule for your annual corporate wellness retreats. A surgeon I was working with told me he does this to the tune of $30k each year for his consulting side gig.

Council Post: How Business Owners Can Use The Augusta Rule Tax Strategy

The first step in implementing this tax strategy is to know the rules.

www.forbes.com

(And cue the outrage from our resident tax sticklers)

The surgeon rents out his home for $2100/day (or more) and that is a 'market rate' that would be supported by an audit? I assume he has a 8 figure+ value home then?

 

[aneftp]

From what I recall, a solo401k also doesnt require fees, and is relatively simple to open, and contribution isnt required. Correct me if I am wrong here.

Both are pretty easy to setup. It’s the paperwork paper trail with the solo 401k that’s a little more tedious.

I had solo 401k also when I was full time 1099. Paid non working spouse 20k on my payroll annual w2 income. Put 25k a year into ur solo 401k (with me as the partner 401k LLC company)

The surgeon rents out his home for $2100/day (or more) and that is a 'market rate' that would be supported by an audit? I assume he has a 8 figure+ value home then?

many people I know IN AUGUSTA GA. They rent out their homes to delta airlines corp. Mercedes etc for a whopping 30k a week. “Doctors homes”. Tax free. Due to the …Augusta rule. Basically pays their entire mortgage for the year. Augusta Ga homes are still relatively cheap (compared to rest of the country). Even river homes.

10k is the bare minimum these days for the masters golf tournament. It’s huge business there.

 

[chessknt]

Both are pretty easy to setup. It’s the paperwork paper trail with the solo 401k that’s a little more tedious.

I had solo 401k also when I was full time 1099. Paid non working spouse 20k on my payroll annual w2 income. Put 25k a year into ur solo 401k (with me as the partner 401k LLC company)

many people I know IN AUGUSTA GA. They rent out their homes to delta airlines corp. Mercedes etc for a whopping 30k a week. “Doctors homes”. Tax free. Due to the …Augusta rule. Basically pays their entire mortgage for the year. Augusta Ga homes are still relatively cheap (compared to rest of the country). Even river homes.

10k is the bare minimum these days for the masters golf tournament. It’s huge business there.

That article references renting your home to your business for 2 weeks for an imaginary retreat, not to an external entity in a high value location for a special time of the year.

 

[thinkorswim]

The surgeon rents out his home for $2100/day (or more) and that is a 'market rate' that would be supported by an audit? I assume he has a 8 figure+ value home then?

A 4-5 bedroom near the ocean can fetch much more than that per night during peak travel seasons. So yes, it’s likely to hold up in an audit. All you need to do is save an Airbnb search result on your desired dates.

 

[Simba1711]

I prefer a solo 401k. Easier to do a backdoor Roth. When you backdoor you can’t have any money in other iras like a Sep ira for tax implications.

 

[aneftp]

That article references renting your home to your business for 2 weeks for an imaginary retreat, not to an external entity in a high value location for a special time of the year.

Yes. I’m very well aware of Augusta 14 day rule.

 

[BLADEMDA]

Can you have cash balance plan as sole proprietor ?

Yes

 

[triggermaster]

That article references renting your home to your business for 2 weeks for an imaginary retreat, not to an external entity in a high value location for a special time of the year.

Exactly. Having your extended family come stay with you and pretending to charge your ‘company’ rent is nothing like preparing your house and leaving it so strangers can rent it out.

 

[BLADEMDA]

From what I recall, a solo401k also doesnt require fees, and is relatively simple to open, and contribution isnt required. Correct me if I am wrong here.

If you are maxing out your 401k with your W`2 job then there is no need for a solo 401k with your side gig. Only your side business can contribute to your solo 401k or your sep Ira. The contributions will be identical. FYI, when I had no W 2 jobs I used a solo 401k. When I had a side gig I used a sep Ira. each year I would decide which I wanted to use as I had both available to my company. You can have Botha sep Ira and a solo 401k but each year you can only contribute to one or the other.

 

[BLADEMDA]

I prefer a solo 401k. Easier to do a backdoor Roth. When you backdoor you can’t have any money in other iras like a Sep ira for tax implications.

You are correct about the solo 401k for a back door Roth. FYI, a sep Ira can be rolled over into most solo 401ks. So, if you skipped the roth IRA for a year due to the sep Ira you can still contribute to it later on by consolidating your iras into your solo 401K. My business has a solo 401K and a Sep IRA. For those who plan on doing a back door Roth IRA each year a solo 401k is the better choice.

 

[Coffee PRN]

If you are maxing out your 401k with your W`2 job then there is no need for a solo 401k with your side gig. Only your side business can contribute to your solo 401k or your sep Ira. The contributions will be identical. FYI, when I had no W 2 jobs I used a solo 401k. When I had a side gig I used a sep Ira. each year I would decide which I wanted to use as I had both available to my company. You can have Botha sep Ira and a solo 401k but each year you can only contribute to one or the other.

SEP and soloK contribution limits may differ depending on how much 1099 income one is pulling

 

[Status Sciaticus]

If you are maxing out your 401k with your W`2 job then there is no need for a solo 401k with your side gig. Only your side business can contribute to your solo 401k or your sep Ira. The contributions will be identical. FYI, when I had no W 2 jobs I used a solo 401k. When I had a side gig I used a sep Ira. each year I would decide which I wanted to use as I had both available to my company. You can have Botha sep Ira and a solo 401k but each year you can only contribute to one or the other.

why would there be no need for a solo 401k with my side 1099 locums? I can still contribute 20% of my income through the employer side contribution. Unless I am missing something here.

 

[aneftp]

why would there be no need for a solo 401k with my side 1099 locums? I can still contribute 20% of my income through the employer side contribution. Unless I am missing something here.

The difference is a mere 5% in contribution. Solo 401k allows 25% employer contribution. The sep allows 20% employer contributions.

Seeing that if u already max out ur regular employee side $22500/30000 at ur regular job. You can’t put any more money in on the solo 401k (employee side). That leaves u with 25% employer side of whatever income you give yourself up to the 415c limit. So if I only paid myself say 40k w2 on the side gig s corp. 25% is 10k. Vs 8k on the sep employer contribution. A mere 2k difference.

But also paying myself payroll on s corp 40k. I’m also having to pay into payroll taxes as well. So it doesn’t make too much sense payroll taxes plus accounting fees to do s corp work side gig. And I stick with LLC (sole proprietor) when I don’t make a lot and have most of my income at my regular w2 job.

Understand?

 

[BLADEMDA]

why would there be no need for a solo 401k with my side 1099 locums? I can still contribute 20% of my income through the employer side contribution. Unless I am missing something here.

There is nothing "wrong" with a solo 401K. I have one for my LLC and used it in the past. I am simply stating that for convenience sake and IRS reporting the SEP IRA is slightly better (IMHO) for those with side gigs (1099) and regular W-2 employment (main gig). The reporting requirements are less and IMHO, the chances for an audit are less as well. Now, if you are doing a back door Roth IRA plus employer contributions, the Solo 401K is clearly superior. Again, you are allowed by law to have both of these retirement plans but can only contribute to one each year (side gig). If your main gig is a 1099 then go with the solo 401K.

 

[aneftp]

By the way. The full time w2 docs from AMC employees game the system as well. They will have the locums docs do the 7-3/5pm scut work. As well as many weekends.

Than the full time guys take the extra night calls for extra pay as well as extra weekends.

So it’s a symbiotic relationship between locums and full time staf. As Oprah said one time in her show. You win. Every one wins! Locums docs win. Full time docs win!

This one full time doc is hitting 675k w2 which isn’t bad for working for amc. And he’s has 13 weeks of vacation. His base is only $475k w2. Some may say well w2 gets taxed more. So better off not to do extra work as w2? But there is another way to think of this. You as w2 full time doc for amc get to work at ur home base where everyone knows you. It’s the familiarity that may be worth it even if u are paying 37% money on that extra pay.

Know the game folks.

 

[sevo00]

By the way. The full time w2 docs from AMC employees game the system as well. They will have the locums docs do the 7-3/5pm scut work. As well as many weekends.

Than the full time guys take the extra night calls for extra pay as well as extra weekends.

So it’s a symbiotic relationship between locums and full time staf. As Oprah said one time in her show. You win. Every one wins! Locums docs win. Full time docs win!

This one full time doc is hitting 675k w2 which isn’t bad for working for amc. And he’s has 13 weeks of vacation. His base is only $475k w2. Some may say well w2 gets taxed more. So better off not to do extra work as w2? But there is another way to think of this. You as w2 full time doc for amc get to work at ur home base where everyone knows you. It’s the familiarity that may be worth it even if u are paying 37% money on that extra pay.

Know the game folks.

Suffice to say don’t hate the player hate the game?

 

[Coffee PRN]

Suffice to say don’t hate the player hate the game?

Right now I'm lovin the game.

 

[RB0680]

I am new to the Locums world. I wanted to see what is the best comparison of W2 vs 1099. How can I compare the two incomes on hourly and annual basis? I’m debating if I should take a W2 job because 1099 work in my area cap at $1600/day. Thanks for the advice!

 

[aneftp]

I am new to the Locums world. I wanted to see what is the best comparison of W2 vs 1099. How can I compare the two incomes on hourly and annual basis? I’m debating if I should take a W2 job because 1099 work in my area cap at $1600/day. Thanks for the advice!

Comparisons are difficult depending on someone situation.

If you are married (like me) with 2 kids and non working spouse.

35% tax bracket kicks in at around 460k agi for married.

35% tax bracket kicks in at around 225k for single/head of household

So if u are single. W2 means you pay 20k more in federal taxes for same 500k ish w2 income (agi is after deductions).

So the question is
1. Are you single?
2. If you are married, does ur spouse have access to good healthcare (20k value if ur spouse is a teacher with good state employee insurance)


Those are the two most important questions you need to answer before we can quantify 1099 vs w2 FOR YOU.

answer that. And I can proceed to tell you what works in your favor

As for me. My state job is pretty good. 450k with lots of pretax deductions and benefits as w2. A comparable job would need to net me close to 550k 1099 no calls or weekends and 11 weeks off and 40 hours a week.

So my comparison means I would need to find a 1099 job that can consistently provide me 7-3/5 pm job at around $330-350/hr 1099. The key word being consistently. And I find it really hard to find a job like that 1099.

Of note. I do have side gigs 1099 to supplement my w2 income.

So let us know ur sit situation and we can give u better advice and also depends how much you want to work.

 

[Anesthesia_Guy]

I am new to the Locums world. I wanted to see what is the best comparison of W2 vs 1099. How can I compare the two incomes on hourly and annual basis? I’m debating if I should take a W2 job because 1099 work in my area cap at $1600/day. Thanks for the advice!

Insanely low.

 

[Simba1711]

Yes that is on lower end. We pay our per diems 2000 a day from 7-3. Ambulatory cases and no supervision. 1099 in very high cost of living area.

 

[kidthor]

Insanely low.

Yeah that is way too low for 1099 work. $160ish an hour before taxes and benefits and all that!? No way...