New job as 1099?

[FutureInternist]

I have a full time hospitalist job that is 7on/7off.

I will likely pick up a part time job at a rehab for my week off (likely 3 days of the week, so 6 days a month total).

Since my full time job doesn’t allow us to work at another job as a W2 employee, I have to do it as a 1099.

I wouldn’t get any benefits at new job given that its part time and I already max out all my retirement plans with my full time job.

1. Does it make sense to make an LLC for what will basically be a low $ amount (enough to pay extra towards my home loan)?
I know one can deduct partial mortgage, cell phone bill etc for a home office but the added complicated tax return may not be worth it.
Additionally, they do provide tail coverage so would it still make sense to do as an LLC - Does that protect my house?
Also if I do do an LLC is that different from a “S corp”

2. From my understanding, the standard deduction which is what we take, does NOT count towards the partial deductions for mortgage etc. Is that correct?

3. From what I read, I can contribute up to 25% of income or $50,000 (whichever is lower) to yet another retirement account.
I will never get anywhere close to that amount but perhaps once house is paid off, then I can put more away in retirement accounts?

Thanks

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[dpmd]

I have a full time hospitalist job that is 7on/7off.

I will likely pick up a part time job at a rehab for my week off (likely 3 days of the week, so 6 days a month total).

Since my full time job doesn’t allow us to work at another job as a W2 employee, I have to do it as a 1099.

I wouldn’t get any benefits at new job given that its part time and I already max out all my retirement plans with my full time job.

1. Does it make sense to make an LLC for what will basically be a low $ amount (enough to pay extra towards my home loan)?
I know one can deduct partial mortgage, cell phone bill etc for a home office but the added complicated tax return may not be worth it.
Additionally, they do provide tail coverage so would it still make sense to do as an LLC - Does that protect my house?
Also if I do do an LLC is that different from a “S corp”

2. From my understanding, the standard deduction which is what we take, does NOT count towards the partial deductions for mortgage etc. Is that correct?

3. From what I read, I can contribute up to 25% of income or $50,000 (whichever is lower) to yet another retirement account.
I will never get anywhere close to that amount but perhaps once house is paid off, then I can put more away in retirement accounts?

Thanks

You don't take to have an llc to take home office deduction and other deductions. Those get handled on schedule c on your taxes as a sole proprietorship and then you decide between standard or itemized other deductions not related to your business of being a physician contractor. As far as 401k goes. The maximum employee contribution of 19500 or whatever it is this year is a max across all jobs. The employer contribution is limited to 25% of compensation or 58k for each job or you can do it as a sep IRA with same limits.

 

[FutureInternist]

You don't take to have an llc to take home office deduction and other deductions. Those get handled on schedule c on your taxes as a sole proprietorship and then you decide between standard or itemized other deductions not related to your business of being a physician contractor. As far as 401k goes. The maximum employee contribution of 19500 or whatever it is this year is a max across all jobs. The employer contribution is limited to 25% of compensation or 58k for each job or you can do it as a sep IRA with same limits.

As far as max contribution is concerned, I was under the impression that since you would be the employer as well as employee (if you did LLC) then you could make the 25% contribution?
Or maybe that is what you are saying and I am misunderstanding

 

[dpmd]

As far as max contribution is concerned, I was under the impression that since you would be the employer as well as employee (if you did LLC) then you could make the 25% contribution?
Or maybe that is what you are saying and I am misunderstanding

You are the employer and make that contribution regardless of if you have an LLC. I just do sole proprietorship because being an LLC means more expenses and costlier tax prep.

 

[FutureInternist]

You are the employer and make that contribution regardless of if you have an LLC. I just do sole proprietorship because being an LLC means more expenses and costlier tax prep.

Thanks for the help so far

Does LLC provide any extra asset protection vs an S Corp?

I have an appointment with my tax guy later this week so helps to have some info handy.

 

[dpmd]

Thanks for the help so far

Does LLC provide any extra asset protection vs an S Corp?

I have an appointment with my tax guy later this week so helps to have some info handy.

Your assets will be most at risk from malpractice which incorporating in any form won't protect your personal assets from.

 

[RangerBob]

Your assets will be most at risk from malpractice which incorporating in any form won't protect your personal assets from.

I want to second this, as a lot of people really misunderstand it. A sole proprietorship protects you just as well as an LLC, S-Corp, C-corp, or employee of a group/hospital. As in they all provide no protection from medical malpractice. You are always personally liable for medical malpractice, regardless of your business setup.

The only way you get a liability benefit from these other structures is if you have employees and/or a physical clinic space to see patients. That way if your employee sexually harasses sometimes, your business is liable but not you personally. Same if they trip and fall in your waiting room.

So as a solo hospital-based doc with no employees, I took the cheapest and simplest option--sole proprietor. Much simpler, cheaper, easier.

 

[dpmd]

I want to second this, as a lot of people really misunderstand it. A sole proprietorship protects you just as well as an LLC, S-Corp, C-corp, or employee of a group/hospital. As in they all provide no protection from medical malpractice. You are always personally liable for medical malpractice, regardless of your business setup.

The only way you get a liability benefit from these other structures is if you have employees and/or a physical clinic space to see patients. That way if your employee sexually harasses sometimes, your business is liable but not you personally. Same if they trip and fall in your waiting room.

So as a solo hospital-based doc with no employees, I took the cheapest and simplest option--sole proprietor. Much simpler, cheaper, easier.

Yeah, and as a person who leases overhead (office space, employees, billing) I wouldn't be the entity any patient coming in to the building I don't own or talking to an employee I don't employ would think of suing first but I have commercial liability insurance for any that name me too.

 

[FutureInternist]

Thanks for all the replies.
Did NOT know that medical malpractice was not covered in these corporation structures.
May be time to put the house and cars in wife’s sole name 🤔🤔

 

[robellis]

Thanks for all the replies.
Did NOT know that medical malpractice was not covered in these corporation structures.
May be time to put the house and cars in wife’s sole name 🤔🤔

Malpractice insurance covers medical malpractice, I’m not sure why people are paranoid about being sued, it’s not a big deal let the company fight it or settle you won’t really be injured in any way financially

 

[FutureInternist]

Malpractice insurance covers medical malpractice, I’m not sure why people are paranoid about being sued, it’s not a big deal let the company fight it or settle you won’t really be injured in any way financially

Other people have told me the same thing.

Going to go w/ sole proprietor and just do a W2 from my usual job and 1099 from this side gig.

Thanks

 

[dpmd]

Other people have told me the same thing.

Going to go w/ sole proprietor and just do a W2 from my usual job and 1099 from this side gig.

Thanks

Nice thing is whatever stuff your W2 job doesn't cover that you also use at your 1099 job (like license, dea, malpractice) you can write off on your schedule C when you file next year. And don't sweat the estimated taxes too much. You can try and calculate as you go but as long as your withholding from the W2 job are at least equal to the total tax last year then you won't get a penalty for not paying the estimates (just make sure you have enough money to cover the bill come april) and then for subsequent years you can calculate what you should pay based off prior year numbers.