Nurses around Atlanta, GA are often offered positions with a 1099 tax status, otherwise known as an independent contractor. The main selling point of the 1099 status is the freedom it provides, since contractors are considered their own business entity and can often set their own schedules. However, working as a 1099 independent contractor isn’t the best choice for nurses — it’s actually taking money out of your paycheck because of the tax burden!
Let’s take a closer look at the way the 1099 status affects your taxes:
Income Tax
Just because you’re an independent contractor doesn’t mean you can get away without paying income tax. Employees working under 1099 status won’t have taxes taken out of their paychecks throughout the year. Instead, they must pay a lump sum when filing their income tax return, or pay in quarterly installments throughout the year. This can be a heavy burden come tax season!
Social Security Tax
When you’re a W2 employee, your employer takes care of Federal Insurance Contributions Act (FICA) taxes. That means, for one, your employer pays their share of Social Security taxes, rather than putting that burden on you. 1099 independent contractors, however, are left to pay the Social Security tax themselves.
Medicare Tax
The same is true for the other half of FICA taxes: Medicare tax. Your employer won’t pay it if you’re a nurse employed under 1099 status — you’ll end up paying this part of the FICA taxes once you file your tax return.
Avoid The 1099 Tax Status
On the whole, nurses employed as 1099 independent contractors will owe much more in taxes than their W2 counterparts. Luckily, BOS Medical is here to help. We place Atlanta, GA-based nurses in full-time salaried positions that allow them to avoid the tax drawbacks of the 1099 status. Call us today at 706-775-8907, or visit us online, to get started.
