Locum Tenens Tax Deductions: What 1099 Clinicians Can Write Off

As a 1099 independent contractor, you report your locum income on Schedule C and may deduct any expense that is ordinary and necessary to your practice (Internal Revenue Code §162). For locum physicians, CRNAs, and AAs, the core deductible categories are:

- Business travel away from your tax home on temporary assignments — airfare, rental car, lodging, and baggage are 100% deductible; meals are 50% deductible (Pub 463; §274(n)). - Vehicle use — either the standard mileage rate (72.5¢/mile for 2026) or actual costs. - Professional expenses — CME, state licensing, DEA registration, board certification and recertification, specialty society dues, and credentialing fees. - Malpractice insurance, including tail (extended reporting period) coverage when paid. - Self-employed health insurance premiums (medical, dental, vision, long-term care), deducted on Form 7206 and flowing to Schedule 1. - Home office (simplified method: $5/sq ft up to 300 sq ft = $1,500 max). - Equipment — loupes, a stethoscope, a laptop, ultrasound — via §179 expensing or depreciation (Form 4562).

What you generally cannot deduct: commuting from home to a regular workplace, personal trips home to see family during an assignment, scrubs or clothing suitable for everyday wear, and — for most full-time locums — the QBI deduction (see below). The deductions hinge on documentation and on the tax-home rule, both covered in their own sections.

Your tax home is your regular place of business or post of duty — regardless of where your family home is (Pub 463). Travel, lodging, and meals are deductible only when you travel *away from your tax home* on a temporary assignment.

The distinction that controls everything:

- Temporary = an assignment realistically expected to last (and that does in fact last) one year or less. Travel away from home is deductible. - Indefinite = expected to last more than one year. The assignment location *becomes your new tax home*, and travel, lodging, and meals are not deductible.

This is the one-year trap: a long locum contract at a single site, or back-to-back renewals at the same facility that cross the 12-month mark, ends the travel deduction prospectively from the date your expectation changes to more-than-a-year. If you sign on for 14 months at one hospital from day one, the location is your tax home immediately and the travel deduction never starts.

A harder problem: itinerant clinicians with no regular place of business and no fixed residence may have *no* tax home at all — which means *no* away-from-home travel deduction anywhere. One way to strengthen your tax-home anchor is to maintain a genuine principal place of business at home (a home office used as your administrative base), so that assignments elsewhere are clearly "away." Because the facts here are individualized and easy to get wrong, this is exactly the point to review with a CPA before a long or renewing assignment.

For most full-time locums, the honest answer is $0. Physicians, CRNAs, and AAs work in the health field, which is a Specified Service Trade or Business (SSTB) under §199A. The QBI deduction for an SSTB phases out entirely above the income thresholds, and for 2026 it fully phases to $0 above $276,750 (single/HoH) / $553,500 (married filing jointly) — figures that are the §199A(e)(2) threshold ($201,750 single / $403,500 MFJ) plus the phase-in range ($75,000 single / $150,000 MFJ) (Rev. Proc. 2025-32). Most full-time locum clinicians earn well above those amounts, so they receive no QBI deduction at all.

A few clarifications:

- §199A was made permanent by the One Big Beautiful Bill Act (OBBBA, 2025), and the phase-in range was widened to $75,000 (single) / $150,000 (MFJ) above the threshold — but "permanent" does not help an SSTB earner above the cap. - Below the threshold ($201,750 single / $403,500 MFJ for 2026), a partial or full deduction may apply — relevant only to part-time or lower-income years. - Do not treat QBI as a locum tax lever. The deductions that actually move the needle for high-earning 1099 clinicians are retirement contributions: a solo 401(k) or SEP-IRA, which let you shelter a large share of net self-employment income (2026 employee deferral limit $24,500; age 50+ catch-up $8,000; ages 60–63 super catch-up $11,250; SEP and the employer side of a solo 401(k) allow far more on top). Note the SECURE 2.0 mandatory-Roth catch-up rule: effective tax year 2026, if your prior-year FICA wages from the plan sponsor exceeded $150,000 (the figure the IRS adjusted from the statutory $145,000 for 2026), age-50+ catch-up contributions must be Roth. That keys off plan-sponsor FICA *wages*, so it mainly affects W-2 or S-corp-wage earners; pure 1099 solo-401(k) savers should know the rule but it turns on wage history.

You need contemporaneous records — created at or near the time of the expense — not year-end reconstructions (Pub 463 substantiation rules). Specifically:

- Mileage: a written log recording the date, miles driven, business purpose, and destination, kept at or near the time of each trip. A year-end estimate or a credit-card statement alone is not adequate. - Lodging: keep an actual receipt for every lodging stay regardless of amount (the self-employed cannot use a lodging per diem), plus a receipt for any other single expense of $75 or more. - Meals: use either actual receipts or the M&IE-only per-diem method ($86/day high-cost; $74/day other CONUS for 10/2025–9/2026 under the high-low method; the $319/$225 combined per diem is for employer plans, not the self-employed), but either way log the time, place, and business purpose — and remember only 50% of the meals amount is deductible. - Why statements are not enough: credit-card and bank statements prove that you *paid*, not that an expense had a *business purpose* — so they are insufficient on their own to support a deduction.

Practical setup: a mileage app, a dedicated business bank account and card, and a folder of digital receipts organized by assignment will satisfy these rules and make Schedule C straightforward. Keep records for at least three years after filing (longer in some situations). A note on sourcing: IRS Publication 535 (Business Expenses) was discontinued after its 2022 revision, so rely on Pub 334 (Tax Guide for Small Business), §162, and the Schedule C instructions for the ordinary-and-necessary standard rather than the obsolete Pub 535.

The tax-home determination is federal, but most other pieces of a locum's tax picture vary by state — so treat the items below as flags to confirm with a CPA for each state you work in:

- Multi-state filing: you generally owe a nonresident return in each state where you physically perform work, plus a resident return in your home state (usually with a credit for taxes paid elsewhere). Locums who work in several states can face several state returns in one year. - No-income-tax states: a handful of states (e.g., Texas, Florida, Tennessee, Washington, Nevada, South Dakota, Wyoming, Alaska, New Hampshire) do not tax wage/earned income, which affects where work and residency are most advantageous. - Entity recognition and entity-level taxes: whether a state recognizes an S-corp election and whether it imposes a franchise, excise, or entity-level tax varies — for example, California and Tennessee impose entity-level taxes that can erode S-corp savings. - PLLC requirement: some states require licensed clinicians to organize as a professional LLC (PLLC) rather than a standard LLC; this is a state-by-state rule. - Non-compete enforceability: there is no federal categorical ban on non-competes — the FTC acceded to vacatur of its proposed rule in September 2025 and now pursues case-by-case enforcement — so whether a locum non-compete is enforceable is governed by the state where you work, and varies widely.

Because these interact with your contracts and residency, the cost of getting them wrong (penalties, double taxation, mis-formed entities) is high. Confirm entity choice and multi-state filing with a CPA, and any formation or non-compete questions with a healthcare attorney licensed in the relevant state.