How Taxation Works for Locum Tenens

When you start working as a locum tenens provider, you will be considered an independent contractor. Working in different states throughout the year may add complexity during your taxation time. You will have to file taxes in all the states you’ve worked which would certainly increase the expenses.

Although you experience these issues, locum-related benefits will outweigh them. You will even end up making more money while taking control of your working schedule. As you will be your own employer, you could enjoy multiple write-offs to mitigate your taxation costs.

Once you get to know the potential benefits of being a locum physician, you will certainly make arrangements according to your schedule.

Here is the list of taxation-related factors every locum tenens physician should be aware of.

Responsibilities of Your Employer

As mentioned already, keep in mind that you are the employer of yourself. Although your contract is out to care facilities including clinics, private practices, and hospitals, you will be responsible for your taxation. So what does it signify?

The care facilities you contract with are called clients and not employers. Hence, they will not pay tax on your behalf.

Usually, employers withhold state and federal income tax, social security, and other related fees. When you are a locum tenens physician, you are responsible to pay those expenses from your annual income while filing an income tax return every year.

Unlike full-time employees, you will have to give up 401K and health insurance. Hence, independent contractors like you can demand higher pay since you take away the burden of these additional costs.


As locum tenens jobs involves more out-of-pocket expenses, you can claim varied deductions to mitigate the tax burden. Here is the list that you can make use of:

1.      Health Insurance

Being your own employer, you should buy a health insurance policy either via a state exchange or private insurance provider. Pay the health insurance premium bill so that you can easily write off the amount you spent on the premium. By doing so, you can significantly reduce the tax amount by the end of the year.

2.      Retirement Savings Plan

Choose the right saving plan so that you can save more for your retirement. Some are tax-deferred while others are tax deductible. Pay attention to understanding the difference so that you can save more while filing the income tax return.

3.      Travel Costs

There are two possibilities:

The care facility you contract with will take charge of your travel costs, stay, and other expenses. In that case, they are not tax deductible since someone else is managing your costs.

On the other hand, if you have to pay these costs, you can pay and easily deduct them during the taxation period. You can deduct 100 percent of lodging and travel costs. Similarly, you can deduct 50 percent of meals, provided the contract duration remains only for less than a year.

Similarly, you can deduct automotive costs as well. It’s possible through the actual expenses or the mileage method. However, make sure to keep all the receipts for your expenses in place if there comes any audit.

4.      Education Expenses

As a locum tenens care provider, you should continue your education and stay updated with credentials and licenses. As they are considered business expenses, you can deduct them while filing the income tax return.

Final Thoughts

The taxation period is not at all a doom and gloom for locum tenens. Still, there are many potential deductions available for extensive contracts. However, you should be careful about the limit that you write off every year in case you want to stay away from red flags with the IRS. Make sure to talk to a qualified and experienced tax specialist so that they can help you with more possibilities of legalized tax deductions.

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