Working as a 1099 CRNA means the facility pays you as an independent contractor, withholds nothing, and hands every tax, insurance, and retirement obligation back to you. The pay is higher and the schedule is yours, but only if the legal and financial structure underneath the work is built correctly. Getting it wrong is expensive, sometimes in five figures per year.
What follows is the setup a new independent CRNA has to get right in the first year: entity, taxes, retirement, insurance, and contracts.
Set Up the Right Business Entity First
If you do nothing, you’re a sole proprietor by default. You and the business are the same legal person, so a lawsuit or business debt reaches your personal savings, home, and other assets. Most independent CRNAs move past this quickly.
A limited liability company separates personal assets from professional liabilities. In many states, licensed clinicians are required to form a professional limited liability company (PLLC) or professional corporation (PC) rather than a standard LLC. Forming the wrong type can create problems with your licensing board and your malpractice insurer, so confirm the requirement in your state before filing. Filing fees for a PLLC typically run between $70 and $300, and annual or biennial reports add $25 to $800.
The entity is the legal container for your contracts, malpractice coverage, and tax filings. It does not, by itself, decide how you’re taxed.
Consider the S-Corp Election Once Income Justifies It
With a PLLC or PC in place, you can file IRS Form 2553 to have the entity taxed as an S corporation. Your legal entity doesn’t change; the tax treatment does. S corporation income passes through to shareholders, and you can split what you take out between a W-2 salary and shareholder distributions.
That split is where the savings come from. Self-employment tax (15.3% for Social Security and Medicare) applies to the salary, not the distributions. On $300,000 of PLLC earnings, paying yourself a $150,000 salary means the other $150,000 flows out as a distribution taxed at ordinary rates but exempt from the 15.3% payroll hit. The savings can easily reach $15,000 or more a year.
The salary has to be “reasonable” by IRS standards, judged against your training, duties, hours, and what comparable CRNAs earn for similar work. There is no safe-harbor ratio. The “60/40 salary-to-distribution” figure circulating online is a myth. Pay yourself $40,000 on $200,000 of billings and expect the IRS to reclassify the distributions as wages and add back taxes plus penalties. Anchoring your salary to what employed CRNAs earn in your region is the safest posture.
The election also brings real overhead: formal payroll for yourself, quarterly payroll tax filings, and a W-2 at year end. It pays off once your net income is high enough that the self-employment tax savings clearly exceed the payroll cost.
Plan for Self-Employment Tax and Quarterly Payments
Without the S-Corp election, every dollar of net self-employment income carries the full 15.3%: 12.4% Social Security and 2.9% Medicare.1Social Security Administration. Contribution and Benefit Base Social Security applies only to the first $184,500 in 2026; Medicare has no cap. Above $200,000 for single filers or $250,000 for joint filers, an additional 0.9% Medicare surtax applies to the excess.
Half of your self-employment tax is deductible as an adjustment to gross income on Form 1040. That doesn’t lower the self-employment tax itself, but it lowers your income tax. Self-employed health insurance premiums are also deductible above the line.
Because nothing is being withheld, you send the IRS quarterly estimates on Form 1040-ES. The four 2026 deadlines are April 15, June 15, September 15, and January 15 of the following year.2Internal Revenue Service. Estimated Tax Miss them and underpayment penalties compound each quarter. To avoid penalties, pay at least 90% of the current year’s liability or 100% of last year’s. If your prior-year adjusted gross income was over $150,000, the safe harbor rises to 110% of the prior year’s tax.
A common first-year mistake is sizing the first quarterly payment off your old W-2 experience. Your effective rate as a contractor is higher because you’re covering the employer’s payroll share too. Set aside 30% to 35% of every payment until you have a full year of data.
Keep the Records the IRS Expects
Get an Employer Identification Number from the IRS. It’s free, takes minutes online, and using it in place of your Social Security number on W-9s and contracts adds identity protection.3Internal Revenue Service. Get an Employer Identification Number
For 2026, each facility that pays you $2,000 or more must issue a Form 1099-NEC. The threshold rose from $600 for payments made after December 31, 2025.4Internal Revenue Service. Form 1099-NEC and Independent Contractors You may not receive a 1099 from every facility. You still have to report all of it.
Income, expenses, and net profit go on Schedule C of Form 1040.5Internal Revenue Service. Instructions for Schedule C (Form 1040) Deductible business expenses typically include malpractice premiums, continuing education, licensure and certification fees, travel between facilities, equipment, and professional memberships. Keep mileage logs, digital receipts, and clean records for every expense. Round estimates don’t survive scrutiny.
Open a separate business bank account and route all professional income and expenses through it. Commingling personal and business funds makes it very difficult to substantiate deductions, and the IRS can disallow expenses it can’t verify. The accuracy-related penalty for underpayment due to negligence or substantial understatement is 20% of the underpaid amount.6Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments Willful evasion is a felony carrying up to five years in prison and fines up to $100,000.7Office of the Law Revision Counsel. 26 U.S.C. 7201 – Attempt to Evade or Defeat Tax
A Note on the QBI Deduction
Section 199A allows some self-employed people to deduct up to 20% of qualified business income. Healthcare is a “specified service trade or business,” which means the deduction phases out and then disappears entirely once taxable income passes annually adjusted thresholds. Many experienced CRNAs earn well above the phase-out range and get nothing from it. If you’re early in independent practice, working part-time, or filing jointly with a lower-earning spouse, model it with a tax professional before assuming it applies.
Fund a Retirement Plan Built for the Self-Employed
Independent contractors have access to retirement plans that often allow larger contributions than employer-sponsored ones. Two options dominate.
SEP IRA
A Simplified Employee Pension IRA allows contributions of up to 25% of net self-employment earnings, capped at $72,000 for 2026.8Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs) It’s simple: minimal filing until the balance hits certain thresholds, and contributions can vary year to year. The limitation is that everything is treated as an employer contribution, so the 25% ceiling is the ceiling.
Solo 401(k)
A Solo 401(k) allows both employee deferrals and employer contributions. For 2026, employee deferrals go up to $24,500, and total combined contributions can reach $72,000. At age 50 or older, a standard catch-up of $8,000 raises the ceiling to $80,000. Under a SECURE 2.0 Act provision, individuals aged 60 to 63 can make an enhanced catch-up of $11,250 in place of the standard $8,000, taking the total to $83,250 if the plan document allows it.
The plan document has to be adopted by December 31 of the tax year the plan takes effect. Once total assets across all your one-participant plans exceed $250,000, Form 5500-EZ becomes an annual filing.9Internal Revenue Service. Instructions for Form 5500-EZ For most high-earning CRNAs, the Solo 401(k) allows a larger total contribution than a SEP because of the employee deferral component.
Buy Your Own Malpractice, Health, and Disability Coverage
Malpractice
Facility malpractice coverage protects the facility, not you. You need your own policy, and you’ll be choosing between two forms.
A claims-made policy covers you only if the policy is active when a claim is filed and the incident happened after the policy’s retroactive date. Premiums start lower and rise over time. When you leave a facility or switch insurers, any claim filed after the old policy ends is uncovered unless you buy an extended reporting period, usually called tail coverage. Tail typically costs 150% to 200% of the last annual premium. Without it, every procedure done under that policy is exposed.
An occurrence policy covers any incident that happened during the policy period, regardless of when the claim is filed later. No tail is needed. Premiums are higher upfront, but the lifetime cost can be similar once tail purchases on claims-made policies are factored in.
Health and Disability
Health insurance and disability coverage are now on you. Individual health plans come from the marketplace or a broker, and the premiums are deductible above the line as self-employed health insurance.
Disability deserves more attention than most new contractors give it. Your ability to deliver anesthesia is your income. An “own occupation” policy pays if you can’t work as a CRNA specifically, even if you could do some other kind of work. That is meaningfully stronger protection than a generic policy. Coverage involves medical underwriting and often carries a 60 to 90 day waiting period before benefits start, so get it in place before you leave employed status.
Read the Contract, Then Sign
Credentialing Comes First
Before you work anywhere, the facility runs credentialing: primary source verification of your licenses, certifications, education, and work history directly with the issuing institutions.10The Joint Commission. What Is Primary Source Verification and to Whom Does It Apply? The process can take weeks or months. Gaps between contracts are normal, especially at your first few facilities. Budget for them.
Three Clauses to Read Closely
Independent contractor agreements are usually drafted by the facility or the staffing agency, and they tend to favor whoever drafted them. Three areas need real attention.
- Non-compete clauses. Many contracts restrict where you can practice after the engagement ends. Enforceability varies significantly by state. Courts generally look at whether the restriction is reasonable in duration, geographic reach, and business purpose. A one-year, 30-mile restriction is easier to defend than a three-year, statewide one. Some states won’t enforce non-competes against independent contractors at all. Check your state before assuming the clause has teeth or doesn’t.
- Indemnification. A broad hold-harmless clause can push financial responsibility for the facility’s own negligence onto you. These provisions often get buried in boilerplate. Push for language limiting your indemnification to losses caused by your own acts or omissions.
- Payment terms. The contract should specify how you submit hours or cases, whether by weekly timesheets or monthly invoices, and when the facility pays. Most facilities pay within 15 to 30 days by electronic transfer. Get the terms in writing. A recruiter’s verbal assurance won’t survive a billing dispute.
Staffing Agencies
Many 1099 CRNAs place through locum tenens agencies rather than contracting directly. The agency handles placement and sometimes credentialing, but taxes, insurance, and entity structure remain yours. Read agency contracts as carefully as facility contracts. Some agencies insert assignment-specific non-competes that prevent you from returning to the same facility as a direct contractor later, which can quietly cap your future earnings at places where you’ve already built relationships.