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Traveling Locum Tenens and Taxes

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  • Traveling Locum Tenens and Taxes

    Are there any pitfalls for certain states with state income tax and business structure? Would a business entity such as a S corp work best in most situations?  Would be for an EP.

  • #2
    This current thread on Bogleheads is great for sorting out the S Corp vs. Sole Proprietor question.  See Spirit Rider's usual excellent advice in particular:

    https://www.bogleheads.org/forum/viewtopic.php?p=4805779#p4805779
    “Work” is a four letter word for good reason.

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    • #3
      It's too general to say an S-corporation is better in most cases.  I always calculate the tax both ways to quantify the savings or extra tax from an S-corporation.  Then if it's saving you tax I reduce the savings by the additional administrative costs.  If you're still ahead after that then it might be a good idea.

      Some states, like IL and CA, charge an S-corporation level tax.  So that eats into any tax savings.

      Plus if you're working in multiple states you might have to register as an employer in each one which is a huge pain.  Each state has their own threshold of when you need to register.

       

       

       

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