Are you a PT working as an independent contractor? Are you currently working a side hustle? Or, are you daydreaming about what you could do with that supplemental income? Whatever your unique situation, these four finance tips will help you make the most of that hard-earned independent contractor cash.
Open a Separate Business Account
If you’re dipping your toes in the 1099 waters with a side gig, it’s a good idea to open a business bank account that’s separate from your personal one. This will save you hours of time come tax season—no need to spend hours sorting through personal and business expenses! Be sure to deposit all the money you make as an independent contractor into this account, and use it whenever you are buying anything related to your side gig. Speaking of business expenses...
Keep Track of All Business-Related Expenses
As an independent contractor, you’re responsible for paying taxes on your income (unlike a full-time job where taxes are automatically taken out of your paycheck). Thankfully, you don’t have to pay taxes on every dollar thanks to every independent contractor’s best friend—tax write offs. In order to be eligible, you’ll need to keep detailed records of all business-related expenses. While you could adopt the shoebox method and hold onto all of your physical receipts, that can get messy fast. We recommend leveraging technology to make this process easier, like Expensify, Shoebox, or Smart Receipts.
Adopt the Right Mentality
Many independent contractors make the mistake of taking on everything themselves when they’re first starting out. Remember, just because you’re self-employed doesn’t mean you have to do everything by yourself. In some cases, you can actually provide better service and make more money by doing less and focusing exclusively on your strengths. For example, at Luna, we provide physical therapists with billing, patient marketing, booking support, and more so they can spend their valuable time caring for patients.
Work Backwards to Determine Ideal Income
One of the biggest benefits of working for yourself is that you have control over how much money you can make each month. You can set your own hours and determine your own financial fate. To give yourself some consistency, it can be helpful to determine your ideal annual income and divide by 12 to determine what you’ll need to bring in every month. Go a step further by subtracting your estimated taxes and monthly expenses to paint a true picture of what you’ll need to earn.
Either way, you’ll feel empowered just by the fact that you have control over your financial goals. At Luna, all therapists work as 1099 contractors. And they love it! They have the freedom to decide how much -- or how little --- they work, based on how much they’d like to earn. With Luna as your side gig, you can dictate your own schedule and provide care based on your specific specialties and interests.
If you’re a physical therapist looking for supplemental income, or are ready to ditch your full time job and go out on your own, we’d love to talk to you. Get in touch with the Luna team today to learn how we’re helping physical therapists like you create a life they deserve.