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Locum tenens taxes: the tax-home rules that decide everything
The short answer
Locums income is 1099 income with a twist: travel. Whether flights, lodging, and meals are deductible turns on having a tax home and keeping each assignment temporary (expected to last a year or less). Get the facts right and assignments generate substantial deductions; drift into perpetual-traveler status and the same costs become personal expenses. Add multi-state returns and, at higher profit, the S-corp layer.
How it works
- Anchor a tax home: a regular base with real ties and duplicated living costs while away.
- Keep assignments temporary — the one-year expectation rule is a cliff, not a slope.
- Track by assignment: dates, location, travel, lodging, meals, mileage between engagements.
- File the states: income is generally sourced where you work; home-state credits prevent double tax but not paperwork.
- Layer the structure: Solo 401(k) always; S-corp when profit clears the bar.
Where it goes wrong
- No true tax home — deducting travel while living out of assignments
- Renewing the same hospital past a year and deducting like it is still temporary
- Skipping nonresident state returns until the notices arrive
Frequently asked questions
What is a tax home and why does it matter?
Your tax home is your regular place of business. Travel costs are deductible only when you are away from it temporarily — generally, assignments expected to last a year or less. Perpetual travelers with no tax home lose travel deductions entirely.
Can I deduct meals and lodging on assignment?
When traveling away from your tax home for temporary work: lodging at cost, meals generally at 50% or by per-diem method. Documentation of dates, locations, and business purpose carries it.
Does the one-year rule really end deductions?
Yes — once an assignment is expected to exceed one year it is treated as indefinite, the location becomes your tax home, and travel costs there stop being deductible from that point.
Should locums work run through an S-corp?
At sustained six-figure locums profit, often yes — the same breakeven math as any 1099 income. Multi-state filing comes with the territory either way.
Locums full-time or part-time?
We build the assignment tracker, the multi-state filing plan, and the entity and retirement structure in one engagement.
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