This information is posted courtesy of its author NedRN

The term INDEPENDENT CONTRACTOR as we have been using it in the Delphi forums refers to contracting with either hospitals or agencies as our own business, not as employees.

For those new to the concept, being independent enables a significant upward step in income for a nurse. You will find it difficult to earn less than six figures a year (which we will now call revenue). Basically, you will be keeping the agency’s profit margin. You will also be able to arrange your own benefit package to your liking and maximize tax savings that regular agencies will never do for you. This increases your net income on both sides, revenue coming in and taxes going out.

The downside (for some) is that you will have to find your own positions, negotiate and bill, find and pay for your own housing, and add another layer of income tax returns for your new business. Definitely not for everyone but I found the process to be a lot of fun and even liberating!

I have completely revamped these FREQUENTLY ASKED QUESTIONS , first compiled Jan 2003. Since then, I have successfully completed direct hospital contracts, incorporated, and paid myself as a corporate employee. Doing my first corporate tax returns this month uncovered a few errors in previous FAQs that have now been corrected.

These updated FAQs should be able to answer most of your questions and jump start you on your way. I’ve capitalized key words to make searching these questions easier. I list suggested reading and resources for everything mentioned.

This has been written for the travel nurse who is working away from your tax home on contracts. If you are working locally, or in another type of business, these FAQs will be less pertinent but still useful – even for the ordinary traveler.

One assumption I have made throughout these FAQs is that you are acting alone for tax purposes. If you have a spouse that can act as the new agency owner, benefits to you as an employee can be higher than if you are the owner of an S corp, an LLC, or a sole proprietor. Worth investigating if you are in this position.

Here is a list of what you need to get going:

BUSINESS TYPE , sole proprietor or corporation

PHYSICAL ADDRESS mostly to receive payments and PHONE

FAX NUMBER will be used for most communications

EMAIL hey, it’s 2005 – get with the program!

PROFILE of traveler: summary, work history, skills list, at least two recent written references/evaluations.

CONTRACT can’t do business without one. Send with:

INSURANCE document: professional and general liability. You will also need workers comp certificate (don’t send).

AFTER THAT : send traveler credentials, physical, and include drug screen and background check as required by client

WORK , invoice, and collect payments!

Besides the above topics, I will also discuss:

BILL RATES

PAYROLL TAXES and DEDUCTIONS

PER DIEMS

HOUSING

RETIREMENT PLANS

MEDICAL BENEFITS

TRAVEL PAY

INDEPENDENT CONTRACTOR OR EMPLOYEE?

DIRECT CONTRACT or SUBCONTRACT?

AGENCIES THAT USE ICs

RESOURCES

PUTTING IT ALL TOGETHER

BUSINESS TYPE This thread is concerned with maximizing revenue and minimizing taxes as an independent. Entity choice plays a large part in this. Actual costs are directly deductible, no difference between entities.

Benefits are the reason that professionals such as doctors and lawyers incorporate. In a C corporation for example, all health care costs including alternative therapies are deductible as expenses. The advantage for travelers comes from two areas, not just benefits, but also housing. All corporate structures (C, S, LLC) may use Pub 1542 schedules for housing deductions, a huge advantage.

Audit rates are somewhat lower for corporations. But in general, audit rates are so low that that alone should not factor into your entity choice. For peace of mind, do everything right no matter your choice of business type. Then everything will be fine in the remote chance your business is audited.

SOLE PROPRIETORSHIP (synonym is self employed): This is what you will default to if you do not formally set up another type of business. You simply add an easy to do Schedule C (Business profit or losses) to your 1040 tax return.

CORPORATIONS . These come in several flavors. All are limited liability, which does not do a lot for a single nurse business. You are still personally responsible for your professional practice - get insurance. All corporations are state level creations with federal tax implications. Any profits left in a (regular or C) corporation will be taxed. This can be an advantage for highly taxed individuals and large corporations - probably not so much for us. Don't leave money in your corporation; pay it out in expenses, wages, and benefits.

C CORPORATION . This is the traditional corporate form. The most benefits, and the most paperwork.

S CORPORATION . You can elect that a corporation pass through all profits and losses to the owner. This simple election turns your C corp into a subchapter “S” corporation. All profits not expensed or paid out as wages will be passed to the owners as a K-1 distribution. This has a distinct advantage of not being subject to FICA, a savings of 15.3%. But your salary must be reasonable, a difficult standard to determine, either before or in an actual audit. However, it is the choice of millions of small business owners and it works well for them.

LIMITED LIABILITY COMPANY (LLC). This is a relatively rare form for an agency or single practitioners. It is similar to an S corp or sole proprietor for benefits and pass through taxation, but does not require annual corporate niceties. A major issue is that while all states recognize this recent type of business, the rules vary a lot from state to state. I don't believe this is the best choice for a nurse planning on operating in other states. Some of the IRS rules are still being worked out as well. I believe that an audit situation would be more difficult to defend than a traditional corporation. Remember that travel nurses have fairly unique tax circumstances compared to traditional occupations and businesses. Compounding that with a fairly new entity type that does not have a lot of court and regulatory history behind it could add dramatically to the complexity of an audit.

Partnerships in various flavors do not apply to this discussion of single nurses setting up themselves as a business. They require partners. And for almost any type of business, partnerships are usually the worst choice.

PROFESSIONAL SERVICE CORPORATION . Although a corporation is a legal creation sanctioned by the state, the IRS will classify you as a professional service corporation if you are personally providing direct services to the end user. This form has higher federal taxes - 35% - if you leave profits in the business. It kind of looks like we fall in this category, but as contractors to hospitals or subcontractors to other agencies, we do not. Skip over this in your reading. Not an option you would want anyway.

Corporations have costs and hassles that sole proprietors do not. Which business form you choose depends a lot on personal preferences (the hassle factor) and your unique circumstances. Differences between these forms are discussed further in the other FAQs.

PHYSICAL ADDRESS You need a physical address to receive checks from hospitals (no direct deposit). For simplicity, you would like this to be the same address as your tax home. If you incorporate, you must have a registered agent. You can save the cost of outsourcing this and act as your own registered agent with a physical address in the state of incorporation. This cost varies from $80-$1,500 a year, depending on services required and state involved – often supplied by law firms.

PHONE NUMBER If you have someone you trust to answer your phones at home or an answer machine that you check often, you can use this number. Another solution might be to sign up for an 800 service that can forward your calls where you wish, to your cell phone for example. A simple web search will return lots of links for providers, all less expensive than your local phone company.

This one has no setup fees, $2.50 a month (waived when billing is over $15 a month), 4.5 cents per minute from out of state, and six second billing. The web site is a little confusing but no waiting on the phone for customer service. Custom numbers are available for no charge (if available) or you can transfer your toll free number to them for $2.

You have a few choices to make regarding who answers the phone. Very small businesses get away with voice mail (as does HR in even large hospitals). But you may be uncomfortable with being the company president and the traveler. Many independents have had facilities refuse to deal with you if they know. The best would be having a family member that you can clue in on how to talk the talk (and they can then sign the contracts as well). Some independents talk about partnering with others (making you a bit less independent).

I saw a post on Delphi about an IC calling the hospital as a recruiter and telling them to hold while she connects the traveler for an interview. She then puts herself back on the phone, does the interview, and gets the contract. The manager did not notice that the voice was the same!

Another approach that may work well is to identify yourself as the owner of an agency (number of actual travelers is confidential) and that you contract yourself out as well (to keep your skills up and stay in touch with your clients). This is how many agencies begin.

However the goal is to be just like any other agency and make the process indistinguishable from any other agency. I have found it invaluable to have someone to talk to HR for you. In my case, I have a sister who is doing great handling the phone and negotiating per my instructions. Not very time consuming, under two hours of work per assignment if I do the paperwork.

FAX Forget about mailing contracts. Forget about brochures, business cards, and marketing. Your marketing is your traveler profile and everything can be done by fax. Web based faxing generally allows you to send better looking documents than from regular fax machines, and requires zero space in your car (or airplane baggage).

There is really only one good choice for web based faxing: MaxEmail. This service can be managed by email or directly on a web site for $14.85 a year (plus $10 onetime setup) for a permanent fax number. It will handle multiple file formats (Word, PDF, and so on) and charges about 5 cents a page sent. Incoming faxes are free. Check your faxes from any computer and send as well. You can also get an 800 fax number for more money but I don't think it's necessary. In this age of a multiplicity of area codes, I don't think there is a loss of credibility to have different area codes for your business phone and your fax number, especially if your business number is an 800.

You can also check out eFax. Better known than but not as flexible as it requires proprietary software.

EMAIL Definitely a plus to have a domain name that matches your business name, "info@travelersunlimited.com" for example. Something to keep in mind when you pick a company name as some domain names are not available. Yahoo registered my domain along with their basic service for $11.95 a month. This includes domain registration, a web page, and ten email addresses. This is $4 a month more than the absolute least expensive of similar services but you get 24 hour customer support and some assurance that they will not go out of business and leave your domain name stranded. A web search will turn up a large list of domain registration vendors and most will make it easy to search for your desired domain name availability.

I try to do as much business by email as I can. Avoids the hassle of getting clients on the phone, and is the fastest, best way to get great looking documents in their hands. You should have completes files ready to send to your clients at all times on your laptop. Makes a great impression on a client to receive everything you were just discussing a few minutes ago. Be aware that faxing will still have to be done; some hospital HR departments do not do outside email.

A short note about connectivity. I hook my cell phone to my laptop (cables are $2 to $25 – check eBay) and avoid ISP charges and landline expenses. About the same speed or a little faster than a landline. Verizon and Sprint are the way to go for basic service, both have built in ISPs and charge only for minutes used against your plan (typically unlimited at night). Sprint's very bad customer service may worth it if you want the fewest hassles about data charges. With some handsets, Verizon may try to charge you by data received rather than against minutes. (Any rep has the power to change it back to minutes – just ask). I haven’t had any issues with Verizon though for the last two plus years. Both Sprint and Verizon would prefer you to buy their $200 laptop PC card and $80 a month unlimited service – just say no!

For faster (no-cost) Internet access, most every hospital that I have worked at in recent years have networks that you can plug your computer into for net access that is not password protected (you do need an Ethernet port on your laptop). And most Kinko's have courtesy laptop stations with network access. Kinkos is also also a good place to print really good looking contracts without carrying a laser printer with you. Expensive prints but deductible.

PROFILE Talking about being ready with files to email or fax. This traveler profile is generally the first thing you will send to a hospital. A summary sheet, while not necessary, is a very nice professional touch. This consists of basic information the nurse manager (and human resources) needs to see quickly. Traveler name, area of expertise, years of experience, proposed assignment dates and shift, and contact information and availability times for interview.

Your resume can pass for a work history, but it looks more professional to condense the relevant information on a company letterhead and format it. I have done a number of these on other travelers and have found that it is hard to do them all alike. Just like a resume, there is always something unique that will change how you want to present someone. Perhaps they (you!) will have a lot of per diem experiences. Might be good to list all the facilities but not every excruciating date. Perhaps they have a masters in education. This could be listed as well. But most of the stuff people put on their resumes should be eliminated. Not relevant, and the NM doesn’t want to dig through all that. Should be mostly directly related to nursing experience.

Many large agencies do have a one size fits all travelers work history. Quarter or half page for every prior job. Number of beds for each hospital. Who cares? Try to keep everything as simple and easy to scan as possible. A summary is only one page (of very large type and lots of empty space). A work history should only be one page, even if you have had thirty plus assignments. Skills list is also ideally only one page, but those are hard to find (you could always develop your own). The NM only scans these, looking for where the preponderance of checks are, no one reads every line. Likewise, references should only take one page each.

So the profile is as little as five pages: summary, work history, skills list, and two evaluations.

CONTRACTS should be straightforward. Just say what you want done by both parties. I highly recommend that you have a template or a point of reference. If you are currently on assignment, I would ask your manager or human resources for a copy of your agency's facility contract. After all, there are often terms on the facility contract affecting you that do not appear on your own contract. I have gathered a number of facility contracts over the years.

Agencies would like to consider their contracts confidential and sometimes put confidentiality clauses in their traveler contracts, but generally impose no such confidentiality on hospitals. So hospitals can freely give out this information. There are often nurse friendly employees who like to empower nurses with information to further their careers. And it makes it easier on them to give you information without potential conflict of interest if you make it clear that you want it for your next contract at a different hospital. You can also just keep your eyes open on assignment. Often contracts and invoices are lying out on desks and counters (don't snoop actively, as in opening drawers or rifling files).

I have seen facility contracts as long as 10 pages full of legalese and repetition and covering every possible angle. I don't believe this is necessary. Unless the hospital doesn't pay you, you are not going to sue them or need mediation and so on. It is professional to cover all the salient points in your contract but I believe if it is unreadable or paranoid sounding that you lose points.

My own personal taste is to keep things simple so the contract I developed is a plain English two-page affair. I did not have a lawyer review my contract. Could not get a lawyer to review it casually. They all wanted two hours at $150 per hour and after further consideration, I realized that a lawyer would do more harm than good. It is unlikely that you will have a problem if you base your contract on one that has been used successfully before. And while this is not foolproof, the facility will let you know if your contract is deficient from their perspective and you can then modify it.

Here is what I covered:

Definitions or purpose . They are the client and you are the contractor providing temporary medical staffing, etc.

Contractor responsibilities :

Applicant : validate references, credentials, physical, I-9, drug screen, background check. Meet Medicare reporting requirements (keep records for two years). Meet OSHA and JACHO standards. You don’t really care so much about these but if you recall all the stuff regular agencies send you, duplicate that for yourself. For example, most will send you an OSHA book and ask you to sign that you read it. You should reflect that with a statement in your contract.

Financial . Accurate billing, payroll with taxes, benefits, workers comp, unemployment insurance, liability insurance, and the only legalese I bothered with: indemnify and hold harmless the Client from the actions of the contractor (that is what your insurance really does but hey, the contract is yours to design as you wish - it should project the company image you desire). And it is pretty common contract language.

Client responsibilities (balances the contract I think). Safe workplace, review traveler portfolio and interview for suitability, provide minimum contracted hours, submit (fax) hours, pay invoices timely (provide penalty for late payment), evaluate traveler (tool provided).

Other . Hiring restrictions, termination for cause, rates listed on attachment.

I structured my facility contract to have one attachment listing assignment details including dates, rates, position, shifts, and name of traveler (you). This allows the greatest flexibility with rates in the future and also allows you to modify either part separately. Some agencies do it this way and others will have a rate sheet for all types of workers and shifts but have to limit their contract to typically a one-year duration.

More contract resources are listed later but here are a couple sites to go to:

Skater91 provided this link, down the left side you will see business contracts. The site will prompt you for the state in which you are drawing up the contract.

This post has a link to a contract posted by Kimberly (HoboNurse). Much too basic.

This link courtesy of Canyon View Nursing has a contract written by lawyers. Too far in the other direction (IMHO).

INSURANCE

HPSO (also know as NSO) without a doubt. (888-288-3534) Only $15 more for an agency policy instead of a personal one and higher limits. $100 a year for $1,000,000 per incident and 6 million aggregate. Then another $150 for a million of general liability which includes fire/water damage that so far, hospitals expect this coverage. This also covers you should you add employees and your rate will not change until renewal (if then). Fantastic certificate provided for submission to hospitals - and the hospital will need it (just send it with your other paperwork, don't even wait for them to ask). For 2004, my total bill was raised to $265.

WORKERS COMP Technically not required for a sole proprietor and depending on the state, a corporate officer may also be exempt. If you hire other employees, it is an absolute requirement in most states. I’ve yet to be asked for it but I have seen it on other agency's comprehensive insurance certificate. The hospital should require it or some other form of accident insurance but may not ask for documentation.

Comp will vary a lot from state to state on how you get coverage. In some states you can opt out. I have set up shop in Ohio (state supplies coverage) and for $10 every six months, I can maintain a certificate and without other employees, I owe nothing further. Which is great! Presentation without the cost, all legal. If you have to pay, or elect to have coverage, it costs around 1.5% of gross payroll for our job classification (generally with a weekly income cap).

AFTER THAT: Actually, I'm going to describe work flow in getting the contract. First is finding an open travel position. Best is sifting through ads on TNT, tips from other travelers, talking to agency recruiters, and major agency websites (Cross Country is perhaps the best). If you don't know of an open position, cold calling hospitals can work (has for me) but can be a huge amount of work.

You are supposed to call HR first (sometimes it is Staffing, not HR) and I would suggest it if you know for sure that there is an open position. Many hospitals get dozens of phone calls from agencies a day and only do voice mail. Hard to get through.

You can also call the NM of the department you want to work in (as a private person, not an agency) and ask her if she has positions for travelers (after introducing yourself). If so, this will usually lead effectively to an interview which will further determine if this is the right place for you. Besides the usual questions, you can remark that you are signed up with a number of agencies but since you have a favorite small agency, could you use that one? She may not know but if she does, you have saved some more work figuring that out with HR,

Mind you, this is not politically correct. The NM may be quite surprised to hear from you directly. HR is supposed to be there to screen applicants and agencies and protect NMs from these initial calls. But nothing venture, nothing win.

If all is positive, you can now call HR with this story of a traveler who talked to so and so and where can you send the profile? At some point, they are going to ask if they have a contract with you. Reply no, not yet, is that a problem?

Some hospitals limit the number of agencies they use. Some use a prime vendor that all other agencies subcontract through. And then there are chain hospitals. Forget about all of these. Not worth even trying. Not to worry, they are not the majority of hospitals. Still tons of positions out there you can actually get.

So you submit the profile. They like it. You then submit your contract, insurance stuff, traveler credentials/physical etc. They either like it or will negotiate changes. Same thing with bill rate. They will tell you of any special needs such as drug screen, background check (no suggestions for a company by the way, search online) and so on. At some point, they will also tell you how to invoice (or ask - no rush, lock everything else up first).

Then you just go do the assignment! No tips (you already have experience there) except a word of caution. It would be a mistake to tell anyone at work, management or coworkers, that you are working for yourself. I cannot see anything good coming of it. Think about it for a while. It certainly comes hard for me to be quiet as it is quite exciting to be independent. Delphi is where I can talk about it openly.

BILL RATES This is a common question on Delphi, what should my contract rate be when contracting directly with a hospital?

In any discussion of business charges, prevailing market rates should be your baseline. How to discover what these are? Ask! Ask your manager, human resources, contracts person, procurement, and other travelers. And as mentioned before, keep your eyes open, invoices are often laying around openly. Some agencies (the ones who use ICs) will share their bill rate, human resources in hospitals (you will be negotiating rates with them) will often be very candid about the average rate they pay.

For RN travelers, I can give you couple of rules of thumb to calculate rates. You can generally take an agency pay rate to you (assuming that they are paying for housing etc.) and double it if low, and add $25 dollars to it if high. Traveler pay rates are currently about $24 to $38 an hour and bill rates typically range from $48 to $65 an hour.

How to find out agency rates? Agency pay rates are advertised (here on Delphi and nursing journals), other travelers will usually tell you what they are making, and it is a good idea to be signed on with an agency or two (times may be lean as an IC), and this agency will tell you their pay rate in various areas and facilities. (It would be rude to ask your recruiter what their bill rate is and your recruiter may not even know).

Once you have a market rate, you can go from there. You may have to lower it to get your foot in the door at a particular facility - some large facilities restrict the number of agencies they deal with. Or raise it if you have a particular specialty with high needs in that facility. But remember, you are in a seller's market now and for the foreseeable future. No reason to sell yourself short.

PAYROLL TAXES (more insurance essentially) and TAX REDUCTION

FICA is social security insurance and Medicare. These are federal programs and required but there are a few things you can do about it. One of the most significant things is profit sharing so I discuss that at some length later in retirement. And in general, you can minimize this large premium by paying yourself as little as possible. Choosing an S corporation as discussed in business types will also reduce your FICA burden.

UNEMPLOYMENT insurance has a state and federal component and accounts for roughly another 1.5% of payroll. Optional for a sole proprietor but not for a sole proprietor’s employees. You will probably have to pay it if you are incorporated. I can't think of a good reason to pay this if you don’t have to and you won't be eligible for benefits anyway. It is also a cost advantage you have over an agency (you could reduce your bill rate by 1.5% for example to be more competitive). Worker's comp and unemployment you can fudge on the contract. Mention them in your contract - "responsible for" - but you do not have to say that you actually provide it.

Easiest way to reduce all taxes is by seeking out and taking all available legitimate expense deductions. Don't spend money just to save on taxes, that is just foolish (the more you spend the more you save theory). Deductions that a travel nurse IC should consider are meals and incidentals from Publication 1542, housing away from your tax home (leveraged with Publication 1542 schedules if you are a corporation), all travel between your tax home and the facility (if an overnight stay) at 40.5 cents a mile (or actual airfare/other costs if higher), commute miles between temporary housing and the hospital, licenses, education R/T profession, certifications, cell phones. Perhaps you have to hire people to maintain your home while you are away. Anything business related should be considered. Lawyer, CPA, other consultant fees. Books about business. Incorporation and maintenance costs. Bank fees.

And don’t forget about deferring as much income as you can afford into a 401. You can put up to $41,000 a year (plus a bit more if you are over 50) into a qualified retirement plan. And then another $3,000 into a Roth IRA personally.

Tax reduction schemes other than what I discuss here should be scrutinized carefully. Be careful and get good advice, bonuses for officers or employees are usually considered reportable wages. And dividends to corporation shareholders, while not subject to payroll taxes, are subject to both corporate income tax AND personal income tax (double taxation).

Just to clarify language here for a second, expenses and deductions and reimbursements and costs are one and the same. You will pay no taxes of any kind on either one as any as a business. Offices supplies, housing (actual cost or reimbursement from Pub 1542), per diems, travel, phone calls and so on are all a line item deduction on your tax return. They directly reduce your gross profit before any taxes are considered.

PER DIEMS are synonymous with Meals and Incidentals (M&IE), and are referred to as "Tax Advantage” by agencies. The IRS allows you to deduct 50% of meals and "incidentals" costs while working away from your tax home. You can deduct either actual receipted expenses, or use the IRS schedules found in Publication 1542.

You can deduct these costs 7 days a week away from home. Typically $36 a day (using the high/low method), this equals $252 a week, or about $3,200 for a 13 week contract. 50% of this amount is deductible. Don’t forget your travel days to and from the assignment, but you may only use half of the per diem amount on the first and last day of travel. You may deduct this in any type of business entity as an expense.

Publication 1542 is the basis for the Tax Advantage plans that many traditional agencies offer their employees if they meet the "working away from your tax home" standard. This standard is described in Publication 535 in chapter 13.

Any travel nurse working away from home may claim a per diem deduction but there is a huge advantage for the IC. A regular employee must first meet a steep threshold (2% of AGI) before applying this deduction and may only claim amounts that exceed this threshold and you must also meet the minimum deductions to itemize your return in the first place. In addition, FICA applies to the ordinary employee at an effective cost of 15.3% before this deduction.

If you are a regular employee of a standard agency this means that it is a beneficial to work for a standard agency that deducts this ahead of state and federal income taxes and FICA. Not only does this result in large savings on those taxes, but you also save by no longer having to meet a threshold or itemize. The 50% taxable portion is borne by the agency so you save there as well. It is treated as an ordinary expense by the agency so it is not reported as income to you (does not appear on your W-2 and is not 1099 MISC income either).

As a final note for regular travelers whose agency offers "tax advantage", this normally reduces your regularly hourly pay by the same amount. Your paycheck may look somewhat complex as it would be illegal to take a straight deduction from your wages - it is after all, an "expense" on the agency side. So your contract and pay stub should list a different rate for the first 36 or 40 hours (hopefully your overtime rate is based on adding your hourly and per diem together). You can negotiate this per diem amount with an agency that offers "tax advantage" but bear in mind that since they have a tax liability, they are unlikely to give you the maximum the IRS allows in Pub 1542 (and under no obligation to do so either).

HOUSING When working away from your tax home as a sole proprietor, the IRS allows you to deduct your actual housing costs (receipts are required). If you are a corporation, you can use Publication 1542 schedules without receipts, a significant advantage. This is technically a "reimbursement". You still must meet the tax home requirements of Pub 535 of course. This is also the basis for tax free housing subsidies from traditional agencies.

The high housing rate for 2005 listed in Pub 1542 is $158 a day. The low housing rate is $91 a day. You can also choose to use the regular federal per diem rate method (alternatively found here) if you wish but the maximum reimbursements are usually less. You have to stay with the method you pick for the whole tax year.

I calculate this deduction for a corporation to range from $28,000 to $48,000 a year! That’s assuming a 10 month work year. Of course you have to pay for your own housing costs (including such things as utilities) without further deductions.

Be careful when choosing your business or personal checking (or card) to pay for housing. If you are a sole proprietor, it makes sense to pay for housing costs with the business account as you can only deduct actual costs. If you have a corporation, DO NOT pay for housing from a business account. You will be using Publication 1542 to reimburse yourself (a check from your corporation to you personally) for housing, you cannot also pay for that housing as a corporation. One or the other: actual receipted costs, or Publication 1542.

RETIREMENT PLANS One of the benefits to being a IC is that you can increase your contributions dramatically when compared to being an employee. I’ve put well over $20,000 a year into retirement accounts for the last couple of years, try to do that as an employee! SEPs are the easiest, but 401s are close. They both have the same ultimate contribution limits, but you can get there a lot quicker (lower income) with a 401. Here’s a nice general article on business retirement plans highlighting differences and options.

Contribution limits are the same regardless of type of business entity, maximum of about $41,000 a year (which includes any employee contribution) for any type of DEFINED CONTRIBUTION PLAN such as a SEP, Keogh, or 401k. But there are differences in FICA that might affect your choice of entity.

FICA (Federal Insurance Contributions Act) is often referred to as Social Security or SSI, or in another context as self-employment tax. These terms are often used interchangeably, but for accuracy and consistency, I will refer only to FICA which includes both SSI and Medicare. For all purposes of discussion here, it is a single ratio, 15.3% that is split into two halves. The employer pays half (7.65%) and withholds the other half from the employee’s wages. Employee wages (including employee’s half of FICA) are fully deductible to the employer, as is the employer share of FICA. Level playing field for all types of entities.

A further point to clarify (this can be very confusing the first time) is that elective employee contributions to a 401 are deducted from regular wages. Income tax is deferred (will have to be paid when you retire as you receive distributions), i.e. not paid now, but FICA is paid right now just as with ordinary W-2 wages.

It is not a level playing field is when you consider not just regular wages (or net profits for the sole proprietor) but also profit sharing. Sole proprietors have to pay FICA on profit sharing to qualified retirement plans. The employer share of 7.65% is tax deductible though, reducing it's impact a small amount.

A corporation does not have to pay FICA on profit sharing contributions (also referred to as matching contributions) to a qualified retirement plan. It is a line item deduction on the corporate tax return.

If you have an S corp, K-1 distributions of left over profits cannot be used as part of the basis of a profit sharing contribution. One way to make sense of this is to think about profit sharing is based on income (theoretically) subject to FICA. So W-2 wages may be decreased by profit sharing but not FICA exempt K-1 distributions.

So what is the impact of type of business? Depending on your ability and desire to contribute to a retirement plan, this has a significant impact. Looking at the chart on page five of Fidelity's 401 plan, a reasonable profit sharing contribution might be $10,000 a year. If done as a sole proprietor, your FICA costs would be $1,530 a year on this amount. If you have a C corp, that amount is $0. In ten years, that is $15,300 extra in the bank (plus any investment gains)!

Fidelity has the lowest costs that I know of for a 401. Zero startup costs and zero annual costs. Even value stalwarts like Vanguard charge more. Ask Fidelity about a small business or self employed 401, they do have other more costly plans for larger businesses. You can then control your own retirement plan to invest in almost any stock, bond, option, or mutual fund – you are not restricted to Fidelity products.

DEFINED BENEFIT PLANS (also called pension plans) are probably not good options for our income range. They have high administration costs including actuarial services running a minimum of several thousand dollars a year. Low flexibility to change contributions year to year. Don't even think about it unless you need to shelter significantly more than the $41,000 a year available in a 401 retirement plan.

MEDICAL BENEFITS You can set up your C corp to pay all unreimbursed health costs including health insurance deductibles and premiums, copays, and alternative therapies. Big advantage over employee status (depending on your own health and family needs of course). Fully deductible, including FICA.

Health insurance is now also 100% deductible for sole proprietors (income tax only, not FICA). While you cannot deduct other health costs directly, you can set up a Health Savings Account or HSA which will have the same effect if your additional costs are within the pretax contributions allowed. Unlike corporate HSAs you may have read about, the Archer rolls over every year, building up if not used. Any excess is treated very similarly to a retirement plan, investment gains are tax free and you can withdraw it after retirement for non medical use if you wish. And you can use it for non-traditional therapies too.

S corps (and LLCs) are similar to sole proprietors (schedule C filers) for health care benefits. C corps have the edge for medical benefits if you anticipate high health care costs. A healthy individual (and family) will do well with the other business forms if you plan well.

One advantage that working as an employee traveler for a regular agency has is access to a group health plan. This is likely better than anything you will find on your own (outside of an HSA if those work for you). Take advantage of COBRA regulations that allow you to continue your insurance for its actual cost plus a 2% administration fee (all paid to your former agency) for eighteen months. A good group insurance plan is around $300 a month and is fully income tax deductible. After eighteen months, you will have to figure something else out. If you are in love with your insurance policy, it might actually pay you to do another assignment with that original agency. That will keep you going for another two years.

Note: If your COBRA payments are closer to $200 a month, I would drop it as it is likely not very good insurance.

TRAVEL PAY The IRS allows deductions for overnight travel between your tax home and your remote job housing. In addition, deductions are allowed for commutes between your remote housing and your job site (or between job sites as typical in home health for example). The first is the basis for regular agency reimbursement of travel expenses. The second is an added benefit of being an IC - no agency will do this for you.

The easiest way to deduct travel is per mile. The IRS allowance for 2005 is 40.5 cents. Same deduction for any type of business. Depreciation is built into this number making it unlikely that you will do better with the more complex methods below.

Next most difficult way is to deduct actual costs. Gas, maintenance, and lease/payment costs; properly apportioned for personal/business use.

Then comes having your business purchase your vehicle. Remember that personal use will have to be accounted for. Leasing is probably the best way to go instead of outright purchase. This link is the IRS take on it, but you will probably need professional help such as a CPA if you want to go this way.

INDEPENDENT CONTRACTOR OR EMPLOYEE? There are two separate yet intertwined issues here. One is that the IRS would prefer that ICs be regular employees. Better for them to collect taxes and minimize deductible expenses for the worker. The other is the risk to the hospital for workers comp and unemployment claims if the worker files a claim and asks for reclassification from the involved state agencies.

The first is a risk primarily for the IC. If reclassified by the IRS, you may owe substantial back taxes and penalties. If unable to collect from you, the IRS may try to collect against the facility (or an agency if one is involved). This also makes hiring you as an IC a risk for the facility.

The second is a huge risk to a hospital. They may not be aware of the risks, but if they are, you need to be prepared (and never, never present yourself as an IC – big red flag to a hospital lawyer).

If you incorporate, you sidestep the issue completely as a corporation cannot be an employee. The risks are almost entirely for the sole proprietor on both these issues.

This is a good IRS starting page on this subject. Look at Publication 15-A for in depth discussion. This publication make it clear that since our agencies do not control our work, that we are, in fact, independent contractors in the eyes of the IRS for income tax purposes.

This is a link to a legal brief entitled "CRNAs as Independent Contractors". Lengthy discussion of all the pertinent issues with case studies. Directly relevant to our roles as contract nurses.

This is from the excellent Findlaw website: "This chapter will offer guidance to protecting yourself properly if you are an independent contractor." Defines IC and offers practical guidance.

The recommended texts "Working for Yourself" and "Hiring Independent Contractors" listed later have excellent discussions on this subject with actual cases cited and ways to protect yourself even when the work is identical to that of an employee.

DIRECT CONTRACT OR AGENCY SUBCONTRACT?

There is room for discussion here. Cutting out all middlemen looks to be the best for maximizing income. But agencies have more contacts, resources, and presumably better negotiating skills. And they can make an assignment happen smoothly (or not).

A couple other ideas that are really neither of the above:

Independent Nurse Consultants, Inc have formed a business structure where nurses can be "partners". They have 19 nurses on board now (Dec 26, 2003). They may be a good partner for you and provide resources that you cannot alone duplicate. They have said that they will be able to characterize wages as other types of income. Also provide group health insurance. There are threads about this company here on Delphi as well as on their web site:

Cruzanvi has proposed forming a corporation with other like minded nurses.

Integrative HealthCare Resources, LLC is a group of 20 critical care nurses in Richmond Virginia who actually have formed their own company that you can join, if invited. Looks very interesting!

And from time to time others express interest in joining forces. This would be a good place to start your own thread to find others of similar mind.

And for a different slant, how about an agent for a fee? Here are two:

This is L. James Ward, principal of NAIN as well. For a fee, RN Agent will market you and negotiate contracts. Starts at 10% of contract and goes down if you renew. Pay when the hospital pays. But for the faint of heart or to reduce your startup work, it may be worthwhile and 10% is well below industry average.

This is Peter Mentz RN, The Owner of the website you are using, He was a frequent poster on Delphi as a recruiter and traveler and now, while still a traveler, often works as a go between travelers and the agencies, to help them get the best deals possible. He has posted this version of these FAQs.

AGENCIES THAT USE ICs In an ideal world, we would all do direct contracts with hospitals. In this world, many hospitals limit the number of agencies they use. Using one of the below agencies expands your choices and reduces your workload (and gross pay too). There are other agencies that may do this as well, particularly smaller ones. So if an agency has a hospital that you want, ask them. And please post any others that you know of that do not appear here. Posted alphabetically. The ones that starred are recommended by others or myself.

Advantage RN (866) 428-3232

Head office in Cincinnati. Posts on Delphi.

*Aerohealth Staffing (888) 905-2376

Based in Denver. Current job list on Website. They post on Delphi.

Attentive Healthcare (877) 499-7606

Wyoming based. Lots of postings that appear current.

C2 Professional Services (877) 796-5852

IC only. In Maryland. Contracts in Baltimore/D.C./Texas/Mississippi (LPNs)/ Oregon. No positions listed on website. IC rates mailed with application package.

CMSI the Travel Nurse Company (800) 437-0349

IC only but with different rates for those that would like some benefits such as housing. Based in Texas. Numerous positions on web site do not represent actual availabilities. Suggest call.

Comforce Nurse Staffing (800) 660-9544

Part of a larger company based in New York. Nothing useful on the web site. Lots of posting on Delphi for California. Mini-review from McStraycat: "I tried to work with Comforce but their approach was "my way or no way, have to use our contract, etc". They even wanted me to sign a waiver of intellectual rights. Bill rates seemed low. Passed on that." One from pattiqfe: "Run, run run from Comforce, do a search on the TNT No Recruiting board."

*HEALTHCAREseeker (888) 331-3431

New Jersey . Extensive website with old and new positions posted. Does not mention IC but McStraycat has had successful subcontracts with them.

*Hospital Support (888) 451-9996

Texas based. Either IC or employee. Web site poorly updated but lots of positions when it is. Suggest calling. Some of the best rates around.

Independent Nurse Consultants, Inc. (866) 878-8207

IC or employee. David Magee's company. Of note, he has developed an unusual business structure to "partner" with nurses. It is not required to become a partner to do assignments. Frequent job poster on Delphi. Nevada based (or is it New York?). Is now posting actual jobs on his website and on Delphi.

Medical Staffing Partners (800) 896-4164

Minnesota based. They have about a dozen "Hot Jobs" listed. Has a "Not a complete list" disclaimer.

*Medtrust (formerly Kinetic Healthcare) (866) 298-9553

Texas based. No job listings on website.

*Millenia Medical Staffing (888) 686-6877

They don't advertise IC but they do it. South Carolina based. Poster on Delphi.

National Medical Registry (800) 451-7811

Mostly California. Seem to be all corrections ER per diem $50 to $55.

Nurse Associates/Advance Nursing (866) 772-0984

South Carolina based. Per diem positions/travel contracts. Job postings not current.

Supplemental Healthcare

Many local staffing offices. 1099s for per diem work for sole proprietors. A couple of offices will let sole proprietors subcontract as well. If you are incorporated you can do travel contracts for any office per Supplemental's head office policy. Several regional offices post on Delphi.

RESOURCES - roughly in order of usefulness

BOOKSTORES! Look in the business section, sometimes there will be an entrepreneur section. Most any book on starting a business or incorporating will have a useful discussion on types of business entities. And fringe benefits. And tax rules. Skim several and you will have a pretty good handle on some of the issues and choices you can make.

Titles I can particularly recommend (with a small review):

WORKING FOR YOURSELF Law and Taxes for Independent Contractors, Freelancers, and Consultants, Attorney Stephen Fishman, MAR 2003 NOLO $39.99 368 pages

Guidance on every aspect of being an IC. The best discussion I've seen on entity choice, including S corp ability to pass through income without paying self employment taxes (haven't seen that published in an understandable way before). Information on just about everything. Topics include how to maintain your IC status, contract development (with samples), retirement and medical plans, how to get paid on time. Clearly written, with advice not found in other business startup books.

HIRING INDEPENDENT CONTRACTORS: The Employer's Legal Guide, Attorney Stephen Fishman, AUG 2000 NOLO $34.99 304 pages

(quote)
* assess who qualifies as an independent contractor
* hire ICs without risking an audit
* handle an IRS audit
* take advantage of the IRS's " Safe Harbor" law

This book is invaluable for the IC for its discussion of law as it pertains to employers. As a business owner, understanding your client’s needs is incredibly useful. And if you become a traditional agency later, it will help with the ICs that you use. Clear discussions and case law citations on some of the debates that have raged on Delphi, such as IC versus employee status. Includes CD-ROM.

CONSULTANT & INDEPENDENT CONTRACTOR AGREEMENTS, Attorney Stephen Fishman, Dec 02 NOLO $29.95

A companion book. Includes a CD-ROM with contracts for both ICs and companies hiring ICs. 308 pages

Buying recommendations: Clearly I like these books, they are the best that I've found so far. Aimed squarely at what we are trying to achieve, I would suggest the first two as references to buy (remember all the nursing texts you bought when in school)? Tax deductible if you actually start a business in a reasonable time frame (perhaps one year), save your receipts.

The book on contracts has additional useful information but I would consider it optional. Try to snag a facility contract copy from your hospital's human resource department. They will give you one that they like. Agencies spent serious lawyer money developing these contracts specific to what you want to do. And the first two books also have contract information.

All titles were readily available at local Borders and Barnes & Nobles bookstores but substantial discounts are available from the publisher NOLO- you will see an IC section on your left on their home page.

Another possibility is half.com or Amazon - Wage Slave No More (the earlier edition of Working for Yourself) is available for as little as $8. Some editions will include a CD-ROM that does not come with the current edition

IRS WEB SITES

The IRS site is full of information. You can browse the business link under contents to your left, this will take you to informative pages to read. I prefer to read the actual publications; those listed below are the ones I find most useful (There are LOTS of others). They are PDF documents for the most part. The IRS will also mail them to you for free, or you can pick them up at local IRS offices.

These are the federal schedules that the IRS allows you to use instead of receipts when away from your tax home for meals (all types of business forms) and housing (for corporations). These are the numbers used as the basis for "Tax advantage" programs and housing subsidies from many traditional travel agencies. I recommend using the high/low method for the best results generally.

Business Expenses This discusses business deductions in general and specifically for corporations. Of special interest is the discussion on Travel, Meals, and Entertainment. This publication discusses the requirements to qualify for "Tax advantage."

Travel, Entertainment, Gifts, and Car Expenses Aimed specifically at sole proprietors but certain portions apply to corporations, in particular, car expenses. This also discusses using Publication 1542 for per diems and excluding its use for housing if you are a sole proprietor.

Schedule C. Profit or Loss from Business This is the form you attach to your 1040 if you are a sole proprietor.

Instructions for Schedule C

Tax Guide For Small Business (For Individuals Who Use Schedule C or C-EZ).

Form 1120 U. S. Corporation Income Tax Return.

Form 1120 instructions

Self employment tax

OTHER WEB SITES

Canyon View Nursing Information posted by an RN who started her own agency to work as an IC. Includes an editable contract and timesheet. They have also posted a copy of these FAQs as a downloadable Word doc.

Joseph Smith is a credentialed tax professional who specializes in doing the taxes of travelers, including independents. As a traveling therapist as well, he is in a unique position to understand our needs. His web site contains useful tax information and frequently asked questions.

This site run Wendy Bisaillon, RN has useful information on general travel nurse issues and information on individual agencies. Very helpful for those new to traveling. No specific IC information.

This is an article on the pros and cons of being an independent contractor. Good introduction to the concept. You will also find a wealth of legal information here including sample contracts. Probably any legal answer can be found here with a good search.

Nursing Entrepreneurs forum on allnurses.com moderated by Nightingale1998. IC posts but little about travel. Slow server.

National Nurses in Business Association More good stuff about entrepreneurs; not aimed at travelers.

National Association of Independent Nurses (NAIN) I cannot really recommend this group (I did become a member to see what they offer) but they are attempting a political voice. They also have a members only forum that I have heard both good and bad about lately. A Pocket Guide to Independent Nursing is sold here.

"Dare to be Free" is a book by James Huffman, a nurse who has been an independent contractor since 1982. I was hoping for a Horatio Alger rags to riches inspirational biography but was disappointed. It is certainly full of encouragement for those who want to escape from being an employee. The author refers to it as a manual for freedom. $9.95 on Amazon.

"Dare to be Free" is full of ideas for independent nursing entrepreneurs. As such, at only $9.95 (78 pages) it is a much better value than the similarly themed "A Pocket Guide to Independent Nursing" by L. Ward James at $27.95 (65 pages from NAIN). Neither book is of much direct value for traveling nurses. But they may be worth a read if you are tentative about becoming an IC or want to try something away from travel nursing.

I have not reviewed these:

Entrepreneuring: A Nurse's Guide to Starting a Business

$31.95 on Amazon.

Nurse's Guide to Self-Contracting (also available for RRTs and radiology techs). Email purchase for $34.95 or CD-ROM including Word forms for $54.95.

How to Start a Nursing Agency Independent Contractor Business $99.95. Hard copy or e-mail with forms and contracts.

Cruzanvi supplied this review: "I just wanted to comment on the nursesbiz.com scam. I've mentioned this a few times in the past, but it bears repeating every now and then. I made the mistake of buying their piece of crap book 2 years ago. No one should waste their time or money on it. If you feel you must, then you can have my copy for half of their price. I'm tempted to use mine for origami paper."

This is a thread to which I contributed with ways to minimize costs. While these FAQs are mostly concerned with maximizing revenue and minimizing taxes as an independent, all three are important to increasing net worth.

PUTTING IT ALL TOGETHER So you have just done a massive amount of reading and you don't actually know what to do next. With a number of contracts under my belt now, I can provide a roadmap. These are my step-by-step recommendations. Having a laptop, printer, and a scanner to manage your business on the road will be invaluable.

Space and reliability have always been important to me so I have an Apple laptop (starting at less than $1,000 new these days) and a Canon scanner that is powered by the USB cable – no power brick! (about $40 and the size of a laptop). Portable printers cost about three times regular printers and are no better so it is your call.

I would suggest starting as a sole proprietor. Absolutely the easiest and least subject to various regulations. Your professional license passes for a business license in most states. Most hospitals will never notice your lack of an "Inc" in your name or care (although they should). And you can always incorporate later without a problem should you need it, and you will probably want to.

The easiest way to start being an independent contractor is at a hospital that you have done a contract at, knows you, likes you, and wants you back. This is how many if not most agencies have begun. Get a verbal commitment from the nurse manager and tell her that you haven't decided what agency to use. Try to verify that the agency contract that you are working under now or before does not have a do not compete clause that may derail your plans.

Now you need to start your own agency. Although I know that this whole thread is about becoming an independent contractor, the hospital will not understand it. Your goal should be to make the whole process indistinguishable to Human Resources (HR) from any other agency. Replace the words "independent contractor" and "employee" with words such as "traveler", "professional", and "RN" everywhere in your contracts and spoken language. This will keep both the hospital and the IRS happy (who will have a harder time trying to reclassify you as an employee).

Now you need to name your agency, "Travelers Unlimited" for example. This requires registering this name with your tax home state. Easy and cheap, usually around $50 and two weeks in most states. Do a web search on name registration and your state name and you should come up with a good link for an application.

Next thing to do is take care of communication issues, phone, fax, and email. Suggestions for those can be found in the beginning of these FAQs.

EIN (employer identification number). This replaces your Social Security Number (SSN) everywhere that it might be used in your business. It is good advice to separate your business and personal finances as much as possible (required if you incorporate). Technically, as a sole proprietor, these are one and the same and there is no need for an EIN unless you have employees. But particularly in our case, the IRS would like to reclassify us as employees. And as you will see, an EIN will come in handy later.

The IRS now issues EINs on the phone. (800-829-4933). They would prefer you to have a filled out application in your hand when you call them.

Takes about a week to get a written confirmation but you can request an almost immediate fax while you have them on the phone. This may be hand written on an IRS form or computer generated depending on the agent. But don’t sweat it - you don't actually need proof of this number the way you sometimes do for your personal SSN.

While you are poking around the IRS site, you might as well download a W-9 form. The hospital or subcontracting agency (more likely) may request this to 1099 you. This is similar to a personal W-4 form with your company's name, address, and EIN (or SSN if you go that way). By the way, hospitals usually will not 1099 you. You have to keep track of your revenue yourself.

Now you can take your EIN and name registration certificate to your bank of choice and open up a business checking account and credit card. Fund it with a few thousand dollars (this much needed only by sole proprietors). Your startup expenses (other than computer/scanner/printer if you don't have them) will only be a couple hundred dollars (all deductible - keep all receipts) but remember: after you start a contract, it will be at least five weeks before you can expect to have an invoice paid. This means paying out at least two months rent so plan accordingly.

Now pay everything you can through these accounts. It looks better to the IRS to keep business and personal costs separate. Some reimbursement is necessary, in particular “paper” expenses such as mileage, or 1542 reimbursed per diems or housing.

Follow through after a contract begins. I am using QuickBooks (small business financial software) to manage my business accounts, invoice, and keep track of expenses and reimbursements. You may want to send thank you notes or bagels for good will. There are estimated quarterly tax payments (as a sole proprietor) to send to the IRS and affected states. If you are running a corporation on a cash basis, you only pay the IRS in quarters in which you pay yourself.

I reimburse myself regularly for housing and per diems but only “pay” myself once a year, reducing my paperwork tremendously. Very easy as an incorporated traveler to live off these reimbursements only.

I made a decision to incorporate last year and am now a C corp. The facts were too compelling to put it off anymore. Housing was the big issue, with health benefits, and retirement savings a plus as well. Filing the articles of incorporation was a breeze in Ohio. Basically consisted of writing my name and address three times, and a couple more documents transferring rights to my DBA agency name.

Extra internal paperwork is required as a corporation, annual meetings and minutes (some states require these to be filed) but you can pay someone else to do it (search online). Lots of books and CD-ROMs available in bookstores and online with boilerplate documents that you can just copy and do it yourself. These are necessary to keep your corporation from being dissolved. This could happen in an audit but the audit has a low percentage chance of happening and also corporate “veils” are rarely “pierced” if you have kept up on the details. It also proved easy to transfer bank accounts and workers comp.

To give you a personal example of corporation versus sole proprietor; I incorporated middle of 2004 and worked for twenty weeks. My housing as expensed was about $13,000. Actual cost about $4,000. Difference: $9,000. Medical expenses (not including insurance costs which are equally deductible for all entities) was another $3,000. That is $12,000 of which I saved $4,000 on income tax. Profit share was $8,000 of which FICA savings was about another $1,200.

About $5,000 extra in my bank account in six months for incorporating. Well worth the extra work.

Do remember, business type is meaningless without a contract. I have heard stories about nurses who incorporate and find themselves unable to land a contract. You don't want to put the cart before the horse. Getting the contract is job one.

Before you incorporate, be sure to research carefully. It is especially worth looking at the actual tax returns you will have to file. I learned this important consideration from doing my state corp taxes. Although I was careful to have no net corporate income (I paid myself every dime of incoming revenue in wages, expenses, and benefits), in my state there is a franchise tax on net worth. This is the kind of situation you need to consider when you first capitalize you corporation. I just so happened to have $5,000 in my business checking account at the time so this is what I used. This was under the minimum taxable amount in my state so I still qualified for the minimum franchise fee ($50), but it was just dumb luck.

How to capitalize your business is a big topic in small business start up texts that you read but for our kind of business, taking out a loan (from yourself) never made sense to me. But if you are in a similar tax state to mine, utilizing a loan will lower the corporation’s net worth and the franchise fees.

All of these details may seem daunting, but remember that offloading the work to other professionals will not cost you that much, might even save you considerably. A tax professional or lawyer can help determine the best business structure for you (one size does not fit all) and should know about details like the one above that might trip you. There are many online companies that will help you with corporate filing in your state and help you keep up your paperwork as well. Use a tax professional for you taxes and a payroll company for withholding. Even with maximum help, professional help should still be under $1,000 initially and perhaps $500 a year thereafter.

I enjoyed doing everything myself and did not find all this too hard to learn. Just takes a while to absorb everything. Taxes were a lot of work, but now that I know how to do them, they will be a breeze next year. I did engage a payroll company. As a corporation, you are an employee and have to do all the same withholding that a regular agency has to do. That’s a lot and I can understand why so many companies, regardless of size, pay someone else to do it.

In my case, besides federal income withholding, there is SSI and Medicare, SUTA and FUTA (unemployment state and federal), three state tax agencies to withhold for, and reporting of employee 401 contributions. The payroll company made it a joy I must admit. Plug in the numbers online and the rest just happened. They debited my business checking for everything and direct deposited my wages in my personal account. Issued pay stubs and reports and I will soon get a W-2 for my personal taxes.

Got a great deal, two years for free! Mind you, these payroll companies make a lot of their money on the “float”. An IC friend of mine pays $25 a month for his payroll service and considers it well worth it. I’ll have to see in two years, that is a lot to pay for one payroll a year and there are lots of computer programs to make it easy.

You can easily find these companies online. And they will negotiate with you. The name of the one I’m using is called City Pay. Not even sure if I can recommend them, I’ve done no research and don’t even know their rate structure. But you can ask them if they still have the two years free deal.

I am not expecting to update these FAQs further. They have stood the test of time well and barring any major tax code revisions, should stay valid for years to come. Some of the links will eventually break but you can search for similar information. And business will still be business, and the travel nurse business is not going to change dramatically in years to come. But in the meantime, I will continue to respond to any questions posted here.

This information is posted from its author NedRN an Independent Nurse Traveler.

Again NurseTraveler.org is not responsible for the content or the accuracy of this page but has reproduced it for the benefit of nurses who might be interested in this kind of working methodology.

peter@nursetraveler.org

Please Note: This site is for information only.  I do not advertise jobs on this website. I am NOT responsible for any of the content on each of the companies web pages. If you have a problem with a company or their content please email them directly.  Thank you!