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USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1236
Experience:  US Taxation specialist.
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I am a physician and moonlight at a second hospital. I work

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I am a physician and work at one hospital and moonlight at a second hospital. My primary job gives me a W-2 at the end of the year as I am employed by the hospital. The other hospital (my second job where I moon light) gives me a 1099 at the end of the year and do not with hold any taxes. Currently I have been filing taxes as married filing jointly and declare the income from the second hospital on a schedule C


Would it be better for me to form a LLC?? Would I get more tax deductions if I form a LLC or should I just keep getting the 1099. I can still file a schedule C without forming a LLC and take all the tax deductions. Tax deductions would be things like deducting my lease payments on the car, deducting cell phone, home office, medical conferences etc.


Should the LLC be a disregarded entity or should I file another form with the IRS to make it a corporation.



Team_KTCPA :

If your main purpose to operate via an LLC is for tax benefits then there is no difference than a Schedule C taxpayer. You get the same deductions via a Schedule C as you do via the LLC (substantially the same). Also know that if you are the sole owner of the LLC you must file a Schedule C in lieu of a Form 1065. (This is required by the IRS) You can take all the deductions you mention through the Schedule C as you would through the LLC.

Team_KTCPA :

If you elect corporate status then you are in a totally different realm of taxation. Generally this is not recommended especially if you expect to have "profit" in the corporation. If the corporation is profitable it will pay taxes. When you take money out of the corporation it will generally be in the form of a dividend and will be taxable to you again. This is known as double taxation.

Hopefully I have answered your questions. Please let me know if you have any further questions or require more clarity.

Customer: replied 4 years ago.
Thank you. What do you think is the potential benefit of forming a LLC in this case and would you advise against forming a LLC??

The main benefit for you to form an LLC is the liability protection it offers. I can not provide an opinion as to the best "legal" form of business structure for you, generally that's what a lawyer will analyze and opine on. From a tax standpoint it doesn't matter what entity you choose.


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