How do I set up taxes, retirement, and insurance as a 1099 emergency physician?

Taxes: you are the payroll department now

As a contractor you owe self employment tax on top of income tax: 15.3 percent combined, made of 12.4 percent for Social Security up to the annual wage base and 2.9 percent for Medicare, per the Internal Revenue Service. Nothing is withheld, so the discipline has to be mechanical. Open a separate business account, set a skim rate from your actual bracket picture, and sweep that share out of every payment the day it lands, before the money becomes spending. Federal estimates are due quarterly, and most states take their own. Underpaying brings a penalty plus a miserable April. The physicians who get hurt priced a house off the gross deposits in year one and meet the tax bill in year two.

Price the rate honestly while you are at it. This site compares W2 and 1099 offers on a premium band: the 1099 offer must run 25 to 30 percent above the W2 offer to be the same pay after the payroll tax, the benefits layer, and the unpaid time. On a W2 comparison income of $400,000, that band means a 1099 offer of $500,000 to $520,000, because $400,000 times 1.25 is $500,000 and $400,000 times 1.30 is $520,000. A 1099 offer inside that band is not a raise. It is the same job with the employer layer invoiced to you.

One relief exists and contractors miss it: half of the self employment tax is deductible, and business expenses are real deductions now. Malpractice, licensing, certification fees, continuing education, dues, accounting, and contract legal review all reduce the income the tax is computed on. Keep records as expenses happen, because reconstruction at tax time is where deductions go to die.

Retirement: the solo 401(k), opened early

The contractor anchor account is the solo 401(k), which covers a business owner and a spouse, per the Internal Revenue Service. You contribute in both capacities: elective deferrals of up to $24,500 in 2026 as the employee, plus employer contributions of up to 25 percent of compensation as your own employer, which for the self employed computes to about 20 percent of net self employment earnings, to an overall 2026 limit of $72,000, per IRS Notice 2025-67. Two timing rules matter. The plan and the deferral election belong inside the tax year even when deposits settle later, so open the account in the first quarter of the first contract, not the last week of December. And if you also work a W2 job, the $24,500 deferral limit is shared across both plans.

Layer the rest of the funding order around it: a backdoor Roth IRA of $7,500 for you and for a spouse, and a health savings account if you choose a high deductible health plan, at $4,400 for self only coverage or $8,750 for family coverage in 2026, per IRS Revenue Procedure 2025-19. Whether an entity or an S corporation election pays runs through your state professional practice law before the tax math, because many states require a professional entity for physician practice, and some bar an ordinary limited liability company from rendering medical services at all.

Insurance: replace the whole employer layer

Everything an employer used to attach, you now buy yourself, and the disability policy goes first. Emergency medicine income depends on a body doing physical, procedural work. Group coverage through a staffing arrangement is capped, non portable, and written to the plan definition, so the individual own occupation policy, sized toward the 60 to 70 percent of pre disability income carriers will issue, per Medical Economics, is a first month purchase. Term life follows for any household with dependents: sized to the family, owned by you, immune to contract changes.

Health coverage is the third piece, bought on the marketplace or through a spouse employer plan, and priced into the rate comparison. A contractor rate must clear the full cost of this stack plus the payroll tax difference before it exceeds an employed offer by a dollar. The reserve completes the setup, at the top of the range: up to twelve months of expenses, because a contractor schedule can vanish with one contract decision.