HOMEFAQs & Tax Help
1. As a relief veterinarian, what business entity is best suited to structure my business?
There are many concerns to think about when deciding what type of business structure you should choose. Sole Proprietorship, LLC, C-corp or and LLC/C-corp taxed as an S-corp? There can be some tax advantages achieved through an S-corp, but those are reduced the more you make. All allow you to deduct common expenses, mileage, and put more away for retirement, and all except for the Sole Proprietorship can provide additional liability protection.
2. How do I go about setting up an LLC easily and cost effectively?
You can use an online service, an attorney, and some CPA’s will assist. Each charge varying amounts. The least expensive is generally a CPA or other business consultant but does not include an operating agreement. Some online services can provide templates and will range from $1,000-$3,000 and the most all-inclusive and most expensive will generally be an attorney. If you have a partner, then an attorney is strongly recommended.
3. What am I able to write off as a relief veterinarian?
All businesses, yours included, can tax deductions for any expense used in the pursuit of profit. This would include the phone or internet you use to schedule shifts, licensing and continuing education expenses, mileage from your “tax home” (your house generally), and others. This is where a seasoned CPA can really help, as there are other tax strategy considerations around retirement savings and health plan expenses.
4. Can I expense a home office as a relief veterinarian?
Absolutely! As long as you are using the home office for your business in the pursuit of profit.
5. How do I best preserve my independent contractor status with the IRS?
The IRS uses a multi-point test and not a bright line test. The more you act like a business the better. This would include a separate business checking account, keeping books, working for more than one hospital, as well as other points. Speaking to a CPA about this would be advised.
6. Do I need a tax ID number or do I need to register the name of my business?
You don’t have to, but it is advised. Having a separate tax number (EIN or TIN) is helpful so that you do not have to provide your social security number. Have an EIN and business name also helps build a case that you are an independent contractor.
7. How often do I need to prepay my taxes or is there an easier way so as not to be penalized?
Estimated tax payments are due 4 times a year at the end of each quarter. There are safe harbor methods, and a calculation at least once a year is advised. This is something that a CPA can assist with.