By Jason Watson, CPA

Posted Saturday, September 2, 2023

WCG continuously reviews our services to ensure we are providing the best tax strategy with efficiency. Upon a lot of discussion and reflection, we are recommending that nomadic or traveling CRNAs do not operate as an S Corp. This includes any professional that provides direct services to clients or patients. Why?

The fees and hassles of closing payroll accounts and opening new ones, and continuously updating payroll plans, is eating into the S Corp savings to the point where it no longer makes sense. It also creates a bunch of homework for you and for us which can be unnecessarily distracting. A few scenarios-

A. You bounce between two states with regularity. For example, you go from Florida to Maine and back again each year like a snowbird. This remains a valid S Corp situation.

B. You work in Florida for 4 months, and then in Maine for 4 months, and after a beautiful summer/fall, you are not sure. However, you know you won’t stay in Maine. This is where an S Corp likely does not make sense given the cost-benefit ratio. Yes, you will be leaving some money ($1,000 to $1,500) on the table that we’ll need to review and discuss with you.

C. You live and work in a state, and then decide to move somewhere else and grow some roots. This remains a valid S Corp situation although we need to close and open payroll accounts, and adjust your payroll plan accordingly.

For our Scenario B CRNAs above, we are going to create a custom “Traveling CRNA” package that includes tax preparation, crucial tax planning and routine consultation. The only variable would be foreign registration of your entity. As stated elsewhere in our articles, we want to avoid Secretary of State registration unless we absolutely must for two reason- first, the cost of registration can be very expensive. Second, some states, such as California, do not recognize a PLLC and at times require medical personnel to be a professional corporation (PC) which is not tax-efficient.

Revoking an S Corporation election is quite simple and is largely handled within the tax return. Each situation is unique and requires an additional conversation, but we wanted to plant this seed now for a conversation this fall.

WCG is a full service consultation and tax preparation firm, and we look forward to working with you!