Locums is a great opportunity to gain independence over your schedule and feel more empowered in your career. But independence–whether you work full-time as a locums provider or take on the occasional assignment–also comes with the responsibility of paying and managing your own taxes. We’ll walk you through some tax planning tips to put you at ease when filing season comes around.

At Hayes Locums, providers are paid as independent contractors. As a 1099 employee, you will be responsible for remitting your own taxes instead of having them withheld from your paycheck.

You don’t have to navigate the complexities of your taxes alone. Here are some tips and strategies to make your tax season a breeze:

Trust the (Tax) Professionals

We can’t emphasize this enough: when it comes to your taxes, leave it to the professionals. Hiring a tax accountant can be crucial to navigating the complexities of paying taxes as an independent contractor and help ensure you’re getting the most out of your deduction.

This is especially true of locum tenens, which often involves filing taxes in multiple states and keeping tabs on travel expenses. We recommend choosing a tax consultant with a background in locum tenens or travel medicine, as they are more likely to understand the nuances involved.  If you frequently take locums assignments out of your home state, it’s a good idea to find consultants with multi-state taxation expertise. 

While it may feel tempting to save on the expense of an accountant by filing on your own, a good accountant can save you money in the long run by helping you get the best deduction possible.  

Track your Expenses to Maximize Your Deduction

While on assignment, make sure to track work-related expenses. As a locums provider, you can deduct the following kinds of work-related expenses:

  • Any travel expenses that haven’t already been reimbursed; 
  • Licensing fees and board exam fees;
  • Cell phone bills related to work; 
  • Health insurance payments;
  • Non-reimbursed mileage

Remember to keep track of your receipts! For easier organization, scan and save them to a specific folder–or use one of the many apps available to scan and digitize those receipts. We also recommend keeping a spreadsheet of all your expenses so you can easily share it with your accountant when it comes time to file. 

Keeping track of your expenses and organizing your receipts throughout the year will simplify providing your accountant with all the necessary information when tax season arrives.

Schedule your Quarterly Tax Payments

If locums work is your primary source of income, or if you owe $1,000 or more in taxes, you may need to set up estimated tax payments: quarterly payments of what you will likely owe in taxes for the previous four months. Quarterly tax payments are usually due on the 15th of April, June, September, and January–be sure to pay on time to avoid penalties!

Even if it’s not a requirement, paying quarterly taxes can ease the burden of a large tax bill at year’s end, and allow for better budgeting throughout the year. 

Working with a tax accountant can be invaluable here–they can help estimate your payments, set up a payment schedule, and in some cases, even make payments on your behalf. When you work together to track expenses and manage quarterly payments, you’ll gain more clarity around your cash flow and potentially reduce your tax liability.

Remember! Being proactive about your tax planning throughout the year is key to your financial success as a locums provider. By keeping up to date with these tax tips and strategies, you’ll be better equipped when tax season arrives–leaving you free to focus on what matters most: providing quality patient care.