I’m “Just” a 1099 Contractor at a Practice — Do I Really Need Bookkeeping?
“I’m just a 1099 contractor. I work under another clinic. Once I become an S-Corp, then I’ll worry about bookkeeping.”
I hear this often from chiropractors, therapists, physical therapists, and other healthcare providers who are paid on a 1099 by a larger practice.
But here’s what’s important to understand:
If you receive a 1099-NEC, you already have a business.
Even if you’re working inside someone else’s clinic, you are considered self-employed. And that means you are responsible for tracking income, expenses, and taxes properly. The best time to get organized isn’t when you form an LLC or an S-Corp. It’s now.
Yes — You Are a Business Owner (Even If You Work Inside Another Practice)
If you’re:
A chiropractor paid per adjustment
A therapist paid per session
A physical therapist contracted by a clinic
A provider splitting collections with a supervising practice
And you receive a 1099 — you are operating as a sole proprietor.
That means:
You report your own income and expenses
You pay self-employment taxes
You may need to make quarterly estimated payments
You are responsible for clean financial records
Waiting until you “formalize” your business can create a messy paper trail that’s harder to fix later.
Below are 3 practical steps to get your business finances organized from the start, even if you are “just” a 1099 contractor.
Step 1: Open a Separate Business Bank Account
Even if your income flows from one clinic, you should not deposit it into your personal account.
A separate business checking account:
Keeps personal and business spending separate
Makes it easier to track CEUs, licensing fees, malpractice insurance, uniform purchases, equipment, and any other business expenses.
Simplifies tax preparation
Protects you in the event of an audit
If you want a clean, simple option built for small business owners, you can open an account through Relay.
This is one of the easiest ways to take your independent contractor income seriously.
Step 2: Track Your Expenses Like a Business Owner
Healthcare contractors often have more deductions than they realize.
Examples include:
Continuing education courses
License renewals
Professional memberships
Malpractice insurance
Business mileage
Equipment or treatment supplies
Office rent (if subleasing space)
Without proper tracking, these deductions can easily be missed.
You can always start with a basic spreadsheet. But if you are ready to automate some of the bookkeeping data entry, you can start using software like QuickBooks Online or if you prefer a different interface, Xero is another strong option.
The key isn’t which software you use — it’s consistently reviewing your numbers monthly.
Step 3: When Does an S-Corp Make Sense?
Becoming an S-Corp can reduce self-employment taxes once your net profit reaches a certain level.
But it also means:
You must run payroll (even for yourself)
You file additional tax forms
You maintain stricter compliance
You pay higher accounting and payroll costs
It is not automatically the “next step.”
The right time depends on your:
Net profit
Growth projections
Administrative capacity
Overall tax situation
Before making that election, speak with a tax professional who can evaluate whether the tax savings outweigh the added costs.
If you want a deeper breakdown, I have this other blog post on this topic titled “Should you become an S-Corp”.
Get Organized First. Change Structure Later.
You don’t need to form an S-Corp to operate professionally.
If you’re a 1099 chiropractor, therapist, PT, or other healthcare provider, you already have a business.
Start with:
A separate bank account
Clean monthly bookkeeping
Regular review of your Profit & Loss
When your profit reaches the level where an S-Corp election makes sense, you’ll be ready — without scrambling to clean up past years.
If you’re a private practice owner or healthcare contractor who wants help getting organized the right way, you can book a free consultation by clicking the link below.