Check out the timestamps below to help you navigate through the many topics we discussed.
On This Episode:
As a CRNA, transitioning to 1099 work can be a game-changer for your career and financial future. Sharon made this move in recent years and is sharing the experience in a series along with Jeremy’s insight on the financial side of the transition. This three-part discussion is aimed to help educate other CRNAs who are considering the move to 1099, and today’s episode will be a bit more detailed with a focus on the tax concepts and strategies you need to know about.
Health Insurance: The First Hurdle
One of the most pressing concerns for CRNAs considering the switch to 1099 is health insurance. options, including COBRA, the Affordable Care Act (ACA), and Health Savings Accounts (HSAs). We’ll highlight the importance of understanding the nuances of each option to make an informed decision. For instance, COBRA allows you to keep your current insurance for up to 18 months, but it can be expensive. On the other hand, ACA plans offer no pre-existing condition exclusions and potential subsidies, making them a viable option for many.
Tax Deductions: Maximizing Your Savings
The core of this discussion is about the tax deductions that can significantly impact your bottom line. We’ll highlight the importance of Section 179, which allows you to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. This can be particularly useful for CRNAs who need to buy expensive equipment or vehicles for their practice.
Home office deductions are another critical area. We’ll share the regular and simplified methods, helping you determine which is more beneficial for your situation. The regular method involves calculating actual expenses related to your home office, while the simplified method offers a flat rate deduction based on square footage.
Retirement Planning: Securing Your Future
Retirement planning is another piece of this transition often gets overlooked. We’ll cover the various retirement plans you can utilize as a 1099 CRNA, including SEP IRAs and Solo 401(k)s. There are some advantages to the Solo 401(k)s, which allow both employer and employee contributions, making it easier to maximize your retirement savings.
Qualified Business Income (QBI): A Hidden Gem
One of the key financial topics we’ll tell you about is the Qualified Business Income (QBI) deduction. Introduced in the Tax Cuts and Jobs Act of 2018, QBI allows eligible self-employed individuals to deduct up to 20% of their qualified business income. However, there are income thresholds and phase-outs to consider, especially for service-based professions like CRNAs. Financial advisors can provide you with actionable tips on how to manage your income to take full advantage of this deduction.
Transitioning to a 1099 status as a CRNA offers numerous benefits, but it requires careful planning and a thorough understanding of tax laws and financial strategies. We hope this three-part series helps you understand what’s most important and where you need to focus if you decide that 1099 work is best for you.
Here’s some of what we discuss in this episode:
- The three main health insurance options that 1099 workers typically choose from.
- What’s so important about section 179 of your tax return.
- What deductions can you take and what can’t you take.
- The retirement saving options you have and what’s best.
- The Qualified Business Income deduction and why it’s a hidden gem.
Preparing to Become a 1099 CRNA – NCANA Session 2
Does It Make Sense for CRNAs to Go 1099? – NCANA Session 1
The 1099 CRNA Institute: https://aana.com/1099
***Use coupon code BEYOND1999 to get 20% off through November 2024
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"If you want to retire early, you've got to figure out your healthcare situation first."
- Jeremy Stanley, CFP®
