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setting up a moonlighting

Discussion in 'Finance and Investment' started by CaMD, Aug 15, 2011.

  1. CaMD

    CaMD Senior Member
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    I'd like to start moonlighting this year. Is there a benefit, either financially (like getting extra deductions), or liability-wise to setting up some kind of company/corporation? Of would the cost of setting this up exceed the benefits?

    I'm a resident, so my salary is 50-somethingK per year with no other sources of income.

    Sorry if this is an extremely niave question -- I searched and found a few threads about this, but I didn't really understand how this would apply to me.

    Thank you.
     
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  3. EM_Rebuilder

    EM_Rebuilder Member
    Physician 10+ Year Member

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    I moonlit the last years of residency; quite a ton actually the last year.

    I toyed with this LLC/S-Corp issue and discussed it with my CPA, various private attendings where I worked (who were also ICs), other residents in my same shoes or advanced of me. I found actually one resident in my class that sat up at LLC; his family has a big business and a family lawyer who took care of it all for him.

    I am now at a job with approx 15 other physicians who are all ICs; one of them have LLC/S Corp setup and his wife is a CPA and family with a lawyer.

    I have come to the conclusion that it really is not worth it. It is my understanding that there is actually very little legal protection (as someone said, malpractice insurance protects you). There is a very small tax advantage having to do with what you have to pay into SS. My understanding per my CPA is that I would spend a grand or more setting up and maintaing one of the above (lawyer fees + CPA fees), and then you save maybe a couple grand at most in SS taxes...and supposedly the IRS watches these sort of things uber closely and more than 1 CPA has told me it inreases your chance of an audit...

    With that said, I did not do either of the above.

    Now, as a standard IC (which as a moonlighter you probably will be), you CAN take multiple deductions such as: miles, meals, scrubs, equipment, books, society memberships, test costs, etc...
     
  4. CaMD

    CaMD Senior Member
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    Thank you both for the thoughtful responses. Sounds like there's no real benefit so I will plan to be an independent contractor.
     
  5. TexasPhysician

    Moderator Physician 10+ Year Member

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    In addition to what was mentioned above, incorporating could also eliminate other tax strategies that are potentially more valuable.
     
  6. omarsaleh66

    omarsaleh66 Senior Member
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    I deducted my toyota 4 runner last year as a company car ($35k). I use it only for work. I have a second car for personal use. That helped a lot. I did this as an IC as well. Totally legit per my CPA.
     
  7. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
    Physician Partner Organization 10+ Year Member

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