Today’s post is dull, but necessary. It’s not going to be a pleasure to read, but it’s information I want you to have. Today we are going to discuss how I set up my business as a contracted nurse practitioner in Georgia. It took me a lot of digging and research to figure this out. So, I hope laying out these steps will save you a significant amount of time and stress! Please keep in mind I am not a professional in legal or tax matters. These were the steps I took and it has worked for me!
If you are trying to make the decision to be a contracted or salaried employee check out this post: https://nursekierston.com/2019/12/24/my-first-blog-post-contracted-or-salaried/
Why do you need a business as a contracted healthcare provider?
Let’s start by talking about why you need this information. If you are a contracted employee, it’s a great idea to set up a business to employ yourself for two main reasons. First, it can help you save money in taxes (and we all love saving money). Second, it can provide you a legal layer of protection. Now let’s jump into how to do this. It’s grueling, but I promise to make it as concise and easy as possible!
Step 1: Choose a business name
This is fun, but don’t overthink it! It can be your name or a name you come up with. Think about what you plan to do with your business in the future. Will you use this name to start your own practice? Do you just need this name for contracted employment agreements?
Here’s the link you would use to see if your business name is available in Georgia:
Step 2: Register Your Business
Go to this link https://ecorp.sos.ga.gov/Account to create an account with the Georgia Corporations Division. Once logged in go to “Create or Register a Business.” From here just follow the prompts. I created a “domestic limited liability company.” I selected NAICS code “Healthcare and social assistants (62) and NAICS subcode “Office of mental health practitioners (except physicians) (621330).” When entering an address for the business recognize that this address is going to be public record. So, you may want to choose a PO box if possible. Complete the rest of the information, pay $100, and voila! You are now a proud owner of an LLC! Be sure you keep receipts and any emails you receive confirming your registration to provide your CPA during tax season. You can also deduct (or expense??) your start up fees!
Step 3: Apply for an EIN
An EIN is like a social security number for your business. This number is how the IRS will be able to identify your business. You will receive your EIN to write down once you complete your application and you will receive it in the mail a few days later.
Here’s the link to apply for an EIN:
Step 4: Apply for a state tax ID and withholding number
This is not required in all states. In Georgia this is required. You will be making tax payments to your state and to the IRS. Your state tax ID allows you to make your state tax payments. Here is the link for the starting point to get a state tax ID and withholding number:
Step 5: File form 2553 with the IRS to be taxed as an S Corp (optional)
This step is completely optional. Completing this step allows you to file your taxes as an S Corp instead of a sole proprietorship. I am not a tax professional. If you have read my other posts you know how much I hate taxes. So, in simplest terms, if your business is taxed as sole proprietorship (which is what your LLC will automatically be taxed as if you do not file to be taxed as an S Corp) all your income is subject to all the taxes you pay. If you are taxed as an S Corp, you will pay yourself a reasonable salary which will be fully taxed. All your other income is taxed at a lower rate. Once the IRS has received and approved form 2553, you will receive a letter in the mail stating you will be taxed as an S Corp. This can take several weeks.
Here’s a link to IRS form 2553 and the instructions for the form:
Step 6: Sign up with a payroll service (if you are going to be taxed as an S Corp)
If you are going to be taxed as an S Corp and need to pay yourself a salary, you will need a payroll service to manage your salary and payroll taxes. I use OnPay. They have been super simple to use, very reliable, and have been very responsive when I needed help (and I needed A LOT of help).
Step 7: Sign up with an accounting software
Register with some type of accounting software. I use Quickbooks online. I don’t find it to be the most user friendly and my CPA usually has to fix some things at the end of the year, but it’s cheap and it gets the job done. I just connected my bank and credit card accounts and each month I go in and make sure all income and spending has been categorized. To be totally honest, I really only do this quarterly and sometimes less, but even when I put it off it only takes me about an hour to get all caught up. Quickbooks also allows you to generate all the reports your CPA will need to plan and complete your taxes which has definitely made tax season much easier for me.
Step 8: Get a fantastic CPA
I am a big believer in having people around who are experts at what they do so I can focus on being an expert at what I do. So, find a fantastic CPA so you can just give them the documents they ask for and you can be on your merry way. Filing my taxes as an S Corp typically costs about $800-$1000 per year.
You are all set! Hopefully I made this process easy-ish for you! If you have questions or thoughts, please comment below. Do you hate taxes as much as I do? Let me know in the comments! Also, go to the home page and subscribe to be notified each time I make a new post.