1099 and Locum Tenens Physician Taxes: What Moonlighting Doctors Need to Know

If you pick up locum tenens shifts, moonlight, or do any work paid on a 1099, you're not just an employee anymore — for that income, you're a business. That opens up both new obligations and real opportunities most W-2 physicians never get.

The Obligations

1099 income is subject to self-employment tax on top of income tax, and taxes aren't withheld for you — which means you're generally responsible for quarterly estimated payments. Miss them and you can owe penalties. This is the part that surprises physicians in their first 1099 year, so it's worth getting ahead of.

The Opportunities

Being self-employed for that income unlocks deductions and planning that employees don't have:

• Business deductions — legitimate expenses tied to the work (licensing, travel, equipment, home office where it qualifies).

• Powerful retirement plans — a Solo 401(k) or SEP-IRA lets you shelter a large share of 1099 income, often far more than a workplace 401(k) alone.

• Entity strategy — at sufficient income, an S-corp election may reduce self-employment tax (with the reasonable-compensation caveat). S-Corp for Physicians

The Bottom Line

1099 and locum income is often where physicians have the most control over their taxes — but only if it's planned for, not discovered at filing. If you have side income and no strategy around it, that's usually money left on the table. Tax Planning for Physicians

General educational information, not tax advice. Self-employment tax, estimated-payment, and entity rules are fact-specific — consult a qualified advisor.