Physician Moonlighting Tax Calculator 2026 β W-2 + 1099 Doctor Income
Calculate total tax for physicians with hospital W-2 salary plus locum tenens and call coverage 1099 income. Includes SE tax, Additional Medicare Tax, SEP-IRA contribution, quarterly estimated payments, and year-end true-up.
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Gross W-2 wages before any deductions $
Federal income tax withheld per W-2 $
Gross 1099 income from locum tenens agencies $
Independent call coverage or moonlighting payments $
Malpractice, CME, licensing, travel, equipment $
2026 limit: $24,500 (employee deferral) %
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From 1099 income β max 25% of net SE comp, cap $70,000 Examples:
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Total Federal + SE Tax
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SE Tax on 1099 Income
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Year-End Balance
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Q3 Estimated Payment Due
Physician Income & Tax Breakdown
How W-2 + Moonlighting Physician Taxes Work
Physicians with hospital employment and moonlighting income face a hybrid tax situation. The W-2 portion has FICA withheld automatically; the 1099 portion requires SE tax plus federal and state income tax paid via quarterly estimates.
SE Tax with W-2 Offset
Total 1099 = Locum 1099 + Call Coverage 1099
Net SE Profit = Total 1099 β Business Expenses
SE Earnings = Net SE Profit Γ 92.35%
SS Portion = SE Earnings Γ 12.4% (only on remaining cap after W-2 wages)
Medicare Portion = SE Earnings Γ 2.9% (no cap)
Add. Medicare = 0.9% on combined income > $200K single / $250K MFJ
SEP-IRA Max = 25% Γ (Net SE Profit β SE Deduction), capped $70,000
Net SE Profit = Total 1099 β Business Expenses
SE Earnings = Net SE Profit Γ 92.35%
SS Portion = SE Earnings Γ 12.4% (only on remaining cap after W-2 wages)
Medicare Portion = SE Earnings Γ 2.9% (no cap)
Add. Medicare = 0.9% on combined income > $200K single / $250K MFJ
SEP-IRA Max = 25% Γ (Net SE Profit β SE Deduction), capped $70,000
Sources and References (click to expand)
- IRC Section 1401 β Rate of Tax on Self-Employment Income
- IRS Publication 560 β Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
- IRS Form 1040-ES β Estimated Tax for Individuals (2026)
- IRS Schedule SE β Self-Employment Tax (2026)
- IRS Publication 535 β Business Expenses (deductible moonlighting costs)
- IRS Form 8959 Instructions β Additional Medicare Tax (0.9% on high earners)
Extended
Multi-Source Income Scheduler + SEP-IRA Calculator
Track multiple 1099 income sources by month, calculate SEP-IRA maximum, quarterly estimate scheduler, and income chart
Enter 1099 income by month and source to track earnings and plan estimated payments throughout the year.
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| Month | Source | Income | Cumulative YTD |
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No entries yet. Add income by month above.
Calculate the maximum SEP-IRA contribution for 2026 based on your net self-employment income.
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Used to calculate SE tax SS offset Calculate each quarterly estimated tax payment needed to avoid underpayment penalties.
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Total tax from prior year Form 1040 line 24 $
Determines 100% vs 110% safe harbor $
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| Quarter | Due Date | Required Payment (Safe Harbor) | Required Payment (90% Current) | Recommended Payment |
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Frequently Asked Questions
How is SE tax calculated on physician moonlighting income when there is also a W-2 salary?
Self-employment tax on moonlighting income is calculated on net SE profit Γ 92.35% (the SE multiplier). The Social Security portion (12.4%) only applies to earnings up to the $184,500 wage base for 2026, and your W-2 salary counts toward that cap first. So if your W-2 salary already exceeds $184,500, your moonlighting income owes only the 2.9% Medicare portion of SE tax (plus 0.9% Additional Medicare if combined income exceeds $200K single / $250K MFJ). This is a significant tax advantage for high-salary physicians with moderate moonlighting income.
How much can a physician contribute to a SEP-IRA on moonlighting income in 2026?
For 2026, SEP-IRA contributions are capped at 25% of net self-employment compensation (after SE deduction), with a maximum of $70,000 (the defined contribution limit). Net SE compensation for this purpose is net profit minus the deductible half of SE tax. For example: $60,000 moonlighting net profit minus $4,239 SE deduction = $55,761 net SE compensation. SEP-IRA max = 25% Γ $55,761 = $13,940. SEP-IRA contributions are 100% employer-funded and are not subject to the $24,500 employee deferral limit that applies to 401(k)/403(b) plans.
What is the Additional Medicare Tax and when does it apply to physician income?
The Additional Medicare Tax of 0.9% applies to combined earned income (W-2 wages + net SE income) exceeding $200,000 for single filers or $250,000 for married filing jointly. For physicians: the employer withholds 0.9% on W-2 wages above $200,000, but this withholding is based only on W-2 income at that employer. If total combined W-2 plus moonlighting income crosses the threshold, the remaining 0.9% is owed on the moonlighting portion when you file your return. This is captured on Form 8959 and paid through quarterly estimated taxes.
Should physician moonlighting income be run through an LLC or S-Corp?
An LLC taxed as sole proprietor (Schedule C) requires full SE tax but is simple. An S-Corp can save the 15.3% SE tax on distributions above a reasonable salary, but requires payroll processing, 1120-S filing, and typically $2,000β$4,000 in annual compliance costs. The breakeven for physicians is typically $50,000β$80,000 of annual net moonlighting income. Below that, the overhead often exceeds SE tax savings. Some states also impose additional franchise taxes on S-Corps. Many physicians with moderate moonlighting income are better served by a Solo 401(k) or SEP-IRA for tax savings rather than an S-Corp.
How do quarterly estimated taxes work for a moonlighting physician?
If you expect to owe $1,000 or more in federal taxes after withholding, you must make quarterly estimated payments. Physicians with W-2 hospital income often have sufficient withholding to cover tax on the W-2 portion, but the moonlighting SE tax and income tax typically require quarterly payments. 2026 due dates: Q1 April 15, Q2 June 16, Q3 September 15, Q4 January 15, 2027. To avoid penalties: pay the lesser of (a) 90% of current year tax or (b) 100% of prior year tax (110% if prior AGI exceeded $150,000). Form 1040-ES calculates the required payment amount.