At ProLocums, we believe there is no one-size-fits-all way to organize partnerships with hospitals, and the same applies to our relationship with the physicians we hire to care for patients.
Whether you are employed and receiving a W-2 or are an independent contractor physician receiving a 1099 depends on various factors including specialty and role. Most physicians have been W-2 employees at some point, so they inherently understand this model. The independent contractor (IC) model is a little more foreign to many, so it is important to understand the pros and cons of this tax status.
Transitioning from an employed model to being an independent contractor physician (ICP), or starting your career as an independent contractor, presents a variety of often bewildering questions. One of the first is likely about the difference between forming an LLC and an S Corp.
Choosing the right business structure is a complicated question that depends on your state, personal financial goals, and family needs. To help physicians navigate these choices, we've teamed up with DocWealth.io, which specializes in providing CPA services for 1099 physicians to maximize their earnings. Consulting with a professional like DocWealth.io can help you come up with a plan that fits your particular situation and needs.
In this article, we will discuss why being a 1099 physician is the best option and explore whether you should form an S Corp or an LLC to maximize your financial benefits.
When deciding between forming an LLC or an S Corp as a 1099 physician, it's crucial to understand the distinctions and benefits of each structure.
S Corporation (S Corp): An S Corp, or S corporation, is a type of business entity that offers the advantage of pass-through taxation. This means that the company's profits and losses are passed directly to the individual owners, who report them on their personal income tax returns. This structure helps avoid the double taxation commonly associated with traditional C corporations. Owners of an S Corp can also save on self-employment taxes, as they can take a reasonable salary and distribute remaining profits as dividends, which are typically taxed at a lower rate. [not subject to additional self employment taxes.]
Limited Liability Company (LLC): An LLC, or limited liability company, blends the benefits of a corporation with the flexibility of a partnership or sole proprietorship. LLCs are relatively easy to establish and operate, offering significant flexibility in how they are taxed and how profits and losses are allocated among the owners. The members of an LLC are not personally liable for the company's debts and obligations, providing a layer of personal asset protection. Profits can be distributed among one or more members, making it a versatile choice for many business owners.
Contrary to popular belief, the primary purpose of forming an LLC for physicians is not necessarily to shield from liability, but to create an opportunity to save money through electing S Corp taxation.
How Does an LLC Help Lower Your Tax Bill? An LLC can choose to be taxed as an S Corp, allowing the business owner to take advantage of pass-through taxation while also potentially reducing self-employment taxes. By electing S Corp status, the physician can receive a portion of their income as a salary (subject to payroll taxes) and the remaining as a distribution (not subject to self-employment tax), leading to overall tax savings.
Many independent contractor physicians opt to form an LLC for its ease of setup and then elect S Corp taxation for federal tax benefits. This setup allows physicians to benefit from the simplicity of an LLC while enjoying the tax advantages of an S Corp.
Here’s how it works:
1. Formation and Election:
2. Revenue Flow:
3. Salary and Distributions:
As both the employer and employee, the independent contractor physician can significantly reduce self-employment taxes. For 2024, the self-employment tax rate is 15.3% on earnings up to $160,200, with an additional 2.9% on income above this threshold. By balancing W-2 wages and distributions, physicians can save thousands of dollars annually, primarily on payroll taxes, while still meeting their income tax obligations. This strategy offers substantial savings for independent contractor physicians.
Dr. Smith owns Smith Medical, LLC. ProLocums pays Smith Medical, LLC $325k through 1099 payments. Smith Medical, LLC then pays Dr. Smith a $125k salary via W-2. As a result, Dr. Smith’s payroll tax is calculated only on the $125k salary instead of the entire $325k.
Payroll Tax Implications Without an LLC:
Payroll Tax Implications With an LLC:
By structuring his income this way, Dr. Smith saves over $10,000 in payroll taxes.
The next common question is, “What about the $200k that I’m not taking as wages?” That $200k remains your money and can be accessed through owner distributions or dividends. You can transfer these funds from your business bank account to your personal account with ease. The advantage here is that this $200k is not subject to payroll tax, though it is still subject to income tax.
Forming an LLC and electing S Corp taxation has numerous benefits, but there are also potential downsides. These include compliance with additional tax rules and regulations specific to S Corps. Physicians considering this option should weigh the benefits and drawbacks and consult a tax professional before making a decision. For more information, visit DocWealth.io.
In recent years, the tax landscape for independent contractors has become increasingly complex, making much of the existing online information outdated. Consulting with a tax professional is crucial for understanding your specific situation.
Qualified Business Income (QBI), outlined in Section 199A of the tax code, refers to net income from a qualified trade or business eligible for deductions under the Tax Cuts and Jobs Act of 2017. For independent contractor physicians, this income is eligible, but only if it falls under certain thresholds:
QBI Example:
Understanding QBI and its implications can significantly impact tax planning and savings for independent contractor physicians. For more detailed advice tailored to your circumstances, visit DocWealth.io.
The 2017 tax law that introduced QBI also capped state and local tax (SALT) deductions at $10,000, targeting high-income earners like physicians. To counteract this, many states have introduced or proposed a Pass-Through Entity (PTE) Level Tax. If your state offers PTE, you can pay a portion of your state income tax through your LLC and receive a federal deduction.
For Example:
This strategy allows high earners to navigate the SALT deduction cap effectively.
Organizing an LLC and paying yourself as an employee adds complexity but can lead to substantial savings. In the examples above, Dr. Smith could save:
These figures don’t include potential savings from retirement contributions or business deductions. While these examples are simplified and may not apply to your specific situation, the potential benefits are significant.
For personalized advice, consult your CPA or schedule a free 30-minute session with DocWealth.io.
Summary: Locum healthcare recruitment is changing fast. From digital platforms to telemedicine and flexible staffing, discover the future of healthcare staffing agency USA solutions and how temporary physician jobs USA are reshaping the industry.
Locum healthcare recruitment has always been an essential part of filling workforce gaps in hospitals and clinics. With rising demand for flexible staffing, the way doctors, nurses, and healthcare organizations connect is changing fast. In the USA, this shift is especially visible in the rise of temporary physician jobs and the role of staffing agencies that help both sides manage the complexity of healthcare delivery.
The healthcare system in the US is under pressure. An influx of patients, fewer physicians in certain fields, and increasing burnout means facilities can't always rely on permanent staff. Locum work provides a step into a more flexible workforce—inducting qualified professionals to ensure care isn’t interrupted when there isn’t a permanent physician.
For physicians, locum assignments can also be advantageous: flexibility, exposure to different clinical environments or new thinkers on clinical problems, and the possibility of more pay than through a permanent contract. For facilities, it is a way of remaining fully employed without a long recruitment process.
1. Digital-first recruitment
Healthcare staffing agency USA operations are moving online at scale. Agencies are investing in platforms that match doctors with openings in real time, cutting weeks of back-and-forth emails. Mobile apps now allow candidates to manage profiles, verify credentials, and accept jobs with a few clicks.
2. Rising demand for specialists
Temporary physician jobs in the USA are not limited to generalists anymore. There is growing demand for specialists such as anesthesiologists, psychiatrists, and emergency medicine doctors. As population health needs shift, agencies are building talent pools to respond faster to niche requirements.
3. Credentialing automation
Credential verification used to be a slow, manual process. Now, agencies are using automated tools to speed up licensing, background checks, and malpractice history review. This means hospitals can onboard locum physicians in days instead of months.
4. Telemedicine integration
Locum work is no longer restricted to physical presence. Telehealth appointments are creating a new branch of locum jobs where doctors can serve patients remotely. This widens the pool of available talent and helps facilities in underserved areas access skilled professionals.
5. Focus on work-life balance
Physicians choosing locum roles often do so for flexibility. Agencies are responding by offering more short-term assignments, weekend shifts, and even international opportunities. This trend reflects a wider industry push toward respecting healthcare workers’ need for balance.
Even with progress, locum recruitment is not without problems.
1. Smarter data use
Agencies are using predictive analytics to anticipate staffing shortages before they occur. This helps hospitals plan locum use strategically instead of reactively.
2. Partnership models
Rather than one-off placements, some healthcare staffing agency USA companies are building long-term partnerships with hospital networks. This reduces cost and ensures a steady flow of candidates.
3. Flexible payment systems
Daily or weekly pay options are becoming more common, making locum work financially attractive and improving retention.
4. Building loyalty
Temporary physician jobs in the USA are now often paired with perks like travel support, housing, or continuing medical education credits for more sustainability.
Locum healthcare recruitment in the USA is moving toward a hybrid model. Technology like ProLocums will streamline matching and credentialing, while human recruiters focus on relationship building and ensuring cultural fit.
For healthcare facilities, the goal will not just be to fill empty slots but to build a flexible workforce strategy. For physicians, the choice will increasingly be between traditional permanent roles and dynamic locum careers that offer freedom and variety.
The demand for locum healthcare professionals is here to stay. With smarter tools, better support systems, and stronger partnerships, the industry is heading toward a future where temporary staffing is not a stopgap but a strategic pillar of care delivery. Both healthcare staffing agency USA providers and physicians looking for temporary physician jobs USA stand to benefit from this evolution, provided they adapt to the changing landscape.
09/22/2025
Locum recruitment is more important than ever because the need for flexible healthcare staffing solutions has grown so much in the last several years. As more and more temporary physician jobs become available, healthcare staffing organizations are having to deal with a number of new problems. Finding the right applicants and dealing with complicated rules might make hiring locum doctors more difficult than it looks. Do you want to know what these problems are and how to solve them in 2025? Read on to learn about the seven biggest problems in locum recruitment and how healthcare companies may overcome them.
Challenges: One of the hardest things for healthcare staffing agencies to do is find the right team members to fill temporary physician jobs. There aren't enough qualified professionals available to meet the needs because the demand for healthcare services is expanding, especially in rural and undeveloped areas.
Solution: To fix this, healthcare staffing agencies should look for applicants from other countries and use specialized recruitment platforms to find them. Using social media and digital channels can help you find more possible locum doctors.
Challenges: Healthcare staffing agencies have a difficult time promptly hiring locum physicians because each state has its own specific licenses and credentialing rules. The paperwork and complications that come with this process might make it take longer to fill temporary medical jobs. Sometimes, doctors have to wait months before they can start their assignments.
Solution: One of the greatest ways to solve this problem is to make the credentialing process easier by buying equipment that can keep track of all the paperwork and applications in one location. Using cloud-based software or databases to keep track of licenses and credentials can cut down on how long it takes to get things done by a lot.
Challenges: Healthcare businesses are competing more for locum physicians since there is a high demand for them. This makes it difficult to find the best candidates. Agencies who don't offer competitive packages can lose good doctors.
Solution: Agencies should pay their workers well, including travel expenses, housing allowances, and flexible hours. It can also be useful to talk about the perks of locum tenens, such as a good work-life balance and the chance to travel.
Challenges: Locum physicians generally work on short-term contracts, which means they leave more often and healthcare facilities may not be stable, which can affect patient care.
Solution: To cut down on turnover, healthcare staffing companies and organizations can build good connections with locum doctors. Consistent work, fair pay, chances to move up in your career, and a supportive work environment with clear expectations can all help keep employees and make them happier at work.
Problem: Many healthcare staffing services only work in certain areas, which might make it hard to meet the demands of facilities in places that don't have enough staff. It is especially harder to find locum doctors in rural or bare areas because doctors are less likely to want to work there.
Solution: Agencies can reach more people by entering overseas marketplaces and giving doctors incentives to work in locations that don't have enough doctors. Temporary doctors may be more interested in remote assignments if they are offered help with moving, more pay for jobs that are hard to fill, and a good work environment.
Challenges: Ensuring that locum physicians’ skills align with the facility’s needs can be challenging. This mismatch may lead to dissatisfaction for both the healthcare provider and the physician.
Solution: Agencies should carefully assess both the client’s needs and the physician’s skills. A thorough intake process, including skill assessments and job expectation discussions, ensures a better match.
Challenges: Urgent staffing needs can create last-minute challenges for agencies, particularly when there’s little time to recruit qualified locum physicians.
Solution: Agencies should maintain a pool of "on-call" locum physicians who can fill urgent shifts on short notice, ensuring preparedness for emergency staffing needs.
Locum recruitment in 2025 presents unique challenges, but with the right strategies, healthcare staffing agencies like ProLocums can overcome them. By addressing the physician shortage, streamlining credentialing, offering competitive compensation, focusing on retention, providing incentives for rural placements, ensuring skill matching, and managing urgent requests, agencies can ensure that temporary physician jobs are filled quickly and effectively.
08/12/2025
Managing a healthcare facility is not all about providing great patient care. It's about smart workforce planning and flexible staffing practices. Today, staffing gaps are becoming an increasing big problem in U.S. healthcare organizations. The U.S. Department of Health and Human Services (HHS) estimates that tens of millions of Americans lack primary care, dental, and mental health providers in their counties.
Dependence on full-time staff is no longer possible. With the need to cater to patient needs and sustain quality care, healthcare facilities have to turn more flexible when it comes to staffing. This is where locum doctor comes in, providing prompt assistance and keeping organizations operationally effective. Whether a big hospital or a remote clinic is doing a Google search by typing‘healthcare staffing agency near me’, locum partners can fill your staffing gap efficiently.
Although permanent personnel play an integral role in operations, too much dependency on them can lead to significant issues:
1. Inflexible Staffing
Patient throughput varies quickly through seasons of flu, natural disasters, holidays, or shifts in populations. Relying only on full-time staff members can lead to overworked teams during peak periods and idle staff during lean periods. This mismatch creates long wait times, elevated stress levels, and compromised patient care.
2. Skyrocketing Burnout Rates
More than 45% of doctors in 2023 were experiencing signs of burnout, and the majority were considering leaving the field altogether. Chronic staff is likely to feel overwhelmed to maintain pace with constant demand, rigidities, and institutional aims and thus become susceptible to exhaustion, dissatisfaction, and medical errors.
3. Geographic Mismatch
Clinician shortages are more acute in rural areas. Rural hospitals have difficulty recruiting and retaining full-time employees because career prospects are poor and there are fewer lifestyle amenities. The AMA estimates the number at 65% of rural communities that have insufficient primary care coverage, resulting in decreased access and continuity of care.
4. Disparities in Specialty Services
In smaller or distant centers, full-time specialists might not necessarily be employed. But without specialists, patients have to wait longer, receive referrals elsewhere, or even get turned down. This damages the facility's reputation and patient satisfaction.
This is where collaboration with a healthcare staffing agency near you offering locum doctors comes in as a difference maker. These pinch-hitting doctors, nurse practitioners, physician assistants, and dentists fill holes at the last minute or for scheduled coverage, providing continuity of care without burning out permanent staff.
1. Scalable and Flexible Support
Locum doctors can travel to fill openings during staff time off, patient spikes, or unexpected openings. They provide you with flexibility in staffing and avoid burnout without committing too much to long-term hiring.
Whether it is a flu season spike or an unexpected high rate of absenteeism, having a healthcare staffing agency nearby means you will never be short-staffed when you need them the most.
2. Avoiding Burnout
By providing cover during peak periods, holidays, or vacations, locum doctors prevent overtime stress on full-time employees. They restore work-life balance, enhance team morale, and preserve your long-term staff from burnout and turnover.
3. Closing the Rural Gap
Locum doctors are most useful in rural and under-served areas. Because they're willing to go on short-term travel assignments, they cover gaps in critical positions in such areas where recruitment is not possible. Having a good healthcare staffing agency opens doors to a national database of qualified doctors who are willing to staff where they're needed most.
4. Specialty Care on Demand
Locum specialists are available in every specialty. So, do you require coverage for a specialist out on leave or experiment with a promising specialty service? Locums do that easily without opting for full-time positions.
The outmoded model of staffing is no longer adequate in the modern healthcare climate. The dynamic workforce and increasing needs of the patient population necessitate flexible, affordable, and scalable staffing models. Locum providers offer just that.
By joining with a strong healthcare staffing agency like ProLocums, you can tap into the best experts who will bring continuity of care, minimize staff burnout, and enhance development in any type of community—urban, suburban, or rural.
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