06 Sep Benefits of Having an LLC as a Locum Tenens Physician
As a locum tenens physician, you enjoy the freedom of picking when and where you want to work – and for whom.
But the benefits don’t stop there. A locum tenens doctor can also take advantage of the several tax advantages offered to corporations – vs. filing income under your own social security number.
About a Limited Liability Corporation (LLC)
An LLC can be a great entity for a locum tenens physician for a variety of reasons. For example, having an LLC can reduce business liability with much less hassle than incorporating. However, just like with incorporation, there’s no protection afforded from malpractice. Malpractice is always personal.
It’s important to note that the IRS does not recognize LLCs, so an LLC must choose to be taxed as a sole proprietorship, partnership, or corporation anyway. And if filing taxes as an S Corp makes sense for you, forming an LLC and then electing to file as an S Corp may be less hassle than incorporating.
Enhanced Tax Benefits
Locum tenens doctors experience the freedom to deduct more business expenses than traditional employees. Professional expenses commonly incurred include health insurance, travel, lodging, meals, automobile expenses, education, licenses, and examinations. (Note: travel, lodging, meals, and car expenses are often reimbursed and therefore not eligible as tax write-offs.)
When you start an LLC as a locum tenens provider, you could experience even greater tax-related benefits. By definition (in most cases), one of the benefits of an LLC is that it allows for pass-through taxes. This means you’ll avoid filing a corporate tax return and bypass double taxation.
To help ensure that you’re receiving the tax benefits you qualify for, locum physicians should keep track of business expenses (gas, food, business-related entertainment) on assignment or preparing for the next assignment. These are all taxable to state and federal governments to some degree and the locum physician should consult with a certified tax professional to categorize these expenses before the end of each tax season.
An LLC May Help Protect Your Assets
An LLC can protect locum doctors from carrying personal liability if the company is sued or develops debt. However, limited liability isn’t to be confused with complete legal immunity, as it doesn’t apply to medical malpractice and other wrongful acts. The bottom line is locum tenens physicians starting an LLC can potentially be an important step toward protecting yourself, any employees, and your assets. It’s recommended that physicians discuss with a trusted tax advisor to get a complete overview.
Less Paperwork, Fewer Startup Costs
One of the great benefits of an LLC is that locum tenens physicians are freed from the stresses of lengthy paperwork and high startup costs. With an LLC, the weight of these tedious details is significantly less, and you can spend your time providing great patient care and exploring the locations you’ve chosen for your assignments.
At Annashae we’re dedicated to the placement of highly-skilled clinical practitioners in short and long-term positions. As a nationwide medical staffing and consulting firm, we provide a range of services that enable our candidates to quickly find the career opportunity that fits their needs. For information on how you can further your clinical career, contact us today.
*This blog is informational only. It does not guarantee results. Please consult with a professional for specific guidance.