More and more CRNAs are making the decision to transition from being a W-2 employee to a 1099 independent contractor. Sharon made this move in recent years and is sharing her experience on the podcast to help educate other CRNAs who are weighing the pros and cons. Once you’ve made the decision to go 1099, how do you make sure you’re doing everything correctly? We want to help you navigate the transition to becoming a 1099 CRNA.
When anyone decides to go into business for the first time, it’s a different thought pattern. While we might be highly skilled in our trade, we’re not business owners, and we don’t possess many of the skills needed to be successful on our own. That’s why setting up your company correctly becomes incredibly important. Transitioning to self-employment requires a different mindset and a solid understanding of business principles, which is why we recommend consulting qualified professionals, such as accountants and attorneys, who are familiar with the CRNA industry to ensure you're on the right track.
One of the key decisions you'll need to make is choosing the right business structure. You’ll want to weigh the pros and cons of sole proprietorships versus LLCs/PLLCs (Professional Limited Liability Corporations). While a sole proprietorship is easy to set up, it offers no liability protection or tax advantages. On the other hand, an LLC/PLLC can provide liability protection and, if taxed as an S corporation, can potentially offer significant tax savings.
Once your business structure is in place, the next step is to apply for a tax ID number. This process can be done online through the IRS website with instant results. You also want to think about opening a business bank account and obtaining a business credit card to keep personal and business expenses separate.
Managing taxes is another crucial aspect of being a 1099 contractor. To stay on top of this, you’ll want to file quarterly estimated taxes and keep meticulous records of your business expenses. We recommend using software like QuickBooks to track income and expenses, ensuring you categorize expenses correctly for tax purposes. There’s another layer of complexity for CRNAs who plan to work in multiple states. We advise CRNAs to register their business as a foreign entity in each state in which they work to avoid potential legal and tax issues.
As you can see, transitioning to 1099 work as a CRNA involves multiple steps and considerations, but with the right guidance, it can be a smooth and rewarding process. We’ll be back soon with more information around the tax concepts for 1099 CRNAs.
Are you a Resident or CRNA looking to transition into independent practice? The AANA and Beyond the Mask are here to help you thrive as your own boss!
Introducing the 1099 CRNA Institute – taught by 'Beyond the Mask' hosts Jeremy Stanley and Sharon Pearce. This comprehensive educational series provides detailed guidance on business structure, legal and tax implications, and financial management tailored specifically for 1099 CRNAs.
Visit AANA.com/1099 to learn more and take the first step toward your new future.
The opinions voiced in this material are for general information only and are not intended to provide specific legal or tax advice or recommendations for any individual.