CRNA 1099 Guide: How to Manage Taxes, Expenses, and Retirement as an Independent Contractor

As a Certified Registered Nurse Anesthetist (CRNA) working as a 1099 independent contractor, you have the potential to earn significantly more than a W-2 employee. However, with this increased income comes additional financial responsibilities, including self-employment taxes, business expenses, and retirement planning.

Unlike W-2 employees who have taxes automatically withheld from their paychecks, 1099 CRNAs must handle their own tax payments, track deductions, and plan for the future. Without a proper strategy, you could be overpaying the IRS and missing out on crucial tax savings.

In this guide, we’ll walk through everything you need to know about managing your taxes, expenses, and retirement savings as a 1099 CRNA, so you can keep more of your hard-earned money and set yourself up for long-term financial success.

1. Understanding Taxes as a 1099 CRNA

One of the biggest differences between a 1099 CRNA and a W-2 employee is how taxes are handled. As an independent contractor, you are considered self-employed, meaning you are responsible for:

A. Paying Self-Employment Taxes

As a 1099 CRNA, you must pay self-employment tax (15.3%), which includes:
✔ 12.4% Social Security tax
✔ 2.9% Medicare tax

This tax applies to your net earnings (income after deductions), so reducing taxable income through deductions is essential.

B. Making Quarterly Estimated Tax Payments

Since taxes are not withheld from your earnings, you must make estimated tax payments to the IRS four times a year (April 15, June 15, September 15, and January 15).

💡 Pro Tip: Work with a CPA to calculate your estimated taxes properly and avoid penalties for underpayment.

2. Maximizing Tax Deductions for CRNAs

Tax deductions lower your taxable income, reducing the amount of taxes owed. Common deductions for CRNAs include:

✔ Work-Related Travel: Flights, rental cars, hotels, mileage (65.5 cents per mile in 2023).
✔ Licensing & Certification Fees: NCCAA recertification, DEA registration, malpractice insurance.
✔ Continuing Education: CEU courses, conferences, professional journal subscriptions.
✔ Medical Equipment & Work Attire: Stethoscope, scrubs, lab coats, shoes.
✔ Home Office Deduction: A portion of your rent/mortgage, utilities, and internet if you work from home.
✔ Legal & Accounting Fees: If you hire a CPA or tax consultant, their fees are deductible.

💡 Pro Tip: Keep detailed records and receipts to justify deductions and avoid IRS audits.

3. Reducing Self-Employment Taxes with an S-Corp

If you’re making over $100,000 per year, forming an S-Corporation (S-Corp) can help you legally reduce self-employment taxes.

How an S-Corp Saves You Money

• As a sole proprietor, you pay 15.3% self-employment tax on your entire income.

• With an S-Corp, you pay yourself a salary (subject to self-employment tax) and take the rest as distributions (not subject to self-employment tax).

Example: Tax Savings for a 1099 CRNA Earning $250,000

CRNA IncomeSole Proprietor (1099)S-Corp (Salary: $120K, Distributions: $130K)Tax Savings$250,000Pays 15.3% on full $250K ($38,250)Pays 15.3% only on $120K salary ($18,360)$19,890 saved

💡 Pro Tip: A CRNA-focused CPA can help you set up an S-Corp properly and ensure compliance with IRS regulations.

4. Managing Expenses and Keeping Financial Records

A. Use Accounting Software

Managing income, expenses, and taxes can get overwhelming. Using accounting software makes it easy to track finances and simplify tax season.

✔ QuickBooks Self-Employed – Tracks income, expenses, and mileage.
✔ Expensify – Organizes receipts and manages business expenses.
✔ MileIQ – Automatically tracks mileage for deductions.

💡 Pro Tip: Separate business and personal expenses by opening a business bank account and credit card.

5. Retirement Planning for 1099 CRNAs

Unlike W-2 employees, 1099 CRNAs must manage their own retirement savings. The good news? You have access to tax-advantaged retirement accounts with higher contribution limits than traditional 401(k)s.

Best Retirement Plans for 1099 CRNAs

✔ Solo 401(k) – Contribute up to $66,000 per year (as both employer and employee).
✔ SEP IRA – Contribute up to 25% of net earnings (max limit: $66,000).
✔ Traditional or Roth IRA – Additional savings options for tax-deferred growth.

Example: Tax Savings with a Solo 401(k)

• A 1099 CRNA earning $250,000 who contributes $50,000 to a Solo 401(k) reduces taxable income to $200,000, potentially saving $15,000+ in taxes.

💡 Pro Tip: Maxing out retirement contributions is one of the best tax-saving strategies for high-earning CRNAs.

6. Health Insurance & HSA Contributions

Since 1099 CRNAs don’t receive employer-sponsored health insurance, you can deduct the cost of private health insurance premiums.

✔ Health Insurance Premiums (if you pay for your own coverage).
✔ Health Savings Account (HSA) Contributions (if you have a high-deductible health plan).

💡 Pro Tip: HSA contributions grow tax-free and can be used for future medical expenses.

Final Thoughts: Take Control of Your Finances as a 1099 CRNA

Becoming a 1099 CRNA gives you more earning potential and financial freedom, but it also requires proactive tax planning. By tracking expenses, utilizing deductions, considering an S-Corp, and investing in retirement accounts, you can legally reduce your tax bill and grow your wealth.

At Commission Based Financial Consulting (CBFC), we specialize in helping CRNAs optimize their tax strategy, structure their business efficiently, and maximize deductions. On average, our clients save $18,000 in their first year working with us.

💰 Want to maximize your tax savings? Contact us today for a personalized CRNA tax strategy!