Taking power into their own hands: How California nurses are taking control of their lives and making more money by taking advantage of the S-Corp right now!

Nurses are bad assess. That is something we should all know by now. Nurses can also be their own boss as well as business owners. That’s something many of us probably didn’t know.

It’s true though.

Nurses in California are being incentivized to ditch the traditional route of being a full-time nurse locked into one hospital or facility. Instead, those hospital and facilities are asking nurses to become independent contractors. Buy why? The answer is simple. Flexibility. When hospitals and facilities pay nurses as W-2 employees they have to deal with paying things like employment taxes, benefits, and retirement plans. Not to mention, the California Labor Laws they have to abide by such as time off and sick leave. You might be thinking; “Wait, aren’t these good things for nurses.

Why would they want to potentially lose those benefits”?

You are right. Those benefits are really important to any employee, not just

nurses. Those are benefits that unions striking and picketing at one point.

So why are nurses okay with giving this up?

Money! Well and flexibility. The average salaried, registered-nurse in California makes anywhere

between $35 to about $80 dollars an hour based on things like experience and location. This amounts to anywhere between to about $72,000 to $166,000 a year. Not bad at all. Of course, you have to take into account things like income taxes. Not to mention paying for things like gas, food, scrubs, etc. Also, if a registered nurse does want to take time off, they are

subject to their employers schedule.

What about contract nurses? How are their lives different?

Well, let’s start at the money. A contract nurse gets to set their price. It is not uncommon to see facilities pay contract registered nurses anywhere between $100-400 an hour. The caveat here is that those facilities aren’t paying the contract nurses for 40 hours a lot of the time. However, this means the registered nurse can go fill that time up working for other facilities. This means they would still get as many hours as they want and at a higher rate than they would if they were stuck working as a salaried nurse at 1 facility.

That also brings us to the second advantage which is flexibility. Contract nurses only have to work for the time they are under contract. As soon as the contract is done, they can do whatever they want. This gives them the ability to plan things like vacations, mental health days, mental health weeks, hell even mental health months if they really want to. Seriously

though, it makes it so nurses can plan their life instead of dealing with the day to day chaos of working at a facility without any real power over their money or time.

So how are contract nurses doing this?

First, they become a business. Technically a registered nurse can be a contractor under their own name. However, this makes them a sole proprietor which leaves them personally liable both for their services and for all of the hefty taxes that sole proprietors must pay. What most

registered nurses do is create a Professional Corporation. In California the profession of nursing is governed under the California Business and Professions Code. This means if someone is going to start a nursing corporation, they are subject to those laws. That is why it is essential to

contact a business attorney, prior to creating the Professional Corporation. You also want to work with an attorney who has experience creating these types of corporations as there are different rules set aside for Professional Nursing Corporations themselves.

After their Professional Corporation is filed and ready to operate, what most nurses do is elect to get taxed as an S-Corp. This allows them the financial flexibility of passthrough taxation instead of having to pay on income both at the corporate level and the individual level. With an S-Corp they are only getting taxed once! It’s a strategic way to save money on taxes.

Here are 5 reasons why all Registered nurses should consider becoming professional corporations and getting taxed as S-corps:

1. Tax Efficiency and Savings:

One of the S-Corp advantages is the potential for significant tax benefits. S-Corps enjoy pass-through taxation, meaning the business income flows directly to the shareholders' personal tax returns. For California nurses, this translates into the opportunity to deduct a range of legitimate business expenses. By maximizing deductions, nurses can potentially lower their

taxable income, leading to substantial tax savings.

2. Strategic Expense Deductions

S-Corp’s empower California nurses to strategically deduct various business-related expenses. This includes essentials such as equipment, uniforms, travel, and even a portion of home office costs. These deductions can make a tangible impact on the nurse's overall taxable income, allowing them to retain more of their hard-earned money.

3. Flexibility and Autonomy:

Choosing the 1099 S-Corp path means embracing unparalleled professional autonomy. Nurses gain the flexibility to control their schedules, take on assignments that resonate with their expertise, and negotiate terms that align with their unique skills. This sense of control can empower nurses to create a career that suits their personal and financial aspirations.

4. Opportunities for Wealth Creation:

The S-Corp model opens the door to diverse financial opportunities. California nurses can establish retirement plans, invest in growth-oriented ventures, and explore other wealth-building avenues that extend beyond conventional employment benefits. This approach encourages nurses to be proactive in shaping their financial futures.

5. Entrepreneurial Mindset:

Transitioning to a S-Corp cultivates an entrepreneurial mindset among California nurses. This shift encourages them to view themselves as business owners, prompting resourceful thinking and innovative approaches to their nursing practice. Such a mindset fosters self-reliance and fosters a stronger connection to their professional journey. We aren’t going to lie to you. There are some potential negatives of transitioning to an S-Corp as well. Some setbacks include having more administrative responsibility.

S-Corp Nurses must document expenses, manage tax filings, and adhere to corporate formalities. Employers, too, have additional responsibilities in overseeing contractor relationships. However, the potential financial gains often outweigh these added tasks.

S-Corp Nurses also have to forgo certain traditional employment benefits and protections. These could include workers' compensation and unemployment insurance. However, a thoughtful approach to financial planning and risk management can mitigate potential downsides.

The S-Corp model can also potentially introduce income variability based on market conditions. Nurses may experience fluctuations in patient demand, which could impact their financial stability. However, with prudent financial management and strategic planning, these fluctuations can be managed effectively.

Ultimately though, California nurses contemplating the transition to the S-Corp model are essentially embarking on a journey of financial empowerment. This choice offers nurses the tools to take control of their financial destinies, leverage tax advantages, and create a personalized approach to their careers. While challenges do exist, they can be navigated through careful planning and collaboration with legal and financial professionals.

The prospect of California nurses being paid through their S-Corps represents a powerful shift towards financial empowerment and autonomy.

By embracing this model, nurses can harness tax efficiency, strategic deductions, and entrepreneurial opportunities. It's essential for nurses to engage in thorough research and consult with experts to make informed decisions that align with their professional goals. Ultimately, the 1099 S-Corp path holds the potential to reshape the landscape of nursing careers, fostering a community of financially empowered and self-driven healthcare professionals.

As mentioned previously the decision to become an S-Corp is one that shouldn’t be taken lightly. We recommend talking to a legal and tax professionals before ultimately taking the first step.

If you have any questions about starting your own Professional Nursing S-Corp please contact us today.