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Re: Locum Tenens and Partnership Question

While I'm happy to answer your questions, I recommend that you set up a time to meet with a CPA in your area to discuss what entity makes the most sense for what you are trying to do. I also recommend that you meet with an attorney so you can find out what risks you can minimize by choosing the proper type of entity.

That being said, I think a partnership could help you achieve your goals. And since you already notified the IRS that you are a partership, if it will work, then why not use it. You and your wife will just take Draw payments (also called Guaranteed Payments) out of the partnership for services provided. You can then each contribute to a SEP IRA, or some other retirement account, based on these payments.

Operating as a Sole Proprietor would most likely require that you sign up for a new EIN. So the more places that already have your current EIN, the bigger the hassle.

Plus, if your wife will be the only employee on payroll of this practice, you'll need to incur the costs and headaches of dealing with processing payroll and remitting the approprite withholding taxes. (You'll avoid these costs and headaches by having the partership pay her Guaranteed Payments.)

As you can see, there are a lot of variables to consider. The various laws and tax rules in your state add another layer of confusion. That's why I recommend that you talk with a local CPA and attorney to help you decide how to best move forward.

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