Hey Sharon, today we're going to be talking about some steps and how to manage your 1099 business as a CRNA. We're going to, this is going to kind of be a once-over, you know, kind of an overview of some things you need to be thinking about, whereas some of the other sessions get a little more detailed. This is kind of more broad to make sure they understand the financial implications of being 1099, as you well do now that you're 1099. I probably needed this before I went down this path. Yeah, well, you know, it's a good primer, I think for most people anyway. So the first thing to understand is, you know, what is a 1099 business? Because you're no longer a W-2 employee. Basically a 1099 is a tax form that you get when you're not an employee. So they're going to send this to you. We call people 1099s, but really kind of like a 401k is a section of the IRS code. A 1099 is actually a form that is recording how much money you made throughout that year. You're self-employed, and that means that you can be a contractor, you can work for hospitals, you can work for groups, you can work for clinics, you can work at dentist offices, pretty much anywhere a CRNA can work, you can typically contract to do that. The benefits to this is, you know, one thing that I know every CRNA out there just really doesn't care about, Sharon, and that's control. None of you care about control, right? You included. And that controls really over your work schedule, when you work, how much you work, which in turn, you know, it kind of goes to how much you make as well. You can even figure out what kind of patients you want to treat. I mean, you know, if you don't want to do PEDs, don't take any assignments that are going to stick you in PEDs. If you love doing eyeballs and buttholes, hey, there you go, you can choose that too, right? But all this choice comes with additional responsibilities and additional risks. You're going to be responsible and you're going to take the risk on of handling all your taxes and other expenses that would typically be paid for by your employer, the hospital, the group, and so forth. You're also going to be having to take care of your liability insurance, your retirement planning, your disability insurance, all those things. You're now assuming that risk because you went 1099. But Sharon, as you and I know, and, you know, our viewers will soon know, we feel like for the majority of CRNAs, that risk is worth the reward, right? First thing you really are going to have to understand is income and expenses. But as I say all the time, typically the more money people make, the less that they pay attention to income and expenses. But the first thing you're going to have to do is you're going to have to track that income. When that money comes in, you're going to have to track that. You know, how much came in? Did I get paid the right amount? You know, usually when you're W-2, you got your check every week. You know, oh, well, it's this amount. I worked some overtime, so yeah, it's a little more. We're good to go. You want to make sure that whoever you're working for is paying you the right amount. Are they paying you the right hourly rate? Did they pay you for the right hours? Because this week you might work 42 and last week you only worked 35. So you need some sort of system to track that income. You also need to have an ugly B-word, Sharon, and that ugly B-word is called a budget. And people hate that word, especially my CRNAs. But you've got to have a budget to manage those expenses that come along with being an independent contractor. How much income came in? How much expenses do I have each month? Is my business profitable? Yes, I'm getting paid, but is it profitable? Is it worth it for me to do this? Then the last thing is, you know, keeping track of your business expenses. You know, medical type equipment. You know, your stethoscope. You know, you need a new stethoscope, Sharon? All right. You go to an ANA meeting, guess what? Before, when you were W-2, that was a non-deductible expense, but now you're 1099, that is now a deductible expense. Or utilizing your automobile and mileage expenses. All these things have to be tracked. So again, yes, I think people always see the top line number. Yes, 1099 CRNAs do make more money, but there's more things that go along with it. And these are just a few for people to think about. So we'll kind of go here and we'll kind of talk about taxes a little bit, because people don't like to talk about it, but they do like to talk about it. So as a 1099 CRNA, you are required in most cases to pay estimated quarterly taxes. Sharon, I know that you do this sometimes. I do this all the time. But, you know, making an estimated tax payment is not fun, but it is a necessary evil. How much money did you make this quarter? If you're an S corp, you might've taken a salary and your salary was taxed, but if that business was profitable, that profit in the business, you still have to pay taxes on. So you've got to make an estimated tax payment for that profit. So those estimated tax payments are going to be one thing you're going to have to do and make sure you budget for. You also have to pay self-employment tax. We've got a whole section on self-employment tax. Remember, self-employment tax is Social Security and it's Medicare. When you're W-2, your employer pays for half of that, you pay for half. Now that you're 1099, you have to pay for both sides, so we have to plan for that. Tax deductions. We want as many deductions as possible, right, Sharon? Exactly. Home office costs. Yes, if you've got a home office, Sharon, you were saying a little while ago, you've got to buy a new printer. Well, that's a deductible expense because you're printing out your assignments and making sure you're going to the right places and you're carrying your own business. You buy a new computer. Those are things that you could potentially tax deduct as long as they're used for business. There are a lot of deductible things that you can do now that you're 1099 that you could not do before. And again, we've got a whole section on that as well. And then tax planning. You should be working with someone who can help you plan for taxes. Now, Sharon, I know that CRNAs are smart. I know you guys know everything about anesthesia and you're an amazing provider and you're smart people, but it's one thing about taxes. If someone chooses to do their own taxes and doesn't have all the information out there, they'd be like me going and giving my own anesthetic because tax laws change every single year. I mean, right now, the tax laws are potentially going to change and we're in the middle of tax season right now. They're looking at changing over a hundred things from last year for the tax season that's going on now, currently. I mean, it's amazing. It's one thing about taxes is that they're always changing. Make sure that you've got somebody in your corner that understands that and can help you work through these tax law changes. Liability insurance. And Sharon, we didn't put a lot on this slide, but I think it's important to have this discussion. These are kind of what I call the basics, all right? This is, you hit a single, somebody knocks you into the second, then they take you in the third, and then maybe you come home. Liability insurance, malpractice. This is one of the most important things you guys can do as a CRNA because you do have liability out there if something goes wrong. Make sure that whoever you buy your policy from, one, is going to be there to support you. Sharon, you and I are somewhat partial to ANA and ANA insurance services. I've seen them have people's back throughout the years. I know that they've got a policy that supports CRNAs and has CRNAs best interest at heart. And ANA has done this for years and years. So that is one of the options out there for you to buy your malpractice policy. And I think it's a very smart option for you to entertain as a CRNA. Sharon, you've heard me say this before. You are a goose. That laid the golden egg. There you go. That's right. You are. And the goose that laid the golden egg is becoming a CRNA and being a CRNA. Now you have to protect yourself as a CRNA to make sure that your future income stream continues on because things like this, you do not want to mess with. You don't want to go with a subpar company and have a problem that costs you a lot of money. Or, Sharon, the other part of that is who do you want making decisions about settling claims? Do you want to be in charge of that or do you want some insurance company in charge of that? Again, all reasons to make sure you've got the right type of malpractice policy. And we've got an entire module on malpractice insurance through the AANA where they will allow you to retain your own attorney. You will not be grouped in with another attorney if you're named in a suit. Sharon, another part of this and a big part of my world is retirement savings options. I think when you transition from W-2 to 1099, you are giving up one typically a match at your employer to a retirement plan that you can save money for the future. There are ways to save for retirement. You can do a traditional IRA or Roth IRA. We've got a section on the Roth IRA. I think most people understand what a traditional IRA is. There's typically an income limit on the traditional IRA and the Roth IRA. But if you don't have another retirement plan, another 401k or another SEP IRA or anything to contribute to then you can still make a deductible contribution into a traditional IRA as well. But if you've got another plan that you can participate in, you're subjected to those income limitations and we've talked about that in another module. The solo 401k, this is a great option. If you're earning a good income, it allows you to save a lot of money. Again, we've got another section that talks about this and the benefits, but these are vehicles that are available to you to save for retirement. And then making a plan for retirement, Sharon. Most people have a reason that they're transitioning to 1099. That reason can be lots of different variables in it. It can be to put their kids to school. It can be that they're behind saving on retirement and they need to save more money. Making sure that you've got a retirement plan for life's what ifs and when you get to retirement. I think that's a key here. What tools should you be using? Well, you've got to manage your finances. You got to manage your tax. There's a lot of software out there that allows you to kind of streamline all this stuff that you've got to do. Sharon, I know that a lot of CRNAs have to invoice on a weekly or bi-weekly basis, right? I do sometimes myself. Yeah, so you come up with an invoice, you send it to whoever's going to pay you and then they send you a check or do an ACH. But you've still got to come up with that invoice. You've got to track your time and you've also got to track things such as tax management. There are a lot of services out there that will help you, bookkeeping folks that you can outsource. You could use QuickBooks yourself. And then if you're like some people I know, you can mess up the QuickBooks and somebody's got to help you straighten it out. Excuse me. I mean, I didn't say any names. I just said something. Don't look at me. But it is important. And I'll tell you again, for the little amount of money that you're going to pay for someone to help you in most cases, it's not going to be worth the hassle and the headache for you to go through and do this. Now, some people are really inclined and they're great at it. I get that. Those people I'm not talking to. The majority of CRNAs, they hate this stuff. They absolutely detest it. I'm married to one. I can tell you this is not her thing, nor will it ever be. Sharon, you're trying to learn it. And I think that's great. And I think a lot of CRNAs are smart enough to do it. But then I also think if it takes you an hour a month to go in and do this and keep up with it and do everything, that hour for you is worth $200. Somebody just to do your books is not going to charge you $200. So anyway, I digress on that point. But then making sure you've got a good tax professional, like we talked about before, someone that can kind of help you go through the process and so forth. But make sure you've got the right tools in place to manage your business and do it properly. How do you stay organized? Making sure that you're regular reviewing your books. I don't care if someone else is doing your data. I don't care if you're doing it. Take a look at it. If you're on QuickBooks, go in there and look at your profit and loss. Once a quarter, how much did I make this quarter? Wow, okay. You can run a P&L and say, okay, well, where are my expenses? Okay, well, gosh, I didn't realize I spent that much on this. And then you come down to the bottom line and you say, okay, well, my business, after paying me, made this amount of money. Keep either a digital or paper trail of all these expenses and everything that you're doing. Now, I like to use the digital on expenses, but I can tell you that I am a paper person as well. I keep paper copies of about everything. I stick it in a file at the end of the year. And then that way, if anything ever came back, I've got it digitally and I've got it paper. The other thing I think you wanna make sure you need to understand is what are the ongoing rates out there? What are people making? Because when you're setting up contracts, you're working through an agency, you wanna make sure that you're on top of what 1099s are making. I had a CRNA not long ago. And right now, the going rate is somewhere around $200 an hour doing 1099. Give or take, some are a little over and some are 190, 195. This particular CRNA was working, he was taking call, working through a company in a small rural hospital, and they were paying him 140 an hour, 1099. I said, do you know what the going rate is? No, I said, it's close to 200. I said, you need to either go to them and let them know that you know this, because I know they know it, or you need to find another position if they won't come up on this. And the next time I saw him, he goes, hey, you know, we talked about it and they're giving us a $50 an hour raise. We're at 190 now. So keeping up with that, the ANA does their compensation of benefits study. Again, it's something to hang your hat on. There's not a lot of people. I think usually they get 2,000 or 3,000 people to participate, and not a lot of data out there, but there's a lot of data on what 1099s make. Make sure you know that, and when you go in and negotiate that with whoever you're gonna be working with, make sure that you let them know you know that, because that's important. It's one of the main reasons you transition.

1099 business

CRNA

financial implications

taxes

retirement planning