My 2024 Locum Business Expenses

These are expenses for a full-time locum CRNA running 50 weeks per year. This does not include the salary of two employees (Mrs. TFC and I). Nor does it include retirement contributions. That was discussed in last week’s post.

I worked with 4 hospitals in 3 different states. This is a good way to compare W-2 and 1099 packages. I’ll explain each category as we go.

My pet peeve is using the term “write-off” to describe a business deduction. Nothing is being written off. These are expenses incurred by a company. Nothing is free. These are ordinary and necessary costs of doing business.

At best, it’s like having a coupon for your marginal tax rate. Maybe a 30% off coupon because these are pretax dollars.

Regardless, it’s still money spent. I’m not yet in the “spend $1 to save $0.40” crowd. I don’t really play in the gray area. I keep my expenses reasonable, ordinary, and necessary.

Health Insurance – $17,880

Like most employees, my employER covers health insurance for our family. Premiums are $1,500 per month for a young family of 3. We have good insurance through Blue Cross Blue Shield. We opted for their coverage because they have in-network coverage nationally.

As a sporadically moving locum, it’s worth the increased cost to remain in-network.

Provided you are not offered health insurance elsewhere, the LLC can purchase the insurance and cover premiums. At my last job, I paid $200 per month and Mrs. TFC paid the same. That equates to $400 vs $1,500.

Malpractice - $2,287

I have coverage through the AANA. It’s occurrence coverage which is generally preferred over claims made. No tail needed.

I have been practicing for 3 years. As I add years and cases, my rates will increase. Recent rate increases have been pretty drastic. I would guess malpractice costs could reach $8,000-$10,000+. More with a history of claims. Rates vary by state.

Licensure - $1,318

My AANA membership is in this category for $700. I hold licensure in 5 states. I hold a couple RN licenses due to an address change and non-compact states. I would estimate CRNA and RN licenses to run about $100 for a two-year license in most states.

This amount does not include a DEA license which runs something like $888. If you cover multiple sites concurrently, you may need a second DEA license. Transferring locations can take up to three weeks

This does not include my BLS/ACLS/PALS certifications. I’m due for those at the end of 2025, so this was my off year. The licensure category could be higher, but I wouldn’t count much more than $2,000 annually unless you plan to hold licensure in 35 states.

Fuel - $3,825

I traveled a great deal week to week. Sometimes Monday through Friday one place, then drive 400 miles round trip to cover a weekend elsewhere. Fuel costs were for a truck that doesn’t have the greatest efficiency. However, traveling as a family would not have been doable in a car.

Many guys with trucks get flack because they don’t use the truck for truck things. Well, I can tell you that we loaded the bed of this bad boy multiple times per month. Would recommend a truck with a topper if traveling with a family.

The current government mileage rate is $0.70 per mile. This covers fuel and maintenance. It sounds like a lot, but it’s enough to break even. Make sure you have round-trip milage. I never had paid milage during an assignment, but my intra-assignment drive was always reasonable.

Vehicle Maintenance - $1,000

This includes oil changes every 5,000 miles for $85 each. I changed fluids on my truck at the 100,000-mile mark for $500. I’m due for tires soon. That will be another $1,000 easily. Probably due for brakes this year. Another $800+. Still cheaper than buying a new vehicle.

So the few thousand dollars in milage for 2024 will be eaten up pretty quickly.

This is my personal vehicle. The amount of vehicle used for business activity is the amount of deductible expenses.

If I use the truck for business 80% of the time, 80% of maintenance is a business expense – $800 Business, $200 Personal

Housing - $22,655

This is an inaccurate number for a few reasons. There were many weeks where the hospital or agency paid for housing. There were weeks where we paid for housing, then submitted for reimbursement.

Basically, this was a push. Most locations had a nightly stipend of $100-130. Expect about $1,000 weekly for a three-star hotel level stipend. My cost here was the $25 per night pet fee incurred when staying in hotels.

Look for housing coverage the night before and through the end of an assignment. You don’t want to get stuck paying for housing on the weekends if you relocated for an extended assignment.

Government daily per diem lodging rates vary by location and time of year. Expect something like $110 per day. You can check online at GSA.gov. We took true costs, so the government rate didn’t apply.

Food - $13,711

I don’t think $275 per week is too bad considering how much we traveled. There is no meal prep when getting ready to relocate for the week. Food costs drop dramatically when at long-term assignments.

Eating out sounds fun, but when it becomes a way of life, it’s not. It’s tough to find something quick, convenient, and healthy that allows you to get on the road so you aren’t rolling into town at midnight to start at 0630 the next day. We have all been there, but best to avoid.

This is generally a 50% deduction, so not dollar for dollar. If providing meals for all employees, there is a 100% deduction. There were recent changes with deductibility.

One facility included a $30 per day stipend for food. One facility provided food for breakfast and lunch. Most did not. Per diem rates are between $68 and $92.

CPA - $3,000+

I find this to be a good investment when filing as an S-Corp. I did my own taxes for the longest time, but it’s becoming too much of a time commitment.

My tax bill is no longer thousands of dollars. It’s hundreds of thousands of dollars. Don’t get me wrong, there are far more expensive tax bills out there, but a six-figure tax bill feels pretty big to me.

It’s worth paying someone for their guidance. A single tax strategy pays for their services. And they complete the retirement contribution forms. And deal with the 1099s from different income sources.

We pay for QuickBooks. The expensive version where our CPA can log on remotely to answer any questions. We do our own payroll, so no cost there.

My time is more valuable giving anesthesia than struggling through tax forms.

LLC Related Fees - $700

These were from the end of 2024. LLC are fairly straightforward to set up yourself. Due to unforeseen circumstances, I had an attorney set up my current anesthesia LLC. Cost was $625. LLC maintenance fee or filing fee with the state for 2024 was probably $50.

Bank accounts and credit cards were free to acquire.

Going forward, I would set up my own. Each state is different. Single member LLC works for most states.

CME - $0

This year, I took quite a few of the free credits on the AANA website from the journal. I also had some class B credits from working with SRNAs.

When work slows down, I would like to attend some conferences, but for now, full speed ahead.

Other Expenses

I won’t include expenses such as salary, retirement contribution, or taxation because that is drastically different for each independent contractor. Taking a $40,000 salary is way different than a $400,000 salary. Working in a high tax state such as California has far greater tax implications than Nevada. There are an infinite number of scenarios, so plug and play.

I also don’t use section 179 regarding depreciable business equipment, i.e. cars, trucks, and airplanes.

Not a great idea to have the company cover disability policies. Basically, the payout is viewed as income and taxed. It’s better to pay disability out of pocket.

We can talk about the home office, utilities, the Augusta rule, cell phones, and the kitchen sink, but that’s not this post. This post is what I spent in different categories as a full-time locum, not potential business expenses.

W-2 vs 1099

When comparing W-2 vs 1099 packages, there is a lot that goes into it.

Things that are not included in this list are PTO, sick leave, retirement match, and disability insurance. Then consider aspects of the job such as relative stability.

Even within this list there is variability. Say you have $5,000 in annual CME. Does this cover the conference and all related expenses? Is it difficult to see your refund? What restrictions are in place? Do you spend this much every year?

If you no longer had CME dollars, what would you really be out?

Did you use a CPA as a W-2 employee? Would your costs change as a sole proprietor using a CPA? Probably not, except that your CPA costs are now deductible.

As for retirement contributions and the solo401(k)…Mrs. TFC and I qualify for $162,500 in tax-advantaged dollars between the solo401(k), IRA, and HSA. Folks make a big deal about the advantages of self-employed retirement accounts, but how many CRNAs do you know investing $162,500 into retirement each year?

If those are Roth investments, account for the taxation on the contributions. In total, this eats up $200,000 of gross income to fill those accounts. That $200,000 doesn’t include salary (and the associated taxation), debt paydown, or investments into a bridge account. We are realistically talking about a very high savings rate of 70% or a very high household income of $750,000+ or both.

Most CRNAs just don’t save that much, so is it really that significant of a perk?

We can talk about macro personal finance goals and strategy til the cows return from pasture, but again, not this post.

Summary:

The costs of going 1099 will be between $10,000 and $25,000 unless you go out of your way for additional expenses. I’m talking about company vehicles and the like. If you plan on earning $200,000 per year, your fixed costs are a much greater percentage than if you plan on earning $600,000+.

Travel locums will have significant travel and lodging costs, most of which are covered in the contract. Probably $1,000 per week for housing and $0.70 per mile round trip.

Local locums will eat these costs, but they also have the luxury of sleeping in their own bed at night.

It’s tough knowing what you don’t know. There isn’t a great way to pinpoint income and expenses in the locum world. It’s too unpredictable. Run calculations with an acceptable margin of error and commitment. Good luck! Thanks for reading.