Tax Tips for Locum Tenens Physicians: What to Track and Save

Make next tax season less taxing with these smart habits.

Working as a locum tenens physician gives you the freedom to choose when and where you work, but with that independence comes the responsibility of managing your taxes. Unlike traditional employees, most locum physicians are classified as independent contractors, meaning taxes are not withheld from their paychecks. That makes it critical to stay organized throughout the year.

Here’s what to track and save to make filing easier—and possibly reduce your tax liability.

1. Track Your Income from All Assignments

Multiple assignments in multiple places? Your income can start to blur together. Keep a running log or spreadsheet so nothing slips through the cracks.

• Date and location of each assignment

• Gross pay and payment date

• Any Form 1099s you receive at the end of the year

Pro tip: Cross-check your bank deposits against your assignment log to ensure everything matches.

2. Save Receipts for Travel and Lodging

As an independent contractor, travel expenses are often deductible if they’re necessary for work, including:

• Flights, rental cars, tolls, parking

• Hotels or other temporary housing

• Meals (subject to IRS rules—typically 50% deductible)

Make sure to keep itemized receipts or use an expense-tracking app to log everything in real-time.

3. Deduct Work-Related Expenses

Beyond travel, many day-to-day costs associated with working locum tenens assignments may be deductible. Common examples include:

• Medical license and renewal fees

• CME courses, certifications, and conferences

• Scrubs, stethoscopes, and other supplies

• Business use of your phone or internet

• Malpractice insurance, if not provided (although FreeUpMD has you covered with A+ rated protection).
  

Important: To claim these deductions, you’ll need proof, so keep digital or paper receipts and detailed records.

4. Track Mileage If You Drive

If you drive your personal vehicle to assignments or between work sites, you may be able to deduct your mileage. Use an app like MileIQ or simply keep a mileage log with:

• Date and purpose of trip

• Starting point and destination

• Miles driven

For 2025, the IRS standard mileage rate applies. As of this writing, the rate for business and self-employed travel is 70 cents per mile. Be sure to check the latest rate before filing. 

5. Plan for Quarterly Estimated Taxes

Since taxes aren’t automatically withheld, you’re typically required to pay estimated taxes four times a year (April, June, September, and January). Failing to pay on time may result in penalties.

To avoid surprises, work with a tax advisor early in the year to calculate how much to set aside each month. It’s usually 25–30% of your income.

6. Consider a Retirement Plan

One benefit of being self-employed? You may be eligible for retirement savings options that offer tax advantages. You might explore:

• SEP IRA

• One Participant or Solo 401(k)

• Traditional IRA

Contributions may be tax-deductible and can potentially reduce your overall taxable income.

7. Get Help from a Tax Professional

Taxes can be more complex than you think for locum tenens physicians, especially if you work in multiple states or earn a high income. A tax advisor who understands 1099 income and self-employment rules can help you:

• Maximize deductions

• Avoid penalties

• File accurately across states
  

It’s worth the investment for peace of mind and potentially a better return.

Final Thought: The key to making tax time easier? Stay organized year-round. Track your income, save receipts, and don’t wait until April to sort through it all. With some planning, you can enjoy the benefits of locum tenens work without the stress of tax time. .

Want more tips or help finding your next assignment? FreeUpMD.com is an excellent resource for exploring flexible locum tenens opportunities designed for physicians like you. To learn more, call (321) 586-2139 or send an email: recruitment@freeupmd.com 

This article is for informational purposes only and should not be considered tax or legal advice. FreeUpMD is not a tax professional. We recommend consulting a qualified tax advisor for guidance based on your individual circumstances.