The fact that the pandemic changed everything shouldn’t be new news to you.
Everything from the number of folks who lost the COVID battle to retail and food places shutting down, let’s face it. Things may never go back to what we once knew.
Despite all that, one thing has remained steadfast: the side-hustle economy. From food delivery, grocery pick up, and even ride shares like Uber, these companies not only survived but continue to thrive. So what does that mean exactly for travel nurses?
It makes a pretty decent argument for working on 1099 vs. a W-2.
One thing the pandemic did was shift the way some nurses get paid. What had been reserved only for medical doctors, CRNA, and other licensed professionals are now available to us.
All of us travel and contract RNs.
What’s the difference between W-2 and 1099?
Before getting into some nitty-gritty, it’s always best to check with a finance or tax pro before making many leaps.
But I digress…
This is how a popular tax system, Quickbooks, explains the 1099 and W2 thing:
“1099s and W-2s are the tax forms employers use to report wages and taxes withheld for different workers. 1099 workers are also known as self-employed workers or independent contractors. These workers receive a 1099 form to report their income on their tax returns. W-2 workers are also known as employees. Your company employs these workers directly, receiving regular pay and employee benefits. You’ll use a W-2 tax form to report annual compensation and payroll taxes withheld from their compensation.”
Well, guess what, my travel nurse friend.
Those very same rule of thumb applies to the healthcare industry and often to travel nurses as well.
In the same way, that a facility will contract a CRNA or locum tenens physician, many travel nurse companies offer the same benefit to travel and contract RNs.
But buyer beware, each tax status has its own pros and cons. Know your options because many hospitals and facilities are changing their tactics and policies post-pandemic.
Financial autonomy and freedom
Not all, but many travel nurse firms now allow you to remain a W-2 employee or hop over to 1099 status.
Personally speaking, and as a travel RN veteran, I always seek the 1099 route as I have better control of my money in and money out. I prefer to manage my own cash flow and reimbursements vs. having an employer do it all for me.
And to be clear, I have always used an accountant to help me with my end-of-year taxes and make sure I have no hiccups come April tax season.
My thought process is why should I let Uncle Sam take and hols 30% of my paycheck only to refund it each year. I can do that for myself and have been for 20 years running now.
Becoming a 1099 worker is more than just “taxes,” though.
It’s a mindset shift that says “I’m a freelancer” or “I’m a nurse entrepreneur” vs.” I work for the man.” In short, it’s a lifestyle change too.
Being able to call myself a nurse entrepreneur has opened up endless possibilities.
Make more money
Do you know what always pained me? If I worked for $60 an hour and saw $20 of that go to taxes.
I always wondered why I couldn’t handle my own as an entrepreneur does.
As a 1099 contractor, I collect the full $60. And yes, I do pay taxes on that, but the point is the money collects interest for me; I have the benefits of business write-offs, and as I mentioned earlier, being a nurse entrepreneur is a massive mind shift!
The final word
So, what does this mean for travel nurses?
It means that there are more options than ever before regarding how you get paid. You can now choose to work on 1099 vs. W2, and each has its own set of pros and cons. If you’re looking for financial autonomy and freedom, the 1099 route may be a good fit for you.
Just remember to seek the advice of a financial or tax professional before making any decisions.
To learn more about the travel nursing opportunity and cities across the country, visit Bestica Healthcare and start planning your next assignment today.