Tax Planning for Locum Tenens & 1099 Physicians
Coordinate your assignments, entities, tax payments and retirement decisions with an advisor who reviews the whole picture.
A tax plan for the way you actually practice
Locum tenens physicians may receive income from several agencies, work in multiple states and combine hospital wages with independent-contractor earnings. AE reviews those income streams together so entity, payment and retirement decisions reflect the whole household.
This service is for full-time locums, employed physicians adding 1099 assignments and doctors transitioning between practice models. Start before signing a new contract, changing work states or making an entity election when possible.
The decisions we connect
W-2 and 1099 income
Map each contract and payee, reconcile agency statements and business expenses, and coordinate self-employment income with payroll withholding and other household earnings.
Entity economics
Compare the administrative and state costs of an entity election with its projected benefits. An S corporation requires payroll and supportable compensation; it is not automatically the best answer.
Multistate work and travel
Review residence, work locations, assignment dates, tax-home facts and reimbursements. Establish which state sourcing, credits and filing obligations need analysis.
Retirement and payment planning
Coordinate available plans with compensation, other employer plans, employee eligibility and cash flow. Build a payment forecast that can change when assignments or profitability change.
Build your physician tax planning file
- Current and proposed agency contracts, payee/entity details and recent W-2 and 1099 records.
- Assignment calendar by work state, home location, travel costs and reimbursement policies.
- Prior federal and state returns, current books, estimated-payment confirmations and spouse income context.
- Retirement plan documents and year-to-date contributions at every employer or business.
- Entity election records, payroll reports, professional expenses and ownership interests in rental property.
Tax home and legal residence are not interchangeable concepts. Temporary-assignment and travel treatment depend on the facts. A contract describing a payment as a stipend does not settle its tax treatment.
Example: hospital employment plus locum assignments
Illustrative planning scenario. A physician retains a W-2 hospital role and adds 1099 assignments in two states. Before recommending an S election, the review models expected profit, reasonable wages, payroll administration and state costs. Retirement contributions are coordinated with the existing employer plan.
The resulting plan can identify payment adjustments, documentation needs or reasons to keep the current structure. Each recommendation should specify assumptions, an action date and an implementation owner. No savings figure is promised before the analysis.
Define the physician engagement
Written planning outputs
Confirm the income map, entity comparison, payment forecast, state review and action list that your facts require. The scope may be focused on one decision or several connected workstreams.
Preparation and implementation
Identify whether personal and entity returns, payroll setup, bookkeeping, retirement-provider coordination or notices are included. Planning recommendations do not automatically authorize those separate services.
Fees depend on assignment complexity, entities, jurisdictions and usable records. Review AE’s published scope and pricing, then obtain a written quote for the physician engagement and any additional implementation work.
Locum tenens tax planning questions
Should every 1099 physician elect S corporation status?
No. Compare expected profit, supportable compensation, state taxes, payroll and filing costs, retirement effects and contract arrangements. A projection should explain when the additional structure is worthwhile.
Can I deduct travel whenever an assignment is away from home?
Not automatically. Review your tax home, the nature and expected duration of the assignment, reimbursements and substantiation. Your mailing address alone does not establish eligibility.
Does agency withholding cover my entire tax bill?
Withholding and estimated payments need to be compared with total projected tax. Several income sources, spouse income and multistate work can change the forecast.
Can the engagement include rental property planning?
Discuss ownership, operations and available records at intake. Physician income and rental activity should be coordinated, but rental losses are subject to their own qualification and limitation rules.
Resources for your next assignment
Primary references: IRS self-employed tax center, Publication 463: travel and expenses and Publication 560: small-business retirement plans.
Start with the decision and the records.
Tell us the entities, properties or income sources involved, the tax years to address and any approaching deadlines. We will discuss fit and define the work in writing before an engagement begins.
Published by AE Tax Advisors · Updated October 24, 2026. General educational and service information. Your signed engagement defines the work, responsible professionals and fees. Tax treatment depends on your facts and the applicable tax year.
Learn about our team and editorial process. Provide sensitive records through the approved client portal after intake.