December Tax Strategies for Locum & 1099 Medical Pros

December Moves Every Locum and 1099 Medical Professional Should Make Before Tax Season

Introduction

Locum physicians and 1099 medical professionals have unique tax opportunities — and risks. December is the ideal time to correct mistakes, optimize deductions, and reduce taxable income before the year closes.

Here are the December strategies every locum should consider.

1. Confirm Your Business Structure Is Still the Right Fit

Many locums start as sole proprietors but should shift to an S-Corp or C-Corp once income grows.

December is the time to determine if:

• you should start payroll next year
• your compensation structure needs updating
• a different entity would reduce taxes
• you’re missing out on retirement contributions

2. Fix Your Health Insurance Setup (Most Locums Get This Wrong)

December is the last chance to correct this year’s mistake.

Correct rules:

• Sole props deduct premiums as SEHI
• S-Corp owners must run premiums through W-2
• Partnerships must classify premiums as Guaranteed Payments
• C-Corp owners get health insurance tax-free

One wrong step = deductions lost.

3. Max Out a Solo 401k

Most locums can shelter tens of thousands in retirement contributions.

Common mistake:

Locums wait until March — but the plan must be created before year-end.

4. Fund an HSA Before December 31

This is the most tax-efficient account available to medical professionals.

5. Prepay CME, Equipment, Licensing & Professional Expenses

If you expect higher income this year, accelerating expenses reduces taxable income immediately.

Examples:

• CME courses
• Medical equipment
• Licensing fees
• Professional insurance
• Scrubs, tools, supplies
• Exam prep, certifications

6. Track Your Travel and Housing Correctly

Locums with multiple assignments need accurate logs for:

• meals
• lodging
• per diem rules
• mileage
• temporary housing

Correct logs = thousands saved.

Conclusion

December is the most powerful month for locums to reduce taxes.

Waiting until April is too late.

MyPensionTree can guide you through every step — from health insurance to retirement optimization.