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A twist in the side gig conundrum

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  • Avatar YSH 
    Participant
    Status: Physician
    Posts: 107
    Joined: 01/11/2016
    Disability Insurance

    Usually people do W2 main gig and 1099 side gig, but does it matter if it’s the reverse?

    In this specific scenario, the per diem W2 gig is not offering me any fringe benefits, ie no retirement access, no medical benefits, nothing but hourly payment for X number of hours worked.  I anticipate that it will only make up about 10-20% of my entire income for the year.

    I plan to continue to devote > or = to 80% of my professional endeavor toward my 1099 gig.  At the minimum, I want to work enough at the 1099 gig to max out the solo 401K basket as both the employee and employer.

    The two jobs perform different functions, although both use my medical degree.  One will be purely clinic base and the other hospital base.  As for medical benefits, I piggyback onto my spouse’s corporate benefit plans.

    Any issues with this set up?

    Also, since the W2 job doesn’t offer me any benefit, will I still only be able to deduct the 1099 percentage of the professional expenses during tax time?

    #214504 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7326
    Joined: 01/09/2016

    It depends upon the expenses.

    • If you are paying for CME that will benefit you both in the W2 job and the 1099 work then, yes, you’re required to pro-rate based upon income from each. (Fortunately, the majority of the expense will be applicable to the 1099 income and, thus, deductible.)
    • If you have a home office from which you manage your 1099 business, that is 100% deductible against 1099 income.
    • Deductibility of expenses, iow, is determined on a case-by-case basis.

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

    #214515 Reply
    Liked by YSH
    Avatar YSH 
    Participant
    Status: Physician
    Posts: 107
    Joined: 01/11/2016

    This is what I thought also. Thank you for the reply and confirmation.

    Luckily, I try to pick CMEs that are focused on one or the other. This year, the CME is solely for hospital related MD work.  So, I guess still 100% deductible against my 1099 income.

     

     

    #214715 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7326
    Joined: 01/09/2016

    This is what I thought also. Thank you for the reply and confirmation.

    Luckily, I try to pick CMEs that are focused on one or the other. This year, the CME is solely for hospital related MD work.  So, I guess still 100% deductible against my 1099 income.

    Click to expand…

    Yes, that is how I would deduct.

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

    #214723 Reply

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