EIN & Business Bank Account for Locum Tenens 1099 Income

No — an Employer Identification Number is not legally required for a sole-proprietor locum, but it is strongly recommended. A sole proprietor or single-member LLC must obtain an EIN only if they have employees, must file excise or employment taxes, incorporate, form a partnership, declare bankruptcy, or (for a single-member LLC) elect to be taxed as a corporation or S corporation. Outside those triggers, an EIN is optional, and a disregarded single-member LLC with no employees and no excise-tax liability does not need one (IRS, Single Member Limited Liability Companies).

Why get one anyway? The EIN is free, issued instantly through the IRS online tool, and you can use it the same day to open a bank account (the IRS advises waiting about two weeks before e-filing or making electronic deposits). The IRS limits applicants to one EIN per responsible party per day. The biggest practical reason for physicians, CRNAs, and AAs is privacy: an active 1099 clinician hands a W-9 to every staffing agency and facility, and as a sole proprietor you may put either your SSN or your EIN on the W-9 TIN line — so an EIN keeps your SSN off dozens of agency servers.

Accuracy trap for LLC owners: for a disregarded single-member LLC, the IRS W-9 requester instructions say Line 1 is the owner's name (the LLC's name goes on Line 2) and the TIN is the owner's SSN or the owner's personal EIN — NOT the LLC's EIN. Get the EIN in your own sole-proprietor capacity so it can sit on the W-9 in place of your SSN. A sole proprietor needs only one EIN regardless of how many trade names or locum gigs they run.

No. An EIN is purely an identifier — it produces no tax savings on its own. A single-member LLC is a disregarded entity for federal income tax, meaning it is taxed identically to a sole proprietorship (income flows to Schedule C); forming one does not reduce your tax. The LLC's real benefits are liability separation and SSN privacy, not tax. Note that an LLC does NOT shield personal malpractice liability — clinical negligence is yours regardless of entity, which is what professional liability (malpractice) insurance and, in many states, a PLLC or PC structure address. PLLC/PC requirements vary by state.

Tax savings, where they exist, come from electing S-corporation taxation (recognition and franchise-tax treatment vary by state), not from the LLC or EIN. Do not assume the §199A/QBI deduction will lower your set-aside, either: under Rev. Proc. 2025-32 (OBBBA widened the phase-in to $75k/$150k), the QBI threshold is $201,750 single / $403,500 MFJ and the SSTB deduction fully phases out above $276,750 single / $553,500 MFJ for the 2026 tax year. Physicians, CRNAs, and AAs are a specified service trade or business (SSTB), so above that phase-out the QBI deduction is $0 — which is where most full-time locums land. (Use the 2026 figures, not the stale pre-OBBBA $276,750 / $553,500 numbers.)

Not legally — a sole proprietor may use a personal account — but a dedicated business checking account is strongly advised and is essential if you operate through an LLC, PLLC, or PC. Commingling personal and business funds is consistently one of the most common triggers for a court to pierce the corporate veil and disregard the entity to reach your personal assets (Nolo; EPGD Business Law; LLC Attorney). A single-member LLC is disregarded for federal income tax yet remains separate for liability, and a dedicated account, separate records, and no personal spending from the business account are how you preserve that shield.

There is also a deposit-insurance nuance. A sole-proprietorship (DBA) account is insured by the FDIC as the owner's single-account category — aggregated with the owner's other single accounts at the same bank under the $250,000 limit — so opening a second business account at the same bank adds no new coverage for a sole proprietor; only an account at a different bank expands coverage (FDIC, Single Accounts; Your Insured Deposits).

Most clinicians pair the operating account with a tax-reserve sub-account. Set aside roughly 25-35% of net 1099 income for federal income tax plus self-employment tax: about 25-28% with no state income tax, ~28-32% in a typical state, and ~32-35% in high-tax states, at high income, or once the Additional Medicare tax applies (Keeper; 1-800Accountant). The set-aside runs high because SE tax is 15.3% — 12.4% Social Security on the first $184,500 of net (the 2026 wage base) plus 2.9% uncapped Medicare, with an extra 0.9% Additional Medicare above $200,000 single / $250,000 MFJ — computed on 92.35% of net profit (one-half of SE tax is deductible above the line) and stacked on top of federal and state income tax (IRS Self-Employment Tax / Schedule SE; SSA 2026 wage base). Sweep the percentage into a high-yield reserve each pay cycle and pay quarterly estimates from it.

No — bank and credit-card statements alone do not satisfy the IRS. The IRS lets you choose any recordkeeping system that clearly shows your income and expenses, backed by a summary of business transactions, but supporting documents must identify the payee, the amount paid, proof of payment, the date incurred, and a description of the item — and a combination of documents may be needed (IRS, What kind of records should I keep; Pub 583). Keep sales slips, invoices, receipts, deposit slips, canceled checks, and your 1099-NECs (the 2026 1099-NEC reporting threshold rises to $2,000 under OBBBA, but you must still report all income even if no 1099 is issued).

Vehicle records are a frequent audit landmine: a mileage log must be contemporaneous — created at the time of the trips, recording date, miles, destination, and business purpose. Logs reconstructed after an audit are disallowed under the §274(d) substantiation rules, and the 2026 standard business mileage rate is 72.5 cents per mile (IRS Notice 2026-10; Pub 463).

Locums also need a per-state income log. Clinicians often file several nonresident state returns, so track work location, dates, and earnings all year; your home state generally credits tax paid to the states where you worked (The Doctor's CPA; SDO CPA). Retain records at least three years, longer in some situations (IRS Pub 583 / Pub 463).

They connect through retirement saving. A solo 401(k) trust is a separate legal entity and typically needs its own EIN — distinct from both your SSN and your business EIN — to open the plan's bank or brokerage account, which is another reason to get comfortable holding more than one EIN (My Solo 401k; IRS One-Participant 401(k) Plans).

For the 2026 tax year, the elective deferral limit is $24,500, with an $8,000 age-50 catch-up and an $11,250 super catch-up for ages 60-63; the §415(c) defined-contribution annual addition is $72,000 (IRS Notice 2025-67). Under SECURE 2.0, catch-up contributions must be made as Roth if your prior-year FICA wages from the plan-sponsoring employer exceeded $150,000 (2026) — a rule that bites high-earning clinicians who run payroll through an S corporation, where contributions are based on W-2 wages. The mechanics of S-corp wages and retirement funding are covered in the related guides below.