There are two types of main hiring models of physicians/providers. A provider can be employed by a hospital or group in which the employer withholds taxes. When you are employed by a hospital or group you must follow their rules of retirement accounts, health insurance, what gets reimbursed, etc. On the other hand, a provider can choose to practice in a self-employed model or employ themself through their own company such a limited liability company or corporation. There are several reasons to go through the extra steps of practicing through self employed model and even more to go through your own limited liability company or corporation. Some of the benefits include the following:

1. When you are an independent contractor (not employed by the hospital or group), you call the shots.
2. A Provider can decrease their taxable income through legitimate business expenses by becoming an independent contractor. You can start your own 401k account to max out pre-tax savings on your terms ($61000 for under 50 and $67500 for those over 50 years old) for 2022. You can also reimburse yourself for mileage driven at the allowed IRS rate (62.5 cent per mile for the latter half of 2022). Other write-offs available such as home office, space in home used for business use, office supplies, phone/business/utilities used for business, a company car, etc.
3. Under a limited liability company or corporation, your personal assets are protected from lawsuits if you operate under a qualified registered company in most cases.

As you can see, several of the above benefits wouldn’t be possible as an employee. If you like the idea of running your own show along with the extra benefits for a little bit of extra paperwork, this is just the tip of the iceberg on the perks of being an independent contractor.

Administrator