Top Tax Strategies for 1099 CRNAs in 2024

Transitioning to a 1099 status as a Certified Registered Nurse Anesthetist (CRNA) offers freedom, higher earning potential, and the opportunity to build wealth on your terms. However, it also comes with unique tax responsibilities that can feel overwhelming without the right strategies in place. To help you navigate the 2024 tax season with confidence, we’ve compiled the top tax strategies every 1099 CRNA should know. By implementing these techniques, you can maximize your income, minimize your tax burden, and set yourself up for long-term financial success.

1. Take Full Advantage of Business Deductions

As a 1099 CRNA, you’re classified as self-employed, meaning you can deduct a wide array of business-related expenses from your taxable income. Here are some of the most common (and lucrative) deductions to keep in mind:

Home Office Deduction

If you use a portion of your home exclusively for work, you may qualify for the home office deduction. This allows you to deduct a percentage of your rent, mortgage interest, utilities, and even internet expenses. In 2024, consider documenting your home office setup and expenses thoroughly to claim this benefit.

Continuing Education and Certifications

Your profession often requires ongoing education and certifications to stay current. Expenses for courses, conferences, and certifications are fully deductible.

Travel Expenses

If you’re a traveling CRNA, you can deduct costs for flights, hotels, meals, and mileage for work-related travel. Keep detailed records of your trips, including dates, destinations, and purposes.

Equipment and Supplies

From scrubs and stethoscopes to laptops and office supplies, any item used for your work can be deducted.

Professional Fees

Dues for professional associations, malpractice insurance premiums, and state licensing fees are all tax-deductible.

2. Maximize Retirement Contributions

One of the biggest advantages of being a 1099 CRNA is the ability to contribute to tax-advantaged retirement accounts, which not only help you save for the future but also reduce your taxable income today.

Solo 401(k)

• In 2024, you can contribute up to $66,000 (or $73,500 if you're over 50), combining employee and employer contributions.

• This is an excellent option for high earners looking to shelter significant income from taxes.

SEP IRA

• Contribute up to 25% of your net earnings, up to a maximum of $66,000 in 2024.

• Simple to set up and ideal for self-employed professionals.

Traditional IRA

• While the contribution limit is lower ($6,500, or $7,500 if you're over 50), traditional IRAs can still provide valuable tax deferral.

By maximizing these contributions, you reduce your taxable income while building long-term wealth.

3. Understand Self-Employment Taxes

Self-employment taxes, which cover Social Security and Medicare, amount to 15.3% of your net earnings. While this can feel like a heavy burden, there are strategies to minimize its impact:

Set Up an S-Corporation

• By forming an S-Corp, you can pay yourself a reasonable salary and take the rest of your income as distributions, which are not subject to self-employment tax.

• Work with a tax professional to ensure compliance and maximize savings.

Deduct Half of Your Self-Employment Tax

• The IRS allows you to deduct 50% of your self-employment tax as an adjustment to income, reducing your taxable income.

4. Stay on Top of Quarterly Tax Payments

As a 1099 CRNA, you’re responsible for paying estimated taxes quarterly. Missing these deadlines can result in penalties and interest. Here's how to stay on track:

• Set Aside Funds Regularly: Aim to save 25–30% of your gross income for taxes.

• Use Tax Software: Tools like QuickBooks or TurboTax can help you calculate and track your quarterly payments.

• Automate Payments: Consider setting up automatic payments to the IRS to avoid missing deadlines.

5. Plan for Health Insurance Costs

If you purchase your own health insurance, you may be eligible for the self-employed health insurance deduction. This allows you to deduct premiums for medical, dental, and long-term care insurance for yourself, your spouse, and your dependents.

Additionally, if you use a Health Savings Account (HSA), you can make tax-deductible contributions (up to $3,850 for individuals and $7,750 for families in 2024) and enjoy tax-free withdrawals for qualified medical expenses.

6. Leverage Professional Tax Advice

Navigating the complexities of 1099 taxes can be daunting. Hiring a tax professional who specializes in working with CRNAs can provide you with tailored strategies to minimize your liability and avoid costly mistakes. They can:

• Help you decide whether to form an LLC or S-Corp.

• Maximize deductions you might otherwise overlook.

• Ensure compliance with IRS regulations.

7. Use Technology to Simplify Tax Management

In 2024, take advantage of technology to streamline your tax management:

• Expense Tracking Apps: Tools like Expensify and QuickBooks Self-Employed make it easy to track and categorize expenses.

• Mileage Tracking: Apps like MileIQ ensure you never miss a deduction for business-related driving.

• Tax Software: Use platforms like TurboTax or H&R Block to simplify filing.

8. Plan for the Long-Term

Tax planning isn’t just about the current year—it’s about building a sustainable financial future. Consider:

• Reinvesting Savings: Use your tax savings to invest in stocks, real estate, or other income-generating assets.

• Reviewing Your Strategy Annually: As your income and financial goals evolve, ensure your tax strategy keeps pace.

• Building an Emergency Fund: Set aside 3–6 months of expenses to handle unexpected challenges without tapping into retirement savings.

Conclusion

Being a 1099 CRNA offers incredible earning potential and financial freedom, but it also requires a proactive approach to tax management. By leveraging deductions, contributing to retirement accounts, and working with a tax professional, you can minimize your liabilities and maximize your wealth in 2024 and beyond.

At CBFC, we specialize in tax strategies for 1099 CRNAs. Whether you need help with quarterly payments, retirement planning, or forming an S-Corp, we’re here to guide you every step of the way.

Ready to take control of your taxes? Schedule a consultation today and start 2024 on the right financial footing.