I am looking to become a full time locum hospitalist and thinking about starting an LLC/S Corp as a locum. I am finding conflicting information out there saying that it might be a good idea to start an LLC but not S corp as a locum hospitalist since S corp will flag you for a tax audit by the IRS. Furthermore, if you are traveling to different states that will lead to complication with your tax filling process under an S corp setting. Any locums out there that started an single member LLC/ S corp or have any advise on this matter? Also any advise on finding a good CPA who will be familiar with a locum hospitalist life style?
Single member LLC/ S corp as a locum hospitalist
- Thread starter tweedie
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tweedie, Hi!
When I first started out, I talked to my CPA about all the different options (LLC vs Corp vs Soleproprietor), he told me that Sole proprietor would work just fine. And I think you are right: when working in multiple states, S-Corp bookkeeping/tax reporting would be more complicated.
Now, there’s a couple of misconceptions about why you may want to form an LLC and/or S-C/Corp:
1 – As a locum doc you DON’T have to LLC or S-Corp to deduct your professional expenses (e.g. CME fees, buying a printer or laptop, phone bills etc.). All sole proprietors who get 1099 income can do that.
2 – Another misconception is that you need to form an LLC to protect your personal assets in case of a malpractice claim is brought against you and the malpractice insurance doesn’t cover all the payouts. Here’s a good article that covers it: Sheltering Personal Assets from Medical Malpractice Liability Is Overrated - ACEP Now
If you don’t have time to read it, the bottom line is: it’s highly unlikely that this will happen hence forming LLC as an “asset protection” strategy is probably overrated.
Personally, I file my locum taxes as a sole proprietor, I've been a full-time locum hospitalist for about 6 years now.
I hope it helps!
When I first started out, I talked to my CPA about all the different options (LLC vs Corp vs Soleproprietor), he told me that Sole proprietor would work just fine. And I think you are right: when working in multiple states, S-Corp bookkeeping/tax reporting would be more complicated.
Now, there’s a couple of misconceptions about why you may want to form an LLC and/or S-C/Corp:
1 – As a locum doc you DON’T have to LLC or S-Corp to deduct your professional expenses (e.g. CME fees, buying a printer or laptop, phone bills etc.). All sole proprietors who get 1099 income can do that.
2 – Another misconception is that you need to form an LLC to protect your personal assets in case of a malpractice claim is brought against you and the malpractice insurance doesn’t cover all the payouts. Here’s a good article that covers it: Sheltering Personal Assets from Medical Malpractice Liability Is Overrated - ACEP Now
If you don’t have time to read it, the bottom line is: it’s highly unlikely that this will happen hence forming LLC as an “asset protection” strategy is probably overrated.
Personally, I file my locum taxes as a sole proprietor, I've been a full-time locum hospitalist for about 6 years now.
I hope it helps!
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Youll get better information if you post this question on the WCI or Bogleheads forums than you will on here. That being said free internet information should not replace legal/tax advice from a qualified professional since variations on state laws and personal situations can greatly influence these calculations.
Thank you locumguy and chessknt87 for the information. Locumguy your information did clarify some of my questions so def appreciate the input! Chessknt87 you are right there are variations on state laws so I will def look into that as well!