[McCracken]

Wife is a nurse practitioner – staring to look at 1099 jobs. What should we know/consider? She can be on my healthcare and I know we will be on the hook for more social security and Medicaid taxes.

Would you say if you’re making x at a w2 job you need to be making x + y as a 1099? To cover extra expenses and the lack of benefits?

[Tiffany]

Just have to do the math to make sure it’s worth it. I was at a FT healthcare job for 19 years and became a traveler 2 years ago because I was burned out and wanted more time off. The things I am not getting now are.

– Employee paid healthcare plus $800 contribution to HSA as long as I pick the high deductible plan (the free to me one)

-37 paid days off (between PTO and holidays)

-profit sharing into 401k which usually amounted to about 4.2%
-ST AND LT disability insurance.

Probably more benefits than that that I’m not thinking of.

It was not a financial decision for me because financially I was better off at the full time with benefits job, but the freedom has given me a much needed break and I am able to save enough while I’m working to take time off.

Having a spouse to cover health care is a total game changer in this scenario in my opinion. (Anybody wanna get married?

[Abigail]

I’ve been a locums CRNA for 15 years. Your wife needs to talk to other travel NPs doing what she’s doing. Make friends and really pick their brains.

My contracts look like physician contracts. RN contracts look very different and they are often technically W2s of the agency. Where does your wife fall on that spectrum? I only know my gig, which is highly specialized.

I will say that, if you’re spending most of your paycheck, a W2 about 30% less than a 1099 is equivalent.

But if you are a super-saver making a lot of $$$, nothing can touch 1099. No W2 will ever come close.

Between my solo 401k, my HSA, and my cash balance plan, I socked away 186k pre-tax this year. That massively lowers my tax bill in my highest earning years.

Additionally, I did 44k in Roth (mega backdoor and regular backdoor). These tools are simply not accessible to W2 employees.

I would hemorrhage money on taxes if I made what I’m making right now as a W2.

[Sean]

I’d probably want around 30-40% more to make up for lack of benefits and taxes. Remember you’re also getting some extra tax deductions most likely.

[Destiny]

I made more money traveling as an RN than a locum NP. If she wants more money and more flexibility travel RN gigs may pay more.

[Luke]

Add 20
Percent to your salary minimum. Should actually be more if you included healthcare.

[Tricia]

My spouse has been 1099 several years over our 15 together. He pretty much puts 20% or so into a separate account each time he is paid to then pay in quarterly taxes.

Otherwise you can be hit owing 20k or so in taxes and its really not fun! We work with our cpa to have the forms and payment coupons ready for the year.

[Jordana]

I’m an NP of 17 years. I’m very happy to have left my salaried position, but do miss my benefits and am still on cobra until I hire someone this summer or sooner.

Is she looking to open her own small office, shift careers or take a break?

[Chance]

Definitely talk to a CPA and opening an S-Corp. I’m planning to go 1099 immediately after I graduate CRNA school.

[Sonja]

For taxes, I use 27% federal and 6% local. For healthcare, I use 14k annually for a HDHP.

Plus, dental because it’s not included in the health plan of course.

[Kaylyn]

Exclusive of benefits, the difference tax-wise is 7.65%. This is the employer portion of FICA that you’ll now be responsible for.

It will seem like you’ll owe much more in tax since you’re responsible for remitting federal/state withholding and the employee portion of FICA which would typically be pulled from your pay but the math isn’t actually all that significant.

There are other calculations that come into play as well (20% income deduction for QBI, 1/2 SE tax deductions, etc.) but this is the biggest piece.

Again, this doesn’t take into account benefits which will vary based on what you’re giving up and what you need.

[Katarina]

I’m a PA and changed from a W2 role over to a 1099 role a couple of years ago.

Recommend she make at least 30% – 40% more in her 1099 role than a comparable W2 role to help offset lack of benefits and some extra taxes (though she would also get to write-off some business expenses).

[Author]

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