There is a big difference in tax obligations between an independent contractor and employee and w2 vs w9.
Optometrists working in private practice, opticals, or various commercial modalities can be considered independent contractors or employees. Oftentimes, there is not much of a difference between the two in regards to how you are treated or what your work entails; however, there is a massive distinction between tax obligations and how you are paid.
It is therefore critical to understand how the distinction between independent contractor and employee is made. In this video interview, CPA Gary Topple, highlights the differences between w2 vs w9, and talks pros and cons of both, including the different tax implications.
Many people always wonder if they should hire an accountant or do their taxes and finances themselves. For me, hiring an accountant was the single best thing I did for getting a better grasp of business concepts. Gary does all the financial accounting for NewGradOptometry LLC., CovalentCareers Inc., and my personal accounting, but this isn't the single most important point. What is important is that I have built a great relationship with Gary. He teaches me financial and business lessons over coffee or on quarterly phone calls, and this has helped me immensely in my endeavors. So I say, yes, hire an accountant, but hire one who is willing to teach you lessons, not just do your taxes. If you want Gary's contact information, let me know here. - Matt Geller O.D., founder NewGradOptometry.com
If you have any specific questions regarding the tax implications and classification of independent contractors and employees, please let us know in the comments below!
Here is a great tax planning article from Gary Topple CPA.
For more tax articles see below