White Coat Investor Podcast WCI #20: Comparing Independent Contractor Jobs with Employee Jobs
Jul 19, 2017
This discussion dives into the critical differences between independent contractor and employee roles in healthcare. It highlights tax implications and strategies to enhance financial outcomes for medical professionals. The conversation also addresses managing high expense ratios in retirement accounts and fiduciary responsibilities of employers. Investment strategies, including the advantages of index funds and ETFs, are explored alongside the benefits of teaching children about Roth IRAs to nurture financial literacy from a young age.
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Choosing Between 1099 and W-2
- Consider both halves of payroll taxes and benefits when comparing 1099 vs W-2.
- Prioritize job factors like location and colleagues over this minor financial difference.
Deducting Business Expenses
- Independent contractors can deduct business expenses more easily than employees.
- Employees face a 2% AGI floor for unreimbursed business expenses on Schedule A.
Incorporating as a Physician
- Avoid incorporating if you're a sole proprietor without employees; it won't shield you from malpractice liability.
- Form an LLC for similar liability protection and tax flexibility.