Tax help for physicians who get a 1099
You spent years learning medicine. Nobody taught you how a locum contract, a hospital W-2, and moonlighting shifts all land on one return. We handle that part.
Nothing is due today. Personal returns start at $250.
Many physicians have income from more than one place in the same year. A hospital W-2, a locum tenens contract paid on a Form 1099-NEC, moonlighting shifts, a medical directorship, maybe telehealth or expert witness work. Each one is taxed differently, and the 1099 side is where your business deductions and your self-employment tax both live. One point to be clear about up front: the deductions below belong to your independent work. Out of pocket costs tied to a W-2 hospital job are not deductible as employee expenses under current federal law, so what matters is which hat you were wearing when you paid. The goal is a return that captures the real cost of running your independent work, filed correctly, with the state side handled when you worked in more than one.
What doctors can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Malpractice insurance premiums
Premiums you pay yourself for professional liability coverage on your independent work are deductible against that income. Tail coverage you buy when leaving a claims made policy is deductible the same way.
If the hospital or staffing agency carries the policy for you, it is not your deduction. Only what you actually pay out of pocket for your own independent work counts.
State licenses and DEA registration
Renewal fees for the states you are credentialed in, DEA registration, controlled substance registrations, and the credentialing and privileging fees facilities charge you, to the extent you pay them yourself for your independent work.
Costs of qualifying for the profession in the first place are treated differently from renewals and ongoing fees, and anything an employer or agency reimburses is not yours to deduct. Bring the dates and the receipts so we sort them correctly.
Board certification and MOC fees
Specialty board recertification fees, maintenance of certification modules, question banks, and exam fees connected to the specialty you already practice.
Costs that qualify you for a new specialty or a new line of work follow different rules than costs that maintain or improve the skills you already use. Tell us what the fee was for rather than assuming it all lands in one bucket.
CME courses, travel, and materials
Conference registration, online CME subscriptions, board review courses, journals, clinical reference subscriptions, and the airfare, lodging, and ground travel to attend, when you pay for them yourself for your independent work.
The trip has to be primarily for the education. If you add vacation days, only the business portion is deductible, and business meals are limited to a percentage of the cost rather than the full amount.
Medical society and staff dues
Your specialty college, state and county medical societies, and medical staff dues at the facilities where you take independent shifts.
The share of dues that goes to lobbying and political activity is not deductible. Many organizations report that portion on the dues notice, so keep the notice with the receipt.
Clinical instruments and equipment
Stethoscope, loupes, ultrasound probe, otoscope, procedure trays, and any specialty instruments you buy yourself for your independent work. Larger purchases are written off under the rules for business property, which in some cases allow a faster write off in the year you place the item in service.
Keep the purchase date and amount for each item, and tell us if you also use the item personally, because only the business share is deductible.
Scrubs, white coats, and protective gear
Scrubs, lab coats, surgical caps, gloves and other personal protective equipment, and the cost of laundering those items when you buy them for your independent work.
The test is whether the item could be worn as everyday clothing, not whether you happen to wear it only at the hospital. Street clothes under the coat do not qualify, and neither do shoes you could wear off duty.
Locum tenens travel and lodging
When an assignment takes you away from your tax home, airfare, rental car, lodging, and meals during the assignment can be deductible business travel. Meals are limited to a percentage of the cost rather than the full amount.
An assignment realistically expected to last more than a year is no longer temporary, and the travel deduction stops. You also cannot deduct costs the agency already reimbursed you for, and if you have no regular tax home the whole category changes.
Mileage between work sites
Driving from one facility to another, to a satellite clinic, to nursing home rounds, or to a patient visit for your independent work is business mileage. You can use the IRS standard mileage rate published for that year or your actual vehicle costs, and the choice has consequences later, so we look at both.
Home to your regular workplace is commuting and is never deductible, no matter how far the hospital is. A home office that genuinely qualifies can change where the business day begins, which is one reason that question matters.
Home office for your independent work
If a specific area of your home is used regularly and exclusively for the administrative side of your independent practice, such as charting for your 1099 shifts, telehealth visits you bill yourself, or billing and scheduling, a share of rent or mortgage interest, utilities, and insurance can be deductible against that self-employment income.
Exclusive use is strict. A desk in the guest room that also holds the family computer does not qualify, and neither does charting at the kitchen table. A home office used for your employed hospital work does not produce a deduction at all under current federal law.
EMR, billing, and telehealth software
Your billing service or clearinghouse fees, EMR subscription, e-prescribing, scheduling and telehealth platforms, transcription or scribe services, and secure messaging used for your independent work.
If a subscription covers both your independent work and personal use, only the business share is deductible, so tell us how it is split.
Retirement plan and self-employed health insurance
Contributions to a retirement plan you establish for your self-employment income are generally deductible, and health insurance premiums you pay yourself may be deducted on your personal return, limited by your net earnings from that self-employment work.
Eligibility for a subsidized employer plan, including your spouse's, shuts off the health insurance deduction for any month you could have joined it. Contribution room depends on your net self-employment income and on the plan type, so this is calculated, not guessed.
Schedule C works fine while your independent income is modest and you are the only person in the practice. Once your net profit from 1099 work is consistently high, or you add a partner, hire a nurse or biller, or start carrying real business assets, an S-corp is worth pricing out against the cost of payroll, a separate return, and state requirements for professional entities. The trigger is your numbers, not a round year or somebody else's advice.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every Form 1099-NEC and 1099-MISC from staffing agencies, hospitals, and telehealth platforms, plus any W-2s
- Your locum tenens contracts and any documentation of stipends or reimbursements the agency paid you
- A list of every state you physically worked in, with rough dates or shift counts for each
- Malpractice premium statements, including any tail coverage you purchased
- License, DEA, board certification, and credentialing receipts for the year
- CME registrations, course receipts, and the travel booked to attend them
- Records of equipment you bought, with purchase dates and amounts
- Your mileage log or tracking app export, plus total miles driven for the year
- Estimated tax payments you made, federal and state, with dates and amounts
- Last year's tax return, and your entity paperwork if you have an LLC or S-corp
What trips people up
Counting the drive from home to the hospital as business mileage
Log only trips between work locations, or claim a home office only if it truly meets the regular and exclusive test, which can change where the business day starts. Track mileage with an app during the year instead of reconstructing twelve months in April.
Skipping quarterly estimated payments because a W-2 job withholds something
Withholding from your employed shifts is set for that job, not for your 1099 income, and underpayment penalties can apply even if you pay the balance in full at filing. We calculate the quarterly amounts once your contract mix is known, and we look at whether raising your W-2 withholding is the cleaner fix.
Ignoring the states you worked in on short assignments
Physically working in a state can create a filing obligation there, and the rules and thresholds differ by state. Give us the state list and dates up front so any nonresident returns and the credits between states are handled together, not as an amendment later.
Deducting a whole conference trip that included vacation days
Split it. Registration, the education days, and travel to and from are business. The extra days are not, and meals are limited. Keep the agenda with the receipts so the split is documented.
Forming an S-corp because a colleague said to
An S-corp only helps once the self-employment tax savings exceed payroll costs, a separate business return, state filing fees, and a reasonable salary you actually have to pay yourself. We run your numbers first and tell you either way.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
I have a W-2 hospital job and 1099 locum shifts. Does that complicate my return?+
It is a common combination and it is manageable. The employed income goes on your return as wages. The independent work goes on Schedule C, where your business deductions reduce it, and Schedule SE calculates self-employment tax on the net. The main thing to check is whether your W-2 withholding covers the tax on the 1099 side, because it is not set up to.
I worked in four states last year. Do I file four returns?+
Possibly, plus your home state. Working physically in a state can create a filing requirement there for the income you earned in it, though the rules and thresholds differ by state and some states have no income tax at all. Your resident state generally allows a credit for tax paid to another state so the same dollars are not taxed twice, and that credit depends on the nonresident returns being prepared correctly and in the right order. Bring the state list and dates.
Should I be an S-corp?+
It depends on your net self-employment income and whether you will genuinely run payroll. An S-corp can shift part of your profit out of self-employment tax, because you pay yourself a reasonable salary subject to payroll taxes and take the rest as a distribution, but it adds a business return, payroll filings, state fees, and a salary you must actually pay and be able to defend. Below a certain level of profit those costs outweigh the savings. We look at your numbers before recommending it, and some states also restrict how a physician practice can be organized.
Can I deduct my student loan payments?+
The payments themselves, no. Interest on a qualified student loan may be deductible, but the deduction phases out above income levels that are adjusted each year, and it is not available if you file separately from your spouse. Bring your Form 1098-E anyway so we check rather than assume. Also tell us if you are on an income driven repayment plan or pursuing forgiveness, because your filing status choice can affect how the payment is calculated.
My agency pays a housing stipend. Is that taxable?+
It depends on whether you are traveling away from your tax home and how the agency treats the stipend. If it is included in the income reported on your 1099, it is being treated as pay, and your actual lodging and travel costs are what you deduct against it. If you do not have a regular tax home to be away from, the analysis is different. Bring the contract and the pay statements so we can see how they handled it.
Do you work with physicians outside Florida?+
Yes. We are based in Coral Gables and work with clients across the country, in English and Spanish. Multi-state physician returns are handled remotely start to finish, including secure document exchange and electronic signatures.
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