Healthcare professionals who received 1099 income during 2025 face an April 15, 2026, filing deadline for both their return and any taxes owed. Filing an extension postpones only the return deadline, not the payment obligation.
The most common compliance failures involve underpaid quarterly estimates, missed opportunities to elect entities, and multi-state filing requirements for locum tenens work. If you transitioned from W-2 to 1099 status during 2025, the shift created new tax responsibilities that require attention before the April deadline.
This guide addresses the primary tax considerations for physicians, nurse practitioners, CRNAs, anesthesiologists, and other self-employed healthcare workers filing during the April 2026 season.
The IRS requires most self-employed taxpayers to pay taxes throughout the year through quarterly estimated payments. For the 2025 tax year, the underpayment interest rate was 7% annually, compounded daily.
Safe harbor rules protect you from underpayment penalties if you paid at least 100% of your prior year tax liability through withholding and estimated payments. Taxpayers with adjusted gross income above $150,000 must meet a 110% threshold. Healthcare workers who transitioned from W-2 employment mid-year often underestimate their liability because they calculate quarterly payments based on partial-year self-employment income.
Many physicians discover during tax filing that their quarterly payments covered only a portion of their actual liability. A CPA for 1099 doctors and other healthcare professionals can review estimated payments before the return is submitted to reduce penalties and unexpected balances.
Form 2210 provides an annualization method that may reduce penalties by demonstrating that income arrived unevenly during the year. For physicians who started locum tenens work partway through 2025, the IRS outlines quarterly payment expectations in Publication 334.
Your entity structure determines self-employment tax exposure. A sole proprietorship filing Schedule C subjects net earnings from the business to self-employment tax. The combined rate is 15.3%, although the Social Security portion applies only up to the annual wage base.
S-Corp election allows income splitting between salary and distributions. Only the salary portion is subject to payroll taxes, while distributions are exempt from self-employment tax. A healthcare professional earning $300,000 annually who sets a reasonable salary of $150,000 could reduce exposure to self-employment tax on the remaining income, depending on the final compensation determination and business expenses. For a detailed breakdown of S-Corp requirements and timing, see our S-Corp election guide for 1099 doctors.
The IRS’s reasonable compensation requirement prevents salary minimization. Setting compensation below market rates for your specialty and geographic area triggers audit exposure. Anesthesiologists, CRNAs, and physicians receive particularly close scrutiny because their earning potential is well documented through industry compensation surveys.
S-Corp status is most advantageous when net earnings exceed $80,000, as it reduces self-employment tax liability while the administrative costs remain manageable.
If you missed the deadline to elect S-Corp status for the 2025 tax year, you may still have planning opportunities for the current tax year. Entity elections, compensation planning, and estimated tax adjustments can affect the taxes you owe next April. If you are evaluating this structure for the first time, speak with a CPA for 1099 healthcare professionals to determine whether an election makes sense for your situation.
If you are weighing entity options for the first time, our guide to setting up a 1099 medical practice covers comparisons of sole proprietorship, LLC, and S-Corp.
Self-employed healthcare professionals deduct ordinary and necessary business expenses from gross income before calculating self-employment tax. The categories that apply most frequently include professional licensing, continuing education, malpractice insurance, assignment-related travel, and qualified home office expenses.
Travel and per diem for locum tenens work. Transportation, lodging, and meals at 50% of actual cost qualify when working away from your tax home on temporary assignments expected to last less than one year. The IRS publishes per diem rates by city as an alternative to itemized meal tracking.
Health insurance premiums. Self-employed individuals deduct premiums paid for themselves, spouses, and dependents as an adjustment to gross income. This reduces both income tax and self-employment tax liability. The deduction appears on Schedule 1 of Form 1040 and is calculated using Form 7206.
Retirement contributions. For 2025, SEP-IRA contributions can reach 25% of net self-employment earnings, up to $70,000. Solo 401(k) plans allow contributions from both the employer and the employee. For the 2025 tax year, the employee elective deferral limit is $23,500.($31,000 if age 50-59 or 64+, and $34,750 for ages 60-63). The employer may also contribute up to 25% of compensation toward profit sharing. Plus, the employer offers profit sharing of up to 25% of compensation. The combined limit, excluding catch-up, is $70,000.
Independent contractors frequently overlook legitimate deductions or fail to maintain documentation. Our breakdown of common tax mistakes for 1099 doctors identifies the most common oversights.
Section 199A provides a deduction of up to 20% of qualified business income. Healthcare qualifies as a specified service trade or business (SSTB), which triggers income-based phase-outs.
For the 2025 tax year, single filers with taxable income below $197,300 receive the full 20% deduction, with a complete phase-out at $247,300. Married couples filing jointly face thresholds of $394,600 and $494,600. Many physicians use this window to work with a CPA for 1099 healthcare professionals to verify estimated payments and avoid unexpected tax balances. At the time this article was written, the thresholds above reflect the rules applicable to the 2025 tax year.
The One Big Beautiful Bill Act (H.R. 1), signed into law on July 4, 2025, made the QBI deduction permanent and expanded the phase-in range. Starting in 2026, the phase-in range increases to $150,000 for married filing jointly (up from $100,000), raising the upper threshold to $544,600. The Act also introduces a $400 minimum deduction for active business owners with at least $1,000 of QBI. Our H.R. 1 tax update for 1099 healthcare workers covers the full implications.
For taxpayers near the phase-out threshold, retirement contributions and other above-the-line deductions can reduce taxable income enough to preserve a partial QBI deduction. For more information on Section 199A rules, see IRS Topic No. 409.
Locum tenens physicians and traveling nurses who worked in multiple states during 2025 typically owe nonresident returns in each state where services were performed. Income allocation rules vary by state.
Most states use a days-worked ratio, while some require allocation based on revenue generated from patients in that state. Georgia residents working in other states can claim a credit for taxes paid elsewhere, reducing double taxation. The credit calculation appears on Georgia Form IT-511, Schedule CR. Georgia applies a flat 5.19% income tax rate for the 2025 tax year.
For details on Georgia nonresident withholding and credits, see the Georgia Department of Revenue. Detailed records of days worked by location simplify both allocation calculations and state audit responses. Assignment contracts, travel receipts, and facility schedules provide documentation if state tax authorities request verification.
The federal filing deadline for individual returns is April 15, 2026. Georgia follows the same deadline. Filing Form 4868 extends the federal deadline to October 15, 2026; Georgia automatically recognizes the federal extension.
An extension provides additional time to file but does not extend the time to pay. Tax owed remains due on April 15. Interest accrues on unpaid balances from that date, and a late payment penalty of 0.5% per month applies until the balance is paid. If you have not yet finalized your 2025 numbers, filing an extension can provide time to review deductions, retirement contributions, and decisions on entity structure before the return is submitted. Many physicians use this window to work with a CPA for 1099 CRNAs and other healthcare professionals to verify estimated payments and avoid unexpected tax balances.
Several retirement account contributions can be made after December 31, 2025, and still reduce your 2025 tax liability.
Traditional and Roth IRAs: Contributions due by April 15, 2026. The 2025 limit is $7,000 ($8,000 if age 50+).
SEP-IRA: Contributions can be made until your filing deadline, including extensions, which means October 15, 2026, if you file Form 4868. A healthcare professional with $300,000 in net self-employment income could contribute up to $58,500 (approximately 20% after the self-employment tax deduction).
Solo 401(k): Employee deferrals must be designated by December 31 of the tax year, but employer profit-sharing contributions can extend to the filing deadline. For self-employed individuals, the employer contribution often represents the larger portion.
Self-employed healthcare workers encounter filing scenarios that consumer tax software handles poorly. Multi-state allocations, entity elections, estimated payment calculations, and retirement contribution optimization involve interdependencies that the software does not flag.
Complexity increases once you add multiple 1099 payers, form an LLC or S-Corp with payroll and reasonable-compensation requirements, work across state lines, or need QBI and health insurance deduction coordination. Our guide on when to hire a CPA for 1099 healthcare professionals outlines the decision criteria.
At Accolade Accounting, we work with physicians, CRNAs, anesthesiologists, and locum tenens professionals to handle tax preparation, entity structuring, and multi-state compliance. If your 2025 return involves multi-state income, entity elections, or estimated tax corrections, schedule a consultation before filing.
Disclaimer: This article is for informational purposes only and is not intended as tax advice. Tax situations vary, and IRS rules can change. Always consult with a qualified tax professional regarding your specific circumstances.
