Why 1099 Medical Professionals Need to Think Like Business Owners
Medical professionals paid via 1099, do you know your situation is more similar to a big business than a W-2 employee? You are considered self-employed in the eyes of the IRS.
This one detail changes everything about how you approach your career, your money, and your future.
If you receive a 1099 you are a business owner, not solely a clinician.
As a physician, NP, PA, CRNA, therapist, OT or other type of medical consultant working independently, you’re not just providing care — you’re running a business. The IRS doesn’t view you as an employee; it views you as self-employed. That means you’re responsible for things that W-2 employees never have to think about:
Tracking and reporting your own income
Managing quarterly tax payments
Choosing your business structure (sole prop, LLC, S-Corp)
Covering your own benefits and retirement planning
Protecting yourself with the right insurance and contracts
In short: you’re the CEO, the CFO, and the chief compliance officer of your medical contracting business. If you don’t empower yourself in these roles, it can create problems for you and your business from a financial perspective. At the very least, it can cause you to not think strategically about your financial present and future, which is why you need to be aware of the risks of thinking like a W-2 employee, as outlined below.
The risks of thinking like a W-2 employee
Many independent clinicians step into contracting or locum work without realizing the shift in mindset required. If you treat your 1099 medical contracting business like a W-2 job, you may:
Miss out on significant tax deductions
Overpay the IRS by thousands each year
Lack a plan for retirement contributions
Leave yourself vulnerable without proper contracts or insurance
Struggle with inconsistent cash flow
It’s not just about compliance — it’s about confidence. When you don’t have a financial strategy, you stay stuck in survival mode instead of building long-term stability and wealth. This is where working with a specialized finance team can truly make a difference and help you both understand and take care of the financial compliance aspects of your business and also optimize and build your financial foundation and security for the future.
The good news? Independent healthcare professionals have enormous opportunities when they learn to think like business owners. You gain the ability to:
Reduce your tax liability through entity selection and deductions
Build flexible retirement plans (Solo 401(k), SEP-IRA, etc.)
Create systems for steady cash flow and a solid understanding of the health of your business
Build your medical contracting practice on your terms
Enjoy the freedom that financial independence can truly bring
Remember, if you’re paid on a 1099, you’re not “just” a contractor — you’re a business owner. The sooner you embrace that identity, the stronger your financial foundation will become, you will reduce risks, and strengthen your financial position.
Creating a healthier contract medical business starts with a solid financial foundation.
Connect with VirtuallyDAWN to learn more about leveraging specialized financial services and advice to protect and grow your medical contracting business from the ground up and proactively for years to come as you establish and expand it.
