The W2 CRNA's Complete Guide to Moonlighting As A 1099 CRNA

Quite often, I meet W2 CRNAs who are interested in exploring the 1099 world but aren’t quite ready to make the huge leap yet. So they plan on dipping their toes in by picking up one 1099 shift on the side a week/month/quarter, and they often have a few questions.

Here are some of the more common ones:

Let’s start at the very beginning, is all the effort you are about to put into setting up a 1099 practice even worth it? This usually is more a question of the rate. The common rule is to take your W2 pay package and figure out how much you are getting paid per hour essentially. Then you take that hourly rate and multiply it by 1.3. If your 1099 rate is not up to that then it is rarely worth the hassle and you might be better off just picking up extra/overtime W2 shifts.

We’ve created a calculator to help you truly decipher what your minimum 1099 Rate needs to be in other to break even with your W2 pay package. Use the calculator here.

However, the benefits of a 1099 gig are more than just the higher hourly rates. The biggest payoff, and the reason most 1099 CRNAs scarcely return to W2 work, is the tax benefits. Being a 1099 CRNA means you are effectively running your own business. Hence, a world of tax benefits that were previously inaccessible to you as a W2 CRNA are suddenly possible. Your CME travel, scrubs, stethoscope, malpractice tail coverage, cell phone bill, mileage to and from the facility, even a portion of your home office if you're handling the administrative side from home (We’ll have a future article that breaks down all the tax benefits you can tap into as a 1099 CRNA. Keep up with it here).

On the other hand, there are retirement benefits that being a 1099 CRNA opens you up to. A W2 CRNA is capped by whatever their employer's 401k allows, typically $23,500 for 2025. As a 1099 contractor, you can open a Solo 401k and contribute as both "employee" and "employer," pushing your total allowable contribution up to $70,000 for 2025. Even if you're only picking up one shift a week, that extra shelter can meaningfully lower your effective tax rate, and it compounds over time in a way that a slightly higher W2 hourly rate never will.

How do I set this up for the retirement benefits? We’ll also have a future article breaking down the process for you. Keep up with that article here in our “Is being a 1099 CRRNA actually worth it” series

In essence, yes, one shift every now and then may not buy you a boat in direct income but it may be able to buy you a boat in tax savings.

Getting started is a lot less complicated than you might initially think. The truth is that you can genuinely just accept the shift and just show up to work the next day and get given a check at the end of your shift (like they do in a lot of physician’s offices requiring anesthesia services). However, approaching it this way gives your future self a lot of headaches. You might not want to go about setting up an LLC or hiring a CPA just yet but there are certain things that need to be done to make life easier for yourself.

The facility or staffing agency will send you a W-9 to fill out. This is what they'll use to send you a 1099-NEC at the end of the year, so make sure the name and Tax ID number you provide match how you intend to file. If you've already set up an LLC (more on that in the next section), this is where you decide whether you're contracting as yourself or as your business entity. If you do not have a LLC, just put your name on there and your social security number.

Know your rate, your call/overtime terms, who's covering supplies versus what you're expected to bring, and critically, whether malpractice coverage is provided by the facility or if you're expected to carry your own. Know what sort of anesthesia is expected from the facility: are these all MAC cases, or do they claim MAC but really want a general ala TIVA? Do they have emergency drugs? Emergency airway equipment or do you need to invest in your own McGrath? What sort of patients do they operate on? Are they trying to push the boundaries of what is safe in an outpatient setting with greater than 45 BMI patients?

That means, at minimum, a separate bank account for your 1099 income (we'll cover why in the banking section) and a simple system for tracking expenses as they happen. You don’t want tax season to arrive and you are looking for invoices and receipts or trying to decipher what is personal versus business in your personal bank account. A spreadsheet or an app like QuickBooks Self-Employed is enough at this scale. If you don’t want to pay monthly fees for Quickbooks and you also don’t feel savvy enough to create a basic spreadsheet that works for you, then we have a bookkeeping spreadsheet for 1099 CRNAs that may make life easier for you. You download it once and you can keep using it year on year, especially when you are 100% 1099 in practice. Download the spreadsheet here.

Nobody is withholding on your behalf anymore, so a common rule of thumb is to sock away 25-30% of every 1099 payment into a separate savings account the moment it hits your bank. This alone prevents the single most common 1099 CRNA mistake: getting hit with a surprise tax bill because they treated their 1099 pay like a W2 paycheck. Look up the quarterly tax payment schedules and send that 30% payment on time and on schedule. You can send them in yourself utilizing the IRS website. Click here to send quarterly payments. On the site, you send quarterly payments under “Personal payments” even if you are an LLC.

You don’t need to pay anyone to help you do this. If you are socking the money away ahead of time, consider keeping it in a HYSA like Ally so that that money is at least bearing you interest in the meanwhile.

Even one shift a month generates enough complexity (quarterly estimated taxes, deduction tracking, potential entity structuring) that a lot of CRNAs find it worth a consultation with a CPA who specializes in 1099/self-employed physicians and CRNAs, even if they don't retain one full-time yet. However, I must mention that none of this stuff is impossible to do on your own. Most 1099 CRNAs save money by doing a one time paid consultation with a CPA once a year or once at the beginning of their journey. They then proceed to keep their books on their own and submit the bookkeeping spreadsheets alongside their 1099s to their accountant at the end of the year. The cost for this sort of service is usually between $1,500 and $2,500 per year for the taxes only. As opposed to having the CPA do your bookkeeping and payroll monthly and charge you about $500/month.

None of this needs to happen all at once, and you don't need every piece perfected before you take your first shift. But get the W-9 and contract terms locked down before day one, and get the bank account and tax savings habit going within your first pay cycle. Everything else can be refined as you go.

The short answer is ‘no’, no one really needs an LLC, and you definitely do not at this stage. However, the longer answer, is that it depends on where your 1099 journey is taking you.

You can absolutely work as a 1099 contractor as a sole proprietor, meaning legally, you and your business are the same entity. There's no formation paperwork, no state filing fees, and no separate tax return. You just fill out the W-9 with your own name and Social Security number, and the income flows straight onto your personal tax return via Schedule C. For someone testing the waters with one shift a month, this is often the right starting point. It's the path of least resistance, and it costs you nothing to try.

Two reasons, usually. The first is liability protection, though this one gets overstated. An LLC creates a legal separation between your personal assets (your house, your savings, your car) and your business activities, so if your business gets sued for something unrelated to patient care (a contract dispute, for instance) your personal assets have a layer of protection. However, the actual truth is that an LLC does not protect you from malpractice claims. You're still personally liable for your own clinical negligence no matter how your business is structured, which is exactly why malpractice insurance, not entity structure, is your real protection there (more on that later).

The second, more common reason, is taxes, specifically, the S-Corp election. Once your 1099 income grows to a meaningful level (many advisors use a rough benchmark of $40,000-$60,000+ in net 1099 income per year), electing to have your LLC taxed as an S-Corp can save you real money on self-employment tax. Instead of paying Medicare and Social Security tax on 100% of your profit, you pay yourself a "reasonable salary" as an employee of your own S-Corp and only pay those payroll taxes on that salary portion, with the remaining profit distributed to you without the same tax hit.

For someone picking up one shift a quarter, this math almost never pencils out, the administrative cost and complexity of an S-Corp (payroll processing, additional tax filings, stricter bookkeeping) usually outweighs the savings. But for someone building toward regular 1099 work, it's worth knowing the threshold exists so you're not leaving money on the table later.

The practical takeaway: if you're dipping a toe in with occasional shifts, start as a sole proprietor and don't overthink it. Revisit the LLC/S-Corp question once your 1099 income becomes a real, recurring part of your practice rather than an occasional side gig. It's a lot easier to form an LLC later than to unwind one you didn't need. However, if you do end up forming an LLC and/or an S-Corp later on but still work at the same facilities as you started off, then remember to change your W9 form with those employers.

This is the section most folks find the scariest but in reality we have already covered most of the core tax facts above. We’ve covered the generally acceptable set aside amount and how to pay those taxes as well as when. But let’s dive in a little bit deeper.

The core shift to understand is that as a W2 employee your employer withholds federal income tax, Social Security, and Medicare from every paycheck automatically. But, as a 1099 contractor, none of that happens. You get paid the full amount, gross, with nothing taken out, and it's entirely on you to set aside and pay those taxes yourself.

There are two layers of tax you're now responsible for. The first is ordinary federal (and state, if applicable) income tax on your net 1099 profit, same as always, just not withheld for you. The second is self-employment tax, which is the 1099 version of Social Security and Medicare. As a W2 employee, you pay 7.65% and your employer matches it. As a 1099 contractor, you're both the employee and the employer, so you pay both halves, 15.3% total, on your net self-employment income. This is the piece that catches people most off guard, because it applies on top of income tax, not instead of it.

The IRS also expects you to pay as you go, not just settle up once a year. Because nothing is withheld, you're generally required to make quarterly estimated tax payments (due in April, June, September, and January) covering both income tax and self-employment tax. Underpay these by enough and you can owe a penalty on top of the tax itself, even if you pay everything in full by April 15. For someone picking up occasional shifts, the amounts may be small enough that this feels like overkill, but it's worth calculating even a rough quarterly estimate so you're not blindsided.

The good news is that your net self-employment income (what you actually owe tax on) is your 1099 revenue minus your business deductions. Every legitimate business expense we touched on earlier, mileage, scrubs, CME, malpractice tail, a portion of your phone and home office, directly reduces the income that both income tax and self-employment tax get calculated on. This is why the earlier point about tax infrastructure matters so much: a CRNA who tracks and claims their deductions properly can end up with a meaningfully lower effective tax rate than the sticker-shock 15.3%-plus-income-tax math suggests.

Practically speaking, here's what actually matters if you're just getting started: set aside 25-30% of every 1099 payment the moment you receive it (we mentioned this in the getting started section, and it bears repeating because it's the single habit that prevents a bad April), track your deductible expenses as they happen rather than reconstructing them later, and don't ignore the quarterly estimated payments just because the shifts are occasional. None of this requires a CPA to get right at a small scale.

Ok, like the previous section, we have already covered some of this info in previous sections. But let’s consolidate the info and hit some details a bit harader.

Getting paid as a 1099 CRNA looks different depending on who's cutting the check. If you're contracting directly with a facility, you'll typically submit an invoice for your shifts and get paid via direct deposit or check on whatever schedule the contract specifies, weekly, biweekly, or net-30 are all common. If you're working through a staffing agency, they usually handle the invoicing to the facility on your behalf and pay you separately, often on a more predictable schedule. Either way, at year's end, whoever paid you $600 or more is required to send you a 1099-NEC reporting that income to the IRS, which is why the name and Tax ID on your W-9 need to be accurate from day one.

Now, do you need a separate bank account? Technically, no. Legally, nothing requires a sole proprietor to keep business and personal funds apart. Practically, yes, because as mentioned before, you don’t want to spend your time in April (tax season) combing through your bank statements trying to mark out which transaction is business versus personal. A separate account fixes these problems because it becomes a running record of your 1099 business activity, and it creates a physical barrier between "spendable" money and money that's already spoken for.

A simple setup that works well even at small scale: one account for incoming 1099 payments and business expenses, and a second, separate savings account where you immediately transfer that 25-30% tax set-aside the moment a payment clears (I recommend a HYSA for this). Some CRNAs take it a step further with a third account for the S-Corp/LLC layer once they're at that stage, but for someone just getting started, two accounts is plenty. Most banks and credit unions let you open a free business checking account even as a sole proprietor with no LLC, so there's no real barrier to doing this on day one, before your first paycheck even arrives.

As mentioned above, at this stage, this is not a necessity. You might want to contact a CPA to get a sense of tax strategies to utilize that would help you make the most of your new 1099 status and income. This would be a one time payment. For the rest of the stuff you can use a bookkeeping software or a bookkeeping spreadsheet like The 1099 CRNA Ledger.

For someone picking up an occasional 1099 shift, a CPA is optional in the sense that the tax situation is genuinely manageable without one. Software like TurboTax or FreeTaxUSA handles Schedule C and self-employment tax calculations without much trouble, and if you've been tracking expenses and setting aside your 25-30% along the way, filing at year's end is mostly just data entry. Plenty of CRNAs in the one-shift-a-month category file their own taxes for years without issue.

That said, there are a few moments where bringing in a CPA, even just for a single consultation rather than a full-year retainer, tends to pay for itself. The first, as stated already, is right at the start, when you're not yet sure what counts as deductible or how aggressive you can reasonably be with things like home office or mileage. A CPA who specializes in self-employed medical professionals can walk you through what's legitimate and what's a red flag, which protects you from both overpaying and from an audit risk you didn't know you were taking. The second is when your 1099 income starts approaching that S-Corp threshold we mentioned earlier; a CPA can run the actual numbers for your situation rather than you guessing at a rule of thumb. The third is simply if your financial life is already complicated, multiple income streams, a working spouse with their own complexities, real estate, and you'd rather not be the one untangling how 1099 income interacts with all of it.

Where a CPA earns their fee most clearly, though, is less about tax prep and more about strategy. Anyone can plug numbers into software after the fact. A good CPA helps you make decisions in real time, how to structure a retirement contribution, whether to prepay an expense before year-end, how to handle a particularly large one-off payment, that actually change what you owe rather than just reporting what already happened.

The practical middle ground that works well for a lot of occasional 1099 CRNAs: file your own taxes using software in year one, but book a single paid consultation with a CPA who works with self-employed medical professionals before you do. An hour or two of their time to sanity-check your setup, your deductions, and your estimated payments is inexpensive relative to the mistakes it can help you avoid, and it gives you the option to keep doing it yourself or hand it off entirely once you see what's involved. Plus that consultation in itself is a tax deductible expense.

Unlike the LLC question or the CPA question, where you have some room to ease in, malpractice coverage needs to be sorted out before you work a single 1099 shift, not after.

The first thing to understand is that your W2 employer's malpractice policy does not follow you. It covers you for the clinical work you do as their employee, at their facility, under their arrangement. The moment you step into a 1099 role, even for one shift, you are a separate contractor and that policy has nothing to do with you anymore. You need coverage that applies specifically to that 1099 work, and it's on you to confirm it exists before you start, not to assume it's handled.

So who provides it? It varies, and this is exactly the kind of detail we flagged back in the "Getting Started" section as something to nail down in writing before day one. Some facilities or staffing agencies will cover you under their own malpractice policy for the duration of your contract, essentially treating you like a covered provider for that engagement. Others expect you to carry your own individual policy and will ask for proof of coverage before you're credentialed to work. Never assume which one applies; ask directly, get it in writing, and don't work the shift until you know the answer.

If you do need your own policy, there are two types worth understanding: claims-made and occurrence. A claims-made policy only covers you if the claim is filed while the policy is active, which means if you switch insurers or stop working 1099 shifts, you may need "tail coverage" to protect against a claim that surfaces after your policy ends but relates to care you provided while it was active. An occurrence policy covers any incident that happened while the policy was in force, regardless of when the claim is actually filed, so there's no tail coverage gap to worry about. Occurrence policies are simpler in that sense but often cost more upfront; claims-made is cheaper initially but you need to account for the tail cost down the road, especially if your 1099 work is sporadic and you might have gaps in coverage. More info on the nitty gritty of malpractice insurance here.

For someone doing one shift a month or quarter, the cost of an individual policy can feel disproportionate to the income, which is exactly why so many occasional 1099 CRNAs prioritize facilities or agencies that provide coverage as part of the arrangement, at least until their 1099 volume justifies carrying their own policy. But "the facility probably covers it" is not a plan. Confirming it explicitly, and getting documentation of it, is the one piece of due diligence in this entire list that isn't optional or something you can retrofit after the fact.

Hopefully, after all this you feel a lot more prepared to start your first 1099 CRNA Shift. If there’s anything we haven’t covered in this post that you have questions about, please leave a question in the comments and we will try to answer to the best of our knowledge