Starting your private practice independently is not for everyone. Many group practices are offering to take individuals on a 1099 contract. But, what exactly does this mean and what are the benefits for you? Becoming an independent contractor on a 1099 may have more benefits than you realize at first glance. First, let’s talk about what it means to be a 1099 tract contractor.
What Is a 1099 Contractor?
A 1099 contractor is a separate business entity on its own. You are not considered an employee under this contract. If you are hired on as a 1099 contractor, you will have a lot of flexibility. First, you get to set your own hours, i.e.: you get to pick when you want to work and when you don’t. This is ideal if you are still working a full-time job – perhaps in the community mental health – and want to dabble in private practice on the side. Coming in as a 1099 basically gives you freedom. You don’t have to worry about paying for things such as membership fees or dues.
1099 Contracting And Tax
Being a 1099 gives you benefits at tax time as well. Although you are responsible for paying your own taxes, you can also take advantage of write-offs at the end of the year. You will get a 1099 form from your employer outlining exactly how much they paid you. Remember, you get to write off any expenses for your business, as well as trainings, education, travel, and meals for business meetings. You should also set money aside in case you need to pay in at the end of the year. You do need to pay tax on the income you made as a 1099 contractor.
Office Space And Marketing
Coming in as a 1099 contractor also gives you a steady stream of clients and referrals. This as opposed to starting your own private practice, which can take a lot of leg work before you have a steady stream of referrals coming in. Other benefits include office sharing. Being in private practice can get awfully lonely at times and, when you come in as a 1099, you’re likely coming in with a support staff person already there, which you typically don’t have to pay for. Marketing can also be easier although you will want to pay for your own marketing supplies so that you can use it as a write off during tax time. But, marketing can be a group effort as opposed to something you would have to do individually.
Establishing Your Own Specialty And Niche
The benefit of coming in as a 1099 is that you can also establish your own niche and get clients in this way. Starting out on your own in private practice would be much riskier, but if you are joining a group practice and they already have a steady stream of clients coming in, it is likely that you’ll be able to really develop your own niche. Having a contract written out, prior to employment, can be a great benefit. The contract work will answer all of your questions on what happens when… If there are things you don’t agree with in the contract simply bring it up with the contractor. There may be more leeway than you realize.
Melinda Vesely, LCPC, CADC, Owner of Empowering Minds counseling.