Locum Tenens Multi-State Tax Estimator (2026)

A mixed locum year, part W-2 employment, part 1099 assignments, produces a tax return that behaves like two careers stapled together. The W-2 side arrives pre-withheld and FICA-paid. The 1099 side arrives gross: no withholding, no employer FICA, and a self-employment tax bill layered under the income tax. The estimator above models the combined federal picture using real 2026 brackets, the standard deduction, and the SE tax wage-base interaction.

What the calculator deliberately ignores: state taxes (each assignment state is its own return), the QBI deduction, retirement contributions, health insurance deductions, and the Additional Medicare Tax. Those are exactly the levers where planning happens, so the guide below walks a realistic locum year through each, from the SE tax mechanics to the filing map to the S-corp question.

The running example: a single physician who earned $150,000 in W-2 wages from a half-year hospital job, then $180,000 of 1099 locum income across assignments in California, Texas, and Illinois, with $20,000 of deductible business expenses.

Self-employment tax is 15.3%, 12.4% Social Security plus 2.9% Medicare, applied to 92.35% of net self-employment earnings under IRC 1402. The Social Security portion stops at the 2026 wage base of $184,500, and here is the interaction: W-2 Social Security wages consume the base first, so only the remainder is exposed to the 12.4% on your 1099 side. Medicare’s 2.9% has no cap, and the 0.9% Additional Medicare Tax applies once combined wages and SE income pass $200,000 (single) or $250,000 (married filing jointly), thresholds that are statutory and never indexed.

Half of the SE tax comes back as an above-the-line deduction, which softens the sting but does not change the planning: SE tax is usually a five-figure line on a real locum year, and it is entirely absent from W-2 withholding intuitions.

Our example physician files: a federal return; nonresident returns in California and Illinois for the income earned there (Texas levies no individual income tax); and a resident return at home reporting everything, with credits for the California and Illinois tax paid. The order matters, nonresident returns first, because the home-state credit is computed from them.

1099 income sources to where the work was physically performed, so the contemporaneous log of days and earnings per assignment is the master document for the whole map. Reciprocity agreements will not help: they cover W-2 wages only, never contractor income, a distinction big enough that it has its own page linked below.

Each income-tax state also expects quarterly estimated payments on its slice, not just an April settlement. States assess their own underpayment penalties independent of the IRS.

Federal law charges an underpayment penalty computed like interest, at the federal short-term rate plus 3 points (7% for Q3 2026), unless your withholding and quarterly payments hit a safe harbor: 90% of the current year’s tax, or 100% of last year’s tax, 110% if last year’s AGI exceeded $150,000, which describes nearly every practicing physician.

The practical system: take last year’s total tax, multiply by 110%, subtract what your W-2 withholding will cover, and divide the rest across the quarterly due dates, April 15, June 15, and September 15, 2026, and January 15, 2027. A locum whose income jumped can owe a balance in April, but a met safe harbor means no penalty on the ride. W-2 withholding has a bonus property: it is treated as paid evenly through the year regardless of timing, so raising withholding late in the year can retroactively cure earlier underpayments.

Three levers move a locum’s federal bill most. First, the QBI deduction: 20% of qualified business income, made permanent by OBBBA. Medicine is a specified service business, so for 2026 the deduction phases out between $201,750 and $276,750 of taxable income for single filers ($403,500 to $553,500 MFJ). Our example physician lands in the phase-out band; a married locum with a lower-income spouse often keeps the full deduction. Retirement contributions that lower taxable income can directly rescue QBI in the band.

Second, the solo 401(k): the 2026 employee deferral is $24,500 (shared with any employer plan you used that year), plus an employer contribution from the practice side, up to a combined $72,000 per unrelated employer under the 415(c) limit. A locum who already deferred at the W-2 job can still make the employer-side contribution on 1099 earnings.

Third, the above-the-line stack: half of SE tax, self-employed health insurance premiums (100% deductible against SE income when no employer-subsidized coverage is available), and HSA contributions ($4,400 self-only, $8,750 family for 2026) all reduce AGI before the standard deduction ($16,100 single, $32,200 MFJ for 2026) even enters the picture.

The S-corp pitch: pay yourself a reasonable W-2 salary from the practice, take the rest as distributions, and skip SE tax on the distribution slice. The pitch is weakest exactly where our example sits. With $150,000 of outside W-2 wages already consuming most of the $184,500 Social Security wage base, the SE tax on the 1099 side is mostly uncapped Medicare, 2.9% to 3.8%, and the S-corp’s savings shrink toward the cost of running it: payroll, a separate 1120-S, state filings in every assignment state, and possibly registered-agent and qualification fees per state.

The math changes when the 1099 side is the whole year and large: a full-year locum with $300,000 of contractor income and no other wages has the full wage base plus Medicare exposed, and a defensible salary-and-distribution split can clear the overhead meaningfully. Multi-state locums should also price the state-side friction: an S-corp doing business in three states multiplies registrations and returns, and a few states tax S-corps at the entity level.

Rule of thumb from our locum practice: below roughly $150,000 of net 1099 income, or in any year with substantial outside W-2 wages, the S-corp rarely justifies itself; above that, run the actual numbers with reasonable compensation data rather than a forum heuristic. The full analysis lives on the locums S-corp page linked below.