If you’re a nurse looking for more flexibility and an increase in pay, you may come across several per diem job opportunities. One of these is the 1099 nurse contract.
But what is a 1099 contract and how does it differentiate from W-2?
W-2 vs 1099 Nursing Gigs
The main difference between the two lies in the coverage.
If you go into the W-2 route, you’re an employee of a company. This simply means the company has some control of your schedule and the scope of your work. In return, the company provides you with income and benefits and provides help in filing your taxes.
On the other hand, a 1099 contract makes you an independent contractor. This means you are a self-employed nurse. You have control of your schedule, how you work, when you work, and who you work for.
There have been a lot of discussions lately about the 1099 nurse contract. In this article we will focus on that and break down the pros and cons of working as a 1099 employee.
Benefits of a 1099 Contract as a Nurse
This is one of the biggest draws of working as an independent nurse contractor. You have the freedom to work wherever or whenever you want.
This can be a big thing for those who want a good work-life balance. As you are in control of your schedule, you can work as much or as little as you want, depending on your situation.
You can travel to other places to fill in nursing shortages or build your own client/patient base in one location.
You have the freedom to choose your workplace. Many independent contractor nurses work in a variety of settings such as wellness clinics, hospitals, schools, and businesses.
Control of how you work
Compared to a W-2 employee, you have some degree of control over how you work. And this is how the IRS differentiates between an employee and an independent contractor.
As an independent contractor, your payer can only control or direct the result of your work, but not what you do or how you do your job.
In general, independent nurse contractors are paid 10 to 20 percent more than W-2 workers. You can also negotiate for higher pay as you’ll be doing your own taxes and paying for your own benefits. You can sometimes even set your own rates.
Cons of a 1099 Contract as a Nurse
Responsible for your own taxes
If you are working as an employee, your employer covers a percentage of your tax. Your employer is also responsible for helping you with your taxes.
As an independent contractor, not only will you be paying for all of your taxes, but you’ll also be responsible for figuring it out on your own. In many cases, 1099 nurses pay twice as much for social security and medicare taxes compared to W-2 nurses (these expenses are usually covered by the employer).
However, as a self-employed individual you will qualify to write off your business expenses. Here is a list of business expenses you might be able to write off.
To read more about self-employment taxes, check out the IRS post here.
If you’re going the 1099 route, it’s important to learn how to do your taxes or hire a good accountant.
Pay for your own benefits
Nurses working in the traditional setup are usually provided with benefits such as health insurance, paid training, paid vacations, sick leave, and overtime pay and bonuses. They are also usually covered by worker’s compensation, unemployment, and disability insurance.
You don’t have these benefits as an independent contractor. You’ll have to pay for these out of your own pocket. However, in some cases, you are able to write off your health insurance premium as a business expense if you are self employed.
Some clients may reimburse you for food and lodging expenses. There are also those who may offer to pay your malpractice insurance costs, but you have to double-check for the liability coverage.
Possibly find your own clients and patients
In a traditional employment setup, patients and/or clients are already given or done by your employer. As an independent contractor, you might have to secure your own clients or patients.
However, there are organizations such as National Nurses in Business Association or the National Association for Health Care Recruitment that can help you find jobs and/or transition to independent work.
These are just some of the things you have to weigh when deciding if you’re ready to become an independent nurse contractor.