Revised August 28th, 2024
As a Certified Registered Nurse Anesthetist (CRNA), managing your finances effectively is crucial for your long-term success and peace of mind. One essential professional you should have in your corner is a Certified Public Accountant (CPA) who understands the unique financial needs of healthcare professionals. In this guide, we will explore the key factors to consider when searching for the best CPA for your CRNA S-Corp.
Why 1099 CRNAs Need a Specialized CPA
CRNAs, like other healthcare professionals, have a unique financial situation. From a tax perspective, their businesses are high margin with naturally low expenses. This is because there are very few necessary costs (i.e. licensure maintenance, driving to various locations to administer anesthesia, and some other small things). The opportunity for tax savings lie in finding other costs that you're already paying for and changing their primary use to business purposes, and properly documenting it to support the deduction. Then there are deferral (i.e. Solo 401k) and structure (i.e. S-Corp) strategies.
Often, CRNAs are told to have an S-Corp without properly implementing and documenting S-Corp strategies. Some tax professionals simply like the opportunity to charge the higher fees for filing the additional S-Corp returns and don't help with planning or payroll compliance. On the other side of the spectrum, some firms will offer a full-service solution that's overkill for a CRNA's needs. These service packages often include monthly or quarterly bookkeeping and reporting which may be useful for small businesses with high costs and employees but not for independent owner-operator CRNAs.
A CPA who specializes in CRNAs will often have a minimalist approach toward accounting and payroll operations where these can be performed only as needed for tax planning and compliance purposes. The most important component from a tax professional who focuses on CRNAs is the tax planning and their ability to help you execute and adjust that plan as the year progresses. The service packages tailored to CRNAs will provide the benefit of tax planning, implementation of the plan and corporate compliance without the cost of monthly or quarterly accounting services that are better suited for more generic small businesses. In essence - you'll pay only for services that alleviate your tax burden, help you build wealth and keep you compliant.
Questions a CRNA should ask a prospective CPA
[And how we'd answer them]
What are the challenges and opportunities unique to the accounting and taxes of a 1099 CRNA? [Answer: The challenges are in reducing taxable income and, if applicable, reducing unnecessary payroll taxes. Their are opportunities to exert a moderate level of control over your taxable income through tax deduction and deferral strategies like travel expenses, health insurance, retirement plans, depreciation on business-use assets, and more.]
What are the benefits of having an S-Corp and when do those benefits justify the added costs and complexity? [Answer: In some cases, there are opportunities to reduce your payroll tax burden. If you are in a state with PTE (pass-through entity) deductions, there are opportunities to side-step the $10,000 state tax limitation. There are also some opportunities from the simple formality of having a corporation that files a separate tax return (i.e. financing for expansion/commercial real estate, etc). As most folks' tax situations are different, the cost-benefit can only be done with a proper analysis of your scenario.]
For S-Corps, what is your approach toward determining and substantiating reasonable compensation for myself as the owner? [Answer: A reasonable compensation study should be performed. This study involves a 3-pronged approach toward determine a salary range for which you should put yourself on payroll. It should be updated annually.]
What is the number one tax deferral strategy I should leverage as a 1099 CRNA? [Answer: It depends! But likely, it's going to be implementing and contributing tens of thousands to a retirement plan]
What is your process for ensuring that all my taxes will be paid on time so that I don't incur penalties or have a surprise tax bill when we file? [Answer: We will coordinate with you at least once (ideally twice) per year to project your taxes and ensure that your quarterly estimates and, if applicable, payroll withholdings will cover the estimated liability for the year.]
What is the number one tax deduction strategy I should leverage as a 1099 CRNA? [Answer: It will be through a combination of write-offs that can best be achieved through strategic tax planning, robust bookkeeping and effective coordination of payroll-deducted expenses. There will NOT be a single deduction that will move the needle for everyone as everyone's costs and business-use assets incur a different burden.]
How does your service offering for CRNAs differ from that of a generic small business? [Answer: The service offering will offer accounting operations as needed to best serve the CRNAs tax strategy and compliance. Costs will be lower than a service offering for a generic small business because of the minimalist approach toward the CRNA's corporate compliance and accounting operations. For example: payroll, bookkeeping and financial reporting would only be necessary for the sake of tax planning and tax filings for CRNAs whereas a generic small business may benefit from monthly or quarterly accounting services and meetings.]
How to Find the Best CPA for You
Reach out to other CRNAs or 1099 healthcare professionals in your network for recommendations. Shameless plug: we might be able to help you (view pricing and contact info). Personal referrals are often the best way to find a CPA who comes highly recommended and has a proven track record of success.
Ask other CRNA-focused professionals. Sometimes your financial advisor, insurance broker or even HR contact will know someone who can help people in your exact scenario.
Once you have a shortlist of potential CPAs, schedule an initial consultation to discuss your needs and assess their fit with your financial goals. Steal some of the questions above and add a few of your own to ask.
While cost is an important factor, prioritize value over price when choosing a CPA. A higher fee may be justified if the CPA offers specialized expertise that can help you optimize your financial strategy effectively.
Conclusion
In conclusion, finding the Best CPA for CRNAs involves considering their industry experience, understanding of CRNA-specific financial situations, communication style, commitment to ongoing education, and overall fit with your needs. By taking the time to research and evaluate potential CPAs, you can find a financial partner who will help you navigate the complexities of your financial journey as a CRNA.
Remember, your financial well-being is too important to leave to chance. Invest in finding the right CPA who can provide you with the expertise and support you need to thrive in your career as a CRNA.
If you're interested in speaking with us - call us at 323-577-9897 or schedule a discovery call to see if we'd be a good fit to help you.
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