Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Another Independent Contractor question
Old 01-27-2016, 02:16 PM   #1
Dryer sheet aficionado
Join Date: Jun 2011
Location: The mountain west
Posts: 35
Another Independent Contractor question

Sorry if this has been addressed before; I did a search though old threads but could't find my exact situation. I retired December 2014 and have truly enjoyed my first year of retirement (well, except for watching my portfolio struggle). About 2 weeks ago an opportunity presented itself through a former work colleague. The job is only 3 24-hour shifts a month, working as a forensic nurse examiner. The pay is a flat rate and only paid if a case comes in, otherwise it's $1.00 an hour to wait for a call. The pay is for the forensic exam, whether the exam takes an hour or 5 hours, with the pay coming from the state victims fund. All the nurses who work for this non-profit organization are IC's, and required to maintain licenses, certifications, and professional affiliations. The offer states the non-profit will pay the first year of malpractice insurance and certification.

I have always been a W2 employee and have zero knowledge about working as an IC, though I've read several threads on this forum that have been extremely helpful. I am aware there are several work related deductions allowed (car or mileage, scrubs, cell phone, conferences), but was unsure of healthcare premiums. DH and I have ACA insurance with a very small subsidy. Because we receive a subsidy, does that negate qualifying for healthcare tax deductions allowed for an IC? Honestly, I've spent hours trying to find some information, but have come up empty handed.

I don't expect to make a whole lot of money only working 3 days a month, though realize even a small amount of income could jeopardize our small subsidy.

Any advice would be appreciated - thanks!!
WestcoastRN is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-27-2016, 03:02 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,314
I think you can deduct your health insurance, but only to the extent that you have a profit. So I think the impact of that limitation will simply mean that your part-time income will not be subject to tax (assuming that your ACA premiums will exceed your part-time income less other direct costs).

You may want to be careful though and see if your malpractice insurance (beyond the first year) will kill your income or make it not worth doing.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-27-2016, 03:17 PM   #3
Dryer sheet aficionado
Join Date: Jun 2011
Location: The mountain west
Posts: 35
Thank you, PB4uski. Our healthcare premiums, being our largest monthly bill, are the main reason I'm considering this part time endeavor. I thought if there was a way to write off some of the cost, 3 days a month would be worth it. I had not factored in the malpractice costs, so thank you for bringing that up.
If you want to go fast, go alone
If you want to go far, go together
~African proverb
WestcoastRN is offline   Reply With Quote
Old 01-27-2016, 03:28 PM   #4
Thinks s/he gets paid by the post
Senator's Avatar
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
With the extra income, your ACA subsidy may be eliminated. If you have an S-Corp, I believe you can deduct your health care premiums.

Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are deductible by the S corporation and reportable as wages on the shareholder-employee’s Form W-2, subject to income tax withholding.

However, these additional wages are not subject to Social Security, or Medicare (FICA), or Unemployment (FUTA) taxes if the payments of premiums are made to or on behalf of an employee under a plan or system that makes provision for all or a class of employees (or employees and their dependents). Therefore, the additional compensation is included in the shareholder-employee’s Box 1 (Wages) of Form W-2, Wage and Tax Statement, but is not included in Boxes 3 and 5 of Form W-2.

A 2-percent shareholder-employee is eligible for an above-the-line deduction in arriving at Adjusted Gross Income (AGI) for amounts paid during the year for medical care premiums if the medical care coverage was established by the S corporation and the shareholder met the other self-employed medical insurance deduction requirements. If, however, the shareholder or the shareholder’s spouse was eligible to participate in any subsidized health care plan, then the shareholder is not entitled to the above-the-line deduction. IRC 162(l).
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 01-27-2016, 05:27 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
Join Date: Dec 2008
Location: Stuck in the mud somewhere in the NJ swamp
Posts: 7,409
My first feeling is negative. You mentioned small HC subsidy, so I assume there is a current paycheck for DH. If so, this small amount will become smaller due to taxes on the profit you must pay.

In the second year you will become less profitable sind the company will not pay certification and insurance.

A wild card is the distance to the assignment. The travel costs are yours?

Use your tax program to measure the impact of this SE income on last year's taxes.
target2019 is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Independent Contractor Roth IRA? Mo Money FIRE and Money 7 01-30-2016 11:41 PM
ACA for independent child question. Mulligan Health and Early Retirement 12 09-17-2015 07:41 AM
Independent Contractor and Taxes LinCella Life after FIRE 17 08-15-2015 04:51 PM
Retirement/Tax Benefits of Independent Contractor inquisitive FIRE and Money 20 10-08-2014 06:32 AM
what is being an independent contractor like ER_Hopeful Young Dreamers 17 02-27-2011 05:01 PM

» Quick Links

All times are GMT -6. The time now is 02:51 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.