job offer opinions

[sweet24752]

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I realize this is super early, but am in the unique position of being offered two different spots for attending position in one year from now very early, and I am just curious is anyone else can shed some light on something I may not have thought about. Both spots are for same company- independent contractor with guaranteed base pay and potential for additional performance based compensations, sign on bonus, no benefits but will be under my husbands

CHoice 1- larger hospital, base pay of 25,000 more per year, in house OB/anesthesia and peds ER section, er visits somewhere around 75000. Double coverage for all but 6 hours. Fast track staffing for 14 hours. Overall feel is move patients and move them quickly- sometimes significant wait times before patient sees physician- pretty typical ER

Choice 2- smaller community hospital, 25,000 less base pay per year, overall about 36000 visits/year. No OB/Peds/Anesthesia. Double coverage only for about 14 hours daily. Fast track for 10 hours. Overall more community feel- take care of pt and do it well as priority, usually no significant wait times before seeing physician.

Any advice on things i may not have thought of? I'm leaning towards choice 2 because even though its less compensation, call me naive but I feel as though I can take care of patients better there. I can work extra shifts at either hospital. Sorry for long post- all responses appreciated!

 

[EctopicFetus]

Questions I have.. some to you and perhaps some to your prospective employees.

What are the patients per hour you will see.

What compensation is there besides "base pay"? Bonuses? Retirement? Malpractice? Are you a 1099 employee (write-offs) or a W2?

How many hours will you work at both places? Are you salary or hourly?

 

[sweet24752]

Patients per hour for Choice 1 is 2.0, Choice two is 1.6.

The base pay is "guaranteed pay". In addition to base pay, they pay based on relative value units which they define as pt per hour, and also on procedures/critical care time, etc. The RVUs are the same additional at both places. No retirement/health benefits. Malpractice is included w a tail. Most people who work for this company are independent contractors and incorporate themselves. There are also bonuses based on patient satisfaction scores, pt per hour seen, and your times in ed (time til physician seen, time in ed, time to dispo, etc). Bonuses for both are based on same thing, and are equal between both choices

For both choices I am hourly. Choice one is 120-140 hours/month. Choice two is 132-144 hr/month. Choice one on average would pay me 25,000 more per year, working about one shift less per month....

 

[EctopicFetus]

Keep in mind it is easier to improve on 1.6 pph than it is 2.0 pph. Being an independent contractor is probably worth an extra 10-20k as well.

Just keep that in mind.

 

[michigator04]

Being an independent contractor is probably worth an extra 10-20k as well.

What do you mean by this? Is this a tax thing, or something else?

 

[EctopicFetus]

What do you mean by this? Is this a tax thing, or something else?

Since I hate the gators let me start there. I hate the gators.

Now to answer your question. It is a tax thing. Imagine if your IRS reported income was 220 and you paid your 20% on that. Now imagine getting 20k in reimbursement from your own corporation (tax free) and your income was 200k. Thats a winner to me. You would save 30+% depending on state taxes.

 

[The White Coat Investor]

Being an independent contractor doesn't necessarily mean less taxes, in some cases it means more (since you pay both halves of SS and medicare.) You also have more business expenses such as benefits. Sure, you can write them off, but in general, it is better to have "free" benefits than "write-off-able" benefits. I generally expect a higher 1099 hourly rate than a W-2 rate to make up for these two things.

But if you really have to choose, K-1 (Partner income) is the way to go. 🙂 That way you have some say in how the overall group is run.

To the OP-take the job where the docs are happiest. Forget about $25K. You will be no happier making $250K than $225K (or whatever.)

 

[gutonc]

To the OP-take the job where the docs are happiest. Forget about $25K. You will be no happier making $250K than $225K (or whatever.)

This is the best advice here so far. $25K will in no way make up for a crappy work environment.

 

[TysonCook]

Agreed, $25k is not what you should be looking at. Maybe when you're in the $50-150k, then you can start hating your work....and loving your off time. In then end go with what "feels" best to you. Also realize that in 1-2yr everything could change (buyout of your group, contract loss, you leave, pay stipulation change etc).

 

[justaregularmed]

Being an IC you stand to lose ~15% of whatever you make to cover your ss/aid/are contributions.

 

[gutonc]

Agreed, $25k is not what you should be looking at. Maybe when you're in the $50-150k, then you can start hating your work....and loving your off time.

I was going to say $250K.

I used to work for a guy whose primary philosophy in life was "never compromise your integrity for less than $100K." Of course, this was in the 80s so with inflation and all it's probably in the $200k range now.

 

[deleted109597]

Just like real estate.
Location location location.
If you hate life at either of them, no amount of money will make up for it.
There are also many more jobs out there as well. You don't have to limit it to these two unless you want to.

Type S incorporation for physician's does equal tax breaks. Just make sure to pay your accountant well.

State income tax can mean a lot to your take home pay. So can property tax.

1 less shift per month can mean a lot too.

 

[The White Coat Investor]

Type S incorporation for physician's does equal tax breaks. Just make sure to pay your accountant well.

That's not actually true. You get precisely zero tax breaks for being an S Corp. You really don't get much liability protection either.

Actually that's not entirely true, you get to deduct the cost of incorporating.

There is little benefit to an independent contractor doc becoming an S Corp.

 

[Cooperd0g]

In theory the S corp or LLC helps limit your liability, but being an independant contractor as the default sole proprietor allows you to take the same business deductions as if you were a pass through S corp or single member LLC.

 

[deleted109597]

That's not actually true. You get precisely zero tax breaks for being an S Corp. You really don't get much liability protection either.

Actually that's not entirely true, you get to deduct the cost of incorporating.

There is little benefit to an independent contractor doc becoming an S Corp.

What about the tax free bonus loophole? Also business expenses?

 

[fuegofrio17]

That's not actually true. You get precisely zero tax breaks for being an S Corp.

The benefit to forming an S Corp is that you can pay yourself "a reasonable salary" and then distribute the rest of your earnings as a special dividend. You are only required to pay payroll taxes on your salary and not on the remaining earnings. Thus, you save payroll taxation on the portion of your earnings not deemed salary.

The S Corp offers no additional medicolegal protection against malpractice though.

 

[deleted109597]

The great state of Texas gives me medicolegal protection. I'm just trying to keep more of the money I earn.

 

[The White Coat Investor]

You are only required to pay payroll taxes on your salary and not on the remaining earnings.

Yes, but we're only talking medicare tax at EP salary levels. That's 2.9%. So say you pay yourself $200K salary and take $50K of dividend income-even that is probably pushing for an IRS audit.

So 2.9% of $50K is only $1450. Subtract out the costs/time of incorporation and you're awfully close to breaking even for little benefit.

Remember your S Corp "dividends" aren't taxed at the qualified dividend rate. You pay your ordinary marginal tax rate on them.

 

[The White Coat Investor]

Also business expenses?

You can deduct all your business expenses without being incorporated. Of course, you'd have MORE business expenses by incorporating, but spending money just to save 1/3 of it is foolish.

 

[EctopicFetus]

The other beenfit to incorporating is that you can separate your business taxes from personal. Sure you could write off the same stuff but from accountants and other docs they say you spread your risk of being audited between your corp and your personal tax. Most say it is worthwhile. I am a w-2 employee so this doesnt pertain to me but it did when I was working as an IC moonlighting. I did not incorporate myself.

Also with obamacare that 2.9% for medicare is gonna go up, just a thought.

 

[Venko]

take the job where the docs are happiest. Forget about $25K. You will be no happier making $250K than $225K (or whatever.)

amen

 

[EctopicFetus]

amen

Agreed. Every place I interviewed I asked what happened to their last 5-10 hires (based on group size) and how many people have left in the last 3 years. I think getting this answer helps you figure out how happy people are. It is a simple question that anyone worth their salt should be able to answer without hesitation.