Navigating Taxes as a Locum Tenens Clinician

A Guide to Financial Freedom

Understanding your tax responsibilities when transitioning to a locum tenens career as a physician or advanced practice provider can seem daunting. Unlike traditional employment, where taxes are automatically withheld, locum tenens professionals are responsible for managing their own tax obligations. While this may sound complex, it’s also an opportunity to take control of your finances and maximize your earning potential.

At Floyd Lee Locums, we specialize in making your transition to locum tenens seamless and stress-free through our concierge-level support. From navigating licenses and credentialing to helping you update your CV, we take care of the details so you can focus on your professional and personal goals—and enjoy the freedom this workstyle offers.

Let’s dive into what you need to know about taxes as a locum tenens professional and how we can help set you up for success.

Understanding Taxes as a Locum Tenens

Unlike traditional W-2 employees, locum tenens clinicians are typically classified as 1099 independent contractors. This means you’re responsible for managing your own taxes, including both the employee and employer portions of Social Security and Medicare taxes (commonly referred to as self-employment tax). Here are the key differences:

Quarterly Tax Payments: As a contractor, you’ll need to estimate and pay taxes quarterly to the IRS and possibly your state. This replaces the automatic payroll deductions that W-2 employees experience.

Deductions: You can deduct work-related expenses such as professional memberships, equipment, continuing education, and even a home office if applicable. While most travel and housing costs are covered by Floyd Lee Locums or the contracting facility, other eligible expenses can significantly reduce your taxable income.

Business Structure: Many locum tenens clinicians choose to establish an LLC or S-Corp for liability protection and potential tax benefits. Consulting with a financial advisor or CPA can help determine the best structure for your specific situation.

Need help finding a tax advisor?

Download our free Locums Toolkit to see our partners.

Why Tax Planning Matters

Effective tax planning is crucial for maximizing the financial benefits of locum tenens work. As an independent contractor, you’re responsible for managing your own taxes, which includes setting aside funds for quarterly payments to the IRS and possibly your state. This proactive approach prevents surprises during tax season and ensures you stay compliant.

To make tax planning manageable, consider these tips:

Set Up a Separate Account for Taxes: Open a dedicated savings account where you can deposit a percentage of each paycheck specifically for taxes. This helps you avoid accidentally spending the money you’ll need at the end of the quarter.

Track Your Expenses: Keep meticulous records of deductible expenses such as professional memberships, equipment, continuing education courses, and travel costs not covered by Floyd Lee Locums or the contracting facility.

Work with a CPA: Working with a tax advisor who understands the nuances of locum tenens can help you identify deductions and credits that reduce your overall tax burden that may not be common in other lines of work.

Learn more about becoming a locum tenens clinician

with our free Locums Toolkit.

Advice for Those New to Locums

Dr. Zakiya Antoine is a board-certified Family Medicine physician who says she knew she wanted to pursue the locums lifestyle ever since she was a resident. Dr. Antoine decided to pursue a career as a locums physician because she wanted to start a business outside of medicine. She didn’t want the “traditional experience” of being a physician and was torn, as she says, “between being a 9 to 5 physician and dancing to the beat of my own drum.” Locums was attractive to her because she wanted the opportunity to explore other options, needed job flexibility, and wanted a higher pay rate.

The one thing Dr. Antoine wishes she had known when she started working as a locums physician is how to manage her finances. Not only is a locums physician responsible for paying taxes on their 1099 income, but they must also obtain their own benefits, such as life insurance, health insurance, disability insurance, and a retirement plan.

However, Dr. Antoine states this is all feasible if you have a team of financial, legal, and accounting experts like Floyd Lee Locums offers. In fact, she encourages other clinicians who are considering locums not to let these issues deter them.

Dr. Antoine has enjoyed working as a locums physician and says she is grateful to have found the right situation so early in her career.

She advises other clinicians who are considering locums to do several things:

“Don’t be afraid of the idea of locums. Floyd Lee Locums guides you every step of the way—a benefit of their concierge approach.”

Have a plan on how to manage 1099 income so “you won’t have any surprises come tax time.”

“Be flexible in terms of your willingness to travel, the places you are willing to work, and the type of work you are willing to do.”

“Be open to new opportunities!”

Isn’t it time someone took care of you?

The Benefits of Locum Tenens for Financial Growth

While managing taxes requires some extra effort, the financial rewards of locum tenens often outweigh these challenges:

Higher Earning Potential: Locum tenens assignments typically offer higher pay rates than traditional employment, especially in high-demand specialties, during times of crisis, or in underserved areas.

Covered Expenses: With housing, transportation, and malpractice insurance often included in assignments through Floyd Lee Locums, more of your earnings go directly into your pocket—or toward financial goals like paying off student loans or building retirement savings.

Retirement Flexibility: As an independent contractor, you get to choose how often and how long you work. This allows many clinicians the option of taking just a few assignments a year as they get older to supplement their retirement income.

How Floyd Lee Locums Supports You

At Floyd Lee Locums, we’re more than just a staffing agency—we’re your partner in your personal and professional success. Here’s how we make tax planning (and everything else) easier for you:

Concierge Support: From connecting you with tax advisors to helping you find the right church at your new assignment, we’re here to lighten your load.

Malpractice Insurance Included: We provide A+ rated malpractice insurance with tail coverage at no cost to you.

Travel & Housing Arrangements: We handle all logistics for your assignments. Whether you need a hotel that accepts pets or an Instacart delivery to get your fridge stocked, we are here to help so you can focus on your assignment.

Locum tenens is more than just a job—it’s a lifestyle that offers freedom, flexibility, and financial growth.

At Floyd Lee Locums, we live by the motto, ‘By connecting clinicians to purposeful work, we impact lives. We go out of our way every day to make sure we’re exemplifying our values and being a true resource and support system for the clinicians we work with. We truly get up every single day and ask ourselves, ‘How do we have impact today?’

At Floyd Lee Locums, we’re committed to providing you with concierge service that puts your needs first. We understand that your work matters, but you matter, too.

Are you ready to leverage the power of concierge locums? We are here to guide you through the process, answer your questions, and be your locums concierge guide.