Locum tenens work comes with many advantages: an abundant job market, higher pay, a flexible schedule, and more. However, as a locum tenens physician you’re categorized as an independent contractor, which comes with the responsibility of filing taxes independently, rather than having your employer calculate your employment tax.
This means that you’ll probably have to fill out a 1099 tax form, as opposed to the more common W-2.
Many locum providers feel overwhelmed with figuring out what exactly is deductible from their travel, housing, and health expenses come tax season. That’s why Barton Associates annually partners with tax advisor Andrew Schwartz, CPA, who has been providing tax and financial planning services to healthcare professionals since 1993.
In our Tax Webinar, Andrew answered many questions surrounding paying taxes as a locum and which expenses count as ordinary and necessary deductions within providers’ unique situations this tax season. So check out our tax information, and learn all about 1099 physician tax deductions, and locum tax deductions perfect for all provider types.
Rent
While many clients cover the cost of lodging for their locum providers, this isn’t the case for every assignment. If you find yourself covering the cost for your own apartment housing on assignment, you have the tax benefit of deducting the expense of your rent if the following apply. You rent the apartment near where you are working, the apartment is outside the general vicinity of where you live, and the rent paid appears to be ordinary and necessary.
Home Office
Many locum tenens providers prefer the option of telehealth as they are able to treat patients in any part of the country from the comfort of their own home. Since you’re saving on the cost of travel, unfortunately, you can’t deduct travel expenses. But you can save on the at-home space you’ve designated for work — after all, setting up that home office probably wasn’t free!
Deductions are based on the square footage of the part of your home you use regularly and exclusively for business expenses versus the total square footage of your home. If you use the Simplified Home Office method, you can write off the square footage of your home office, up to 300 feet, times $5 per foot.
Uber & Lyft
If you’ve scheduled a task without including car hire, you’ve likely utilized Uber or Lyft for transportation. These services are expensive, especially when you need to use them regularly, but fortunately they are tax deductible for locum physicians.
As long as they are paid in connection with your locum tenens assignment, and you are working outside the general vicinity where you live, Uber and Lyft expenses are deductible.
Travel Vans
Sometimes, locum tenens providers bring their lodging with them on assignments. Travel vans and RV’s are a great way to skip the hassle of coordinating travel and lodging reimbursements with an agency, as it wraps both expenses into one. But living this type of nomadic lifestyle may come with hefty loan payments. While you can’t deduct your monthly payments in full, you can still get a partial deduction:
You would depreciate the vehicle based on its cost, including the loan you take. You can then write off the interest portion of the loan.
Cars
If you use your personal vehicle to make house calls for your locum tenens assignment, you can deduct that as a necessary and ordinary expense. You can claim the expense using the standard mileage rates or on actual expenses incurred multiplied by the business use percentage.
Restaurant Tips
Most locum providers already know that food expenses on assignment are tax deductible, but did you know that you can factor in tips as well? Meals plus reasonable tips are included in your food expenses.
You can also deduct grocery store food that you use to purchase your meals during a business trip, unless you are using per diem rates.
Meals can be reimbursed for each day where you are outside the general vicinity of where you live in connection with a temporary job assignment, including weekends and holidays.
Family Health Insurance
As a locum provider yourself, if you are an independent contractor who is not covered under an employer-sponsored healthcare plan, you can write off 100% your health insurance expenses, including Medicare premiums (if applicable), and dental insurance. And, if both yourself and your spouse are filing as independent contractors, you can not only file a deduction for your spouse’s insurance, but for your dependents as well!
However, this only applies if you don’t have access to an employee-sponsored plan. For example, if your spouse has access to health insurance through his or her job, or if one of your employers offers you insurance under its plan, but you opt to pay for your own independent plan regardless, your premiums are not deductible.
Membership to Professional Organization
You can deduct membership dues to a professional organizations such as ACEP, provided they do not conduct lobbying. If they conduct lobbying, the remaining cost would be deductible.
To learn more about filing taxes as a locum, check out our locum tenens tax FAQs or our 2023-2024 locum tax guide.
Or, to find your next locum tenens position, check out our job board.
This blog was originally written in 2022 by Karina Kagramanov, and was updated by Liliana French.
