1099 vs W2 question per diem income

Hello all,
Was hoping someone could shed some light on my situation.

I did some per diem shifts (ICU) last month at a local hospital during the COVID crisis and am now finished with my assignment

If I have the option to ask for 1099 for my recently established S Corp vs W2 (no benefits offered from the temporarty assignment), are there any recommendations on how much is recommended to pay myself as an employee of my corp and what tax write offs would be eligible to minimize my taxable income?

Thanks for any insight
 

LookForZebras

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How much you should pay yourself as an employer for your S corp depends on how much you expect to make through the business for the full year. If you expect to make $250,000, for example, a salary of $100,000 might be reasonable. But if you only plan to make $100,000, a salary of $100,000 would be far too much. (Please note that these numbers are just examples, I can't recommend a specific salary for your own situation.)

In terms of tax write-offs, pretty much any expenses that you incur to run your small business are eligible. So, marketing, supplies, travel expenses, etc. For work in an ICU, this might include costs of medical licensing, CMEs, medical equipment that you purchase, such as stethoscope.
 
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How much you should pay yourself as an employer for your S corp depends on how much you expect to make through the business for the full year. If you expect to make $250,000, for example, a salary of $100,000 might be reasonable. But if you only plan to make $100,000, a salary of $100,000 would be far too much. (Please note that these numbers are just examples, I can't recommend a specific salary for your own situation.)

In terms of tax write-offs, pretty much any expenses that you incur to run your small business are eligible. So, marketing, supplies, travel expenses, etc. For work in an ICU, this might include costs of medical licensing, CMEs, medical equipment that you purchase, such as stethoscope.
Thanks so much for the kind reply and information. The job is sporadic and due to covid, I'm not sure if I can expect much for the year as I'm currently not working. I figure there would be little benefit to ask them to pay me w2 for that one time gig where I did about 10 days of shift work. 1099 at least would give me some flexibility in terms of how I am taxed. Any benefit to asking them to pay me w2?

thx
 
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LookForZebras

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Thanks so much for the kind reply and information. The job is sporadic and due to covid, I'm not sure if I can expect much for the year as I'm currently not working. I figure there would be little benefit to ask them to pay me w2 for that one time gig where I did about 10 days of shift work. 1099 at least would give me some flexibility in terms of how I am taxed. Any benefit to asking them to pay me w2?

thx

For sporadic work, I agree with you there's probably little benefit to the W2 work assuming they'd offer you good compensation for both. Being an employee can have its benefits for long-term work, especially in terms of employee protections. But your livelihood doesn't depend on this job, so that aspect doesn't really matter.
 

The PA Investor

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I think LookForZebra said it best. This is a great way to write off a lot of expenses that you incurred. I do have to add just one thing. Traveling to and from your actual work location are not business expenses. It's just commuting but relocating to the area is.
 

ThoracicGuy

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Thanks so much for the kind reply and information. The job is sporadic and due to covid, I'm not sure if I can expect much for the year as I'm currently not working. I figure there would be little benefit to ask them to pay me w2 for that one time gig where I did about 10 days of shift work. 1099 at least would give me some flexibility in terms of how I am taxed. Any benefit to asking them to pay me w2?

thx

You do have the chance to have a solo 401k with 1099 income. Even with a 401k at your W2 job, you'd still get to contribute the employer portion towards it.
 
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