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1099 deductions

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  • Avatar daman42886 
    Participant
    Status: Physician
    Posts: 19
    Joined: 08/27/2017

    I’m a new attending and W2 employee at a private practice that I started with in August. I also became interested in telemedicine around October/November and have made a small amount of 1099 money through that on the side.

    As it was my first six months of being an attending I did pay for a lot of unreimbursed expenses during the 2017 calendar year including state licensing fees, DEA license, and board examination fees. This ended up being a good chunk of change that my employer did not reimburse. Can I deduct these expenses on Schedule C even though those licenses were necessary for both my W2 and 1099 income? Per this blog post, it seems like that might be OK: https://www.whitecoatinvestor.com/tax-savings-for-residents/. However, I am somewhat hesitant because then my expenses would be more than my telemedicine 1099 income.

    Also, any specific deductions people are using for telemedicine work? Home office, etc.?

    #95067 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6901
    Joined: 01/09/2016

    You need to prorate your expenses between 1099 and W2 income. Any expenses incurred specifically for 1099 income, such as home office, can be deducted 100% on schedule C. Expenses such as home computer, internet cost, etc. should be prorated between personal and business use. Ex: if you use your home computer 50% personal and 50% for telemedicine, then you can depreciate 50% of it on schedule C.

    Of course, if telemedicine actually is costing you more than you’re making from it, you might want to find a different side gig.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #95079 Reply
    Liked by MochaDoc
    Avatar ebotrd 
    Participant
    Status: Physician
    Posts: 14
    Joined: 10/25/2018

    Don’t mean to hijack OP’s post, but I have a 1099 question as well.

    I’m a full time military doc (W2), but have also started some part-time telemedicine moonlighting work that’s paid 1099.  I’ve never had 1099 work before, but would like to sock away as much of the income I can into retirement accounts.  Could generous forum members list for me any/all strategies they might recommend for socking away this $$?  I expect to make anywhere from $20-$70k per year 1099 depending on your answers.

    We have a rental property and do a Schedule E as sole proprietor owners, but haven’t ever needed Schedule C before – looks kind of similar but much more detailed/complicated than our mom-pop rental Schedule E.

    Tangentially related, I have heard of the “Hummer loophole” for Independent Contractors/business owners and have been eyeing a vehicle that qualifies for it.  Could my new 1099 telemedicine work somehow qualify to take advantage of this?  I guess it’s a Section 179+bonus depreciation thing.  I dunno, I commute to my W2 day job but then need to commute back to my (home) office to do my telemed work?  Reaching I know.  Thank you.

    #179944 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6901
    Joined: 01/09/2016
    Earnest refinancing bonus

    Tangentially related, I have heard of the “Hummer loophole” for Independent Contractors/business owners and have been eyeing a vehicle that qualifies for it.  Could my new 1099 telemedicine work somehow qualify to take advantage of this?  I guess it’s a Section 179+bonus depreciation thing.  I dunno, I commute to my W2 day job but then need to commute back to my (home) office to do my telemed work?  Reaching I know.  Thank you.

    Click to expand…

    Your drive to and from work is the commute. Any miles you need to drive outside of that for telemedicine can be written off. I doubt telemedicine requires much travel unless you’re driving to a conference or the bank. Beyond that, business expenses must be ordinary and necessary to qualify as tax deductions.

    We once worked with an RV dealership that bought Hummers and we wrote off the business use, but they used those Hummers to take vehicles to shows. Personal use was added back to their W2’s.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #179959 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6901
    Joined: 01/09/2016
    I’m a full time military doc (W2), but have also started some part-time telemedicine moonlighting work that’s paid 1099.  I’ve never had 1099 work before, but would like to sock away as much of the income I can into retirement accounts.  Could generous forum members list for me any/all strategies they might recommend for socking away this $$?  I expect to make anywhere from $20-$70k per year 1099 depending on your answers.

    Click to expand…

    Read these articles in this order:

    Small Business Retirement Plans, Part 2: SEP IRAs

    Small Business Retirement Plans, Part 3: 401k’s

    Which is Better: SEP or Solo-k?

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #179960 Reply
    Avatar ebotrd 
    Participant
    Status: Physician
    Posts: 14
    Joined: 10/25/2018

    Thanks, Johanna!

    I doubt hummer loophole would help me much anyway as I don’t drive a lot for IC work.  I do mix the 1099 telemed income with another 1099 physical clinic moonlighting gig that requires travel, but only a few thousand miles per year at most so far.  Sounds like i’d need to be driving all the time to get much substantial tax benefit from a large truck type vehicle.

    PS – I have an EIN already for a rental property we have where we hire some minimal part-time help.  Can I use the same EIN for physician 1099 work, or are you supposed to have different EINs for each side hustle?

    Thank you.

    #182009 Reply

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