CPA for dentists and 1099 dental hygienists

Whether a hygienist is an employee or an independent contractor depends on the facts. The IRS weighs three categories:

• Behavioral control. Does the office control what you do and how you do it?
• Financial control. Who sets your pay, covers expenses and supplies the equipment?
• Type of relationship. Is there a contract, benefits, or an ongoing expectation of work?

If you are unsure, you or the office can file Form SS-8 to ask the IRS for a determination. Practice owners who hire hygienists should apply the same test before issuing a 1099.

Quarterly estimates. With no withholding, you pay income tax and self-employment tax through Form 1040-ES. Self-employment tax is 15.3%: 12.4% for Social Security and 2.9% for Medicare. See quarterly tax planning.

Deductions. Business expenses must be ordinary and necessary. Common ones for independent hygienists:

• License and registration fees.
• Continuing education that maintains or improves your skills.
• Liability and malpractice insurance.
• Scrubs, loupes and supplies used only for work.
• Travel from one office to another on the same day. Commuting from home to a regular office is not deductible.

W-2 hygienists generally cannot deduct unreimbursed job expenses on their federal return. If you work both W-2 and 1099 shifts, only the 1099 side carries business deductions.

Many hygienists file extensions while they sort out 1099s from several offices. See extension filers.

S corporation and reasonable compensation. An S corporation owner who works in the practice must take reasonable W-2 compensation before taking distributions. IRS factors include training and experience, duties, time devoted to the practice and what comparable practices pay. See S corp reasonable compensation and LLC vs S corp.

Retirement plans. A SEP is funded only by the employer, and the practice must contribute the same percentage for every eligible employee. A one-participant 401(k) is for an owner with no employees other than a spouse, so it fits an independent hygienist or solo practitioner, not a practice with staff.

Books and payroll. Clean monthly books make quarterly estimates and year-end planning straightforward. See medical and dental practice accounting.

Best for: dental practice owners and associates, and hygienists paid on 1099, W-2 or both, including those who work through staffing apps.

1. Free initial consultation. Tell us how you are paid and what you need help with.
2. Fees quoted upfront, in writing. Transparent, fair fees before any work starts.
3. Review. We review last year’s return, your 1099s and W-2s, and your books if you own a practice.
4. Plan. Quarterly estimates, deductions to track, and entity and salary recommendations for owners.
5. File. We prepare and file the returns and set up next year’s estimates.