What nurses and nursing assistants need to know about taxes before accepting per diem shifts.
Do you hate having to pay large sums of money in taxes at the end of the year? Are you confused as to why you owe so much every tax season?
The freedom and flexibility to choose when and where you work is the easy part of per diem nursing. But when it comes to getting the pay you deserve, there are choices nursing professionals need to make to ensure they keep as much of their hard-earned money as possible.
Per diem nurses are hired as either independent contractors (1099 status) or employees (W2 status). While the pay rates for each type of shift can vary, it’s important to understand the tax differences. Let’s look at what 1099 contractors are on the hook for when it comes to taxes.
As a 1099 contractor, you are responsible for:
- Filing income to the IRS
- Paying Self-Employment Taxes (that cover Social Security and Medicare)
- Paying income taxes
So, what does that really mean for your bank account?
1. If you’re a 1099 contractor, your employer isn’t withholding taxes as a full-time employer would. Of course, that doesn’t mean you’re off the hook. You will be paying that money back during tax season.
The question to ask yourself is, will you be prepared to pay this money back? Everyone wants more money in their paycheck. But this isn’t more of your employer’s money. It’s money that you will owe to the government the following year.
2. You will have to cover the Social Security and Medicare taxes that a W2 employer would typically pay. A W2 employer covers the “employer-paid” portion of your Social Security and Medicare taxes throughout the year, which is a benefit to the employee. For 1099s, the responsibility for those “employer” taxes shifts to the contractors, which can reduce benefits and increase taxes.
Do you have questions about taxes? Let us help. You can reach out to your IntelyPro Success Manager or our Care Team at any time!