Filing taxes in multiple states and figuring out deductions and tax benefits for your locum tenens assignments can be time-consuming and confusing. Fortunately, we’ve provided several resources to help you when you begin the process.
Working as an Independent Contractor
Locum tenens providers work as independent contractors, not employees, which means you can deduct costs associated with your temporary assignment, including food, housing, travel and continuing education. Independent contractors also can take advantage of a self-employed retirement plan and contribute up to 25 percent of their income. Learn more about independent contractor status in Tax Information for Locum Tenens Physicians: Working as an Independent Contractor
Qualifications for Travel Deductions
You must meet several requirements as a locum tenens physician to deduct unreimbursed travel expenses from your taxes:
- You must maintain a permanent tax home that you return to frequently
- The assignment must not be within commuting distance of your tax home
- Your temporary assignment must not last longer than one year in the same geographical area without a significant break
Get all the details in our Physician Travel Tax Issues
Because you work as an independent contractor when you take locum tenens assignments, you generally should not file an unemployment claim when your assignment ends. CompHealth should not be listed as a previous employer because you were an independent contractor, not an employee. For more details, plus information about reporting meal per diems in the post 2 Things Locum Tenens Need to Know About Taxes
State-specific Income Taxes
Independent contractors who work in California and are not residents of the state are required to have 7 percent withheld on all compensation, unless the compensation does not exceed $1,500 annually. Details about this law are included in the post Nonresident California Withholding on Physician Compensation
Note: Be sure to speak with a tax professional with any questions you have when filing your taxes.