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Frequently Asked Questions about Independent Contracting

 

Is independent contracting legal?

Yes! The United States thrives and supports small business and sole practitioners/proprietors account for much of the nations' jobs. As long as an independent contractor reports income properly there is no dispute with our government regarding operating as an IC. 

 

Why are nurses who function as ICs allowed business deductions that employed Nurses are not?

The rules for business professionals who chose to work as ICs are the same for all professionals i.e. physicians, lawyers, accountant etc. The key is not that you’re a nurse but that you are a nurse in business. Business owners, because they tend to contribute more to the economy, are allowed certain deductions to support their business growth, development, reinvestment (education), business owner benefits, proper accounting, legal assistance, insurance (protection), retirement and marketing. The allowable deductions and rules for what is normal and customary have been developed over a long history to help develop business. Your accountant and other business owners are very familiar with what expense are allowable.

 

How do these business expenses help me?

If you are currently working as an employee, you may have many expenses relative to keeping your professional skills current and your assets protected as well as travel expenses, home office expenses, professional functions, memberships, publications, etc. that are not deductible as an employee. As a business owner, these expenses become deductions thereby reducing your taxable income (AGI)...and your taxes and social security or other taxes such as Medicare contributions are calculated based on income.

In addition, if you are married, your adjusted income, as a business person, is now the number used for calculating your joint tax return and you and your spouse now apply all your "family" allowable deductions such as child care, education funds, interest deduction, IRAs etc.

 

Are my expenses as an IC for Social Security and Medicare higher than I pay as an employee?

The taxable amount does goes up because right now your employer and you pay the same amount into Social Security (5.6%).  When you become an IC, you do pay both parts BUT on the adjusted number so it normally works out to be about the same. As you make more money, you could pay more unless you also set up special retirement plans only available to the self employed. 

 

This sounds like a lot of work, are Nurses really successful when they convert to an IC?

The answer is yes! Being self employed and the opportunities to be self employed have grown vastly. Everyone is trying to grow wealth and keep more of what they earn legally. Our government has been quite supportive of self employed people as they learn to save, invest and take care of themselves by using what is allowable. This does not mean employed persons don't do their best to achieve more financial independence but the rules are just different and they do benefit people in business. Many accountants who are used to working with nurses and physicians have good educational packets, expense tracking formats and tools to make the transition easier. Like all things new, you have to spend some time learning the rules and setting up your system but it is worth it in the end.


As an Independent Contractor, what business deductions am I eligible for?
When you contract with SNI, you are considered to be self-employed and the sole-proprietor of your nursing service. Therefore, you are eligible for small business deductions, which in turn reduce your taxable income. To learn more about Independent Contracting and Investment options for Nurses, be sure to attend one of the exclusive SNI Wealth Building Seminars for Nurses held quarterly in Horsham, PA. Dates for the next seminar can be found on the front page under “SNI Events”.
 
How soon can I expect to find work after I complete my paperwork?
Once a Nurse completes the required paperwork and is approved to proceed, the Staffing Coordinators begin immediately building their own working relationship with the new nurse contractor and coordinating what you are looking to do with what the hospitals are looking to fill or vice versa. Some flexibility may be needed on the contractor’s part when booking orientations, which are based on the hospitals schedule, but the Schedulers work very hard to get you working when, where and how often you choose.
 
Are there a minimum numbers of hours I am required to work? What about holidays and weekends?
As a Nurse Independent Contractor you will now enjoy the freedoms to work according to your personal schedule and book time only as you would like to work. If you do not want to work a holiday or a weekend, simply do not schedule yourself. Our Schedulers will contact you to offer shifts in various facilities within your region but you will always have the final say on what you confirm and accept to work. Remember, Contracting is all about freedom, flexibility and quality of life.
 
I am a single Mom and not sure Contracting is right for me since benefits are so important for my children and myself?
Here at SNI we contract with Nurses from all backgrounds, specialties and lifestyles and many of our Nurses are raising their kids while learning how to retain more of their earnings, work flexible hours convenient to your kids schedules and maintain independent medical and dental insurance as a small business owner. SNI is the ONLY agency to offer Wealth Building seminars for nurses which connects you to various professionals like yourself who are able to help you maintain the same or an even higher standard of living through Wealth and Health Training. Dates for the next seminar can be found on the front page under “SNI Events”.
 
Contracting seems a bit overwhelming to me right now. I prefer an employee-based job so I don’t think SNI is the place for me right now?
SNI also offers a Permanent Placement Search option to professionals seeking out specific healthcare related jobs. This is a fairly new service through SNI and we have matched many nurses to great facilities offering top pay and benefit packages. Whether you choose Contracting or Permanent Placement, SNI has the options most important to you.
 

How does independent contracting work?

As a professional RN or NP you hold a license which allows you to practice as an independent professional meaning you have a body of knowledge , standards of practice and expected norms which allow you to practice as an independent contractor or an employee. Much like physicians, accountants, lawyers, etc you have a choice to be employed or to broker your services through an agency and operate business wise as a self employed professional, LLC, or corporation.
 
If all nurses and nurse practitioners can work as IC’s (independent contractors) why don't more nurses choose this option?

Many nurses have never been educated regarding the business advantages of being an IC so they simply do not know if the option is good for them.  Historically, most nurses were employees and most physicians were independent. The Times are Changing!  Now, you see many physicians in employee options (some happy and some not) and nurses seeking more professional options, multi-system experiences and financial freedom. Especially now, given the economic down turn, independent contractor advantages are worth examining.

 
 
If none of the above answers addressed your concerns please do not hesitate to contact Wanda Kartal directly at 267-532-1617 and she'll be happy to assist you.
JCAHO Certified Advanced Registered Nurse Practitioner