Full time job, contract work and health insurance

[dhageremtp]

Any one do contract work aside a full time gig? Wondering how you do your health insurance? As an independent contractor could you take your own plan and use the premium as a tax deduction?

[UGoLong]

I used to be self-employed before becoming a PA. If you bought your own health insurance, it was deductable on your taxes and probably still is.

 

A number of other expenses actually came off the top - that is, were subtracted from your earnings before taxes are calculated. On the other hand, I was responsible for both the employee and employer's Social Security tax payments, which were about 16% at the time. I had my own 401(k) retirement plan that I could put much more in (if and when I wanted to) than you could either an employer's 401(k) or your own IRA.

 

You might want to talk with an accountant before you take the leap. Good luck!

 

Sent from my iPad using Tapatalk HD

[dhageremtp]

I was more curious if anyone else has done this?

[Boatswain2PA]

While there are a lot of really smart folks on these boards, I would NOT get specific tax advice from anyone but your accountant. 

I do full time contract work, but I don't deduct my health care premiums.  My accountant did say that I could start a flex account and fund it, but I haven't been able to find a bank that does that yet.

While your taxes cost you a bit more, you get to deduct a LOT of business expenses, like 52.5 cents for every mile driven for business, malpractice, I have a home office I use exclusively for business so I get to deduct a percentage of my home utilities, scrubs, shoes I wear exclusively for work. 
 

[gbrothers98]

So you want to deduct your health insurance premiums from your full time job from your income as a contractor on the side?

Likely not. But I agree with the bosun that you should check with your tax advisor first.

The IRS is funny about contractors. Not haha funny either. You really need to have all your ducks in a row. I think your chances of audit become very real when you start deducting expenses from your income and there are real standards that have to be met such as for a home office. 

I think it is also hard to be considered a contractor when you work a full time gig in the same field such as work full time in an FP office and pick up ED shifts on the side.

If you find out differently, please post here since there are many PAs who at one time or another pull a part time or per diem gig on the side. But as was explained, you have to maintain malpractice insurance, possibly maintain other insurances too such as workmens comp. Paying into SS along with quarterly taxes is also a consideration.

Will you be any better off financially vs working as a part time or per diem employee?

G Brothers PA-C

[Boatswain2PA]

There are a lot of different criteria that must be met to be a contractor. Some of them (I believe) include having more than one work location, and being able to set your own schedule. I'm sure there are hundreds more rules....

[dhageremtp]

I already do the contract work and have for 2 years.  I would drop health insurance at my full time work and pick it up on my own.  I did ask an accountant and he was unsure, and is researching it.  I was looking to see if anyone here has done this.  I do keep track of miles logged, meals, scrubs, etc that I have to have for work purposes.  I do FP m-f and do some ED locum work on weekends.

 

I am not looking for specific tax advice.

[PA-Larb]

I am an independent contractor for an ER group. I have always used my health insurance premiums as a tax deduction. Perfectly okay.

[ventana]

I am an independent contractor for an ER group. I have always used my health insurance premiums as a tax deduction. Perfectly okay.

 

 

you will loose if you are audited

 

If you are using the groups/hospital equipment and their staff to facilitate your work flow you are an employee.....  have seen a few companies and medical professionals go through audit and I have yet to see them win one.......  

 

You have to have control of your own schedule - meaning you can pick any time of day, any day of the week to see your patients - simply by having an assigned shift rules out an independent contractor status, then you have to use your own equipment (nope can't use that otoscope on the wall, or the suture kits.....)

 

Sort of impossible to meet these thresholds....  also be aware it is not just the IRS looking at this issue but also the state for unemployment insurance and other issues ie workers comp insurance. 

 

The only good news is it is pretty much the employers liability - they get caught and they get fines, so not much liability on the employee but it goes to show the amount of risk they will accept to try to make you not an employee (which is a factor of how much money they save!)  

[Boatswain2PA]

Can you use their CT machine? Their exam table? Their front door??

 

I wouldn't be surprised if what you say is absolutely true, but in the flip side I don't know a single contractor who does it the way you say we have to.

 

I set my own schedule, and am credentialed in 8 different hospitals, and get 1099s. If that isn't a contractor, then I Dont know if anyone can be.

[problem child]

you will loose if you are audited

 

If you are using the groups/hospital equipment and their staff to facilitate your work flow you are an employee.....  have seen a few companies and medical professionals go through audit and I have yet to see them win one.......  

 

You have to have control of your own schedule - meaning you can pick any time of day, any day of the week to see your patients - simply by having an assigned shift rules out an independent contractor status, then you have to use your own equipment (nope can't use that otoscope on the wall, or the suture kits.....)

 

Sort of impossible to meet these thresholds....  also be aware it is not just the IRS looking at this issue but also the state for unemployment insurance and other issues ie workers comp insurance. 

 

The only good news is it is pretty much the employers liability - they get caught and they get fines, so not much liability on the employee but it goes to show the amount of risk they will accept to try to make you not an employee (which is a factor of how much money they save!)  

 

YES ventana, I just started a new thread called "1099 sucks or 'does anyone want to start a union'?" (I think; look above). 

 

are you in MA? I find 1099 work as a PA (which is sprouting up EVERYWHERE via recruitment agencies) is an absolute rip-off, and does not adhere to the law in terms of classification of a 1099: 

 

http://www.mass.gov/ago/doing-business-in-massachusetts/labor-laws-and-public-construction/massachusetts-independent.html

 

I will not work for any agency offering 1099 work bc they are turning us into scabs and making it hard for agencies who offer above-board packages to compete.

 

union anyone? I'm serious. I'm done with being screwed.

[problem child]

Can you use their CT machine? Their exam table? Their front door??

 

I wouldn't be surprised if what you say is absolutely true, but in the flip side I don't know a single contractor who does it the way you say we have to.

 

I set my own schedule, and am credentialed in 8 different hospitals, and get 1099s. If that isn't a contractor, then I Dont know if anyone can be.

 

are you "free from direction and control" (another part of the 'the three prong test' for 1099s) in the course of performing your duties? ie, completely independent, no SP, no attendings to consult with and make treatment plans? does the hospital not tell you what patient needs are to be addressed that day? if the hospital doesn't, do you? do you admit your own patients to your own service? that is (PART of) what precudes PAs from working as "independent contractors", bc in my experience, I don't think PAs are allowed to practice this way.

[Boatswain2PA]

Of course not, but I think that rule couldn't be applied to ANY contractor, no matter what the profession.  When I hire a contractor to lay carpet on a rental property, he is certainly isn't "free from direction and control" either.

 

I'm not arguing with you about the rules, because I certainly don't know them.  I just don't do what my accountant tells me not to do. 
 

The way I think about it is this way:  If the government wants to get you, you're screwed.  If a cop wants to arrest you, I can guarantee you they can find a reason to do so.  If the DOJ/IRS/EPA/HHS/(etc ad nauseum) wants to get you, they can. 

[problem child]

Any one do contract work aside a full time gig? Wondering how you do your health insurance? As an independent contractor could you take your own plan and use the premium as a tax deduction?

 

why don't you just get your health care through your full-time job?