Are you wondering how to navigate tax season as an independent contractor?

Andrew Schwartz, CPA, recently presented a webinar for Barton Associates that covers many great tips to making the process as easy as possible. Please watch the recording of the webinar for the ins and outs of locum tenens taxes: https://www.bartonassociates.com/locum-tenens-tax-webinar-2022

Andrew Answers:

What should I do if I’m working in multiple states?

When working in multiple states, the rules are as follows:

  1. You first pay taxes to the states where you work if that state has an income tax and doesn’t have a reciprocity agreement with the state where you live.
  2. You then calculate taxes on that income in the state where you live, and reduce those taxes by taxes paid to another state.
  3. Essentially you end up paying state taxes on that income based on the state with the higher taxes.

If you are an S-Corp and working in multiple states, you need to apportion the S-Corp income to the various states where you work.  You should probably be withholding state income taxes from wages paid in each state where you work.  I’m not sure the S-Corp is the best entity for health care professionals working in multiple states due to these various tax headaches.

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