I'm a member of a large anesthesiology group.

The income structure is identical for all members of the group. We bill in time based units on anesthesia services we deliver to the patient.

Many in the group have assumed additional, uncompensated, roles. We have a board of directors who manages the business side of things (I'm a board member). We have others who spend hours each week organizing our scheduling, biweekly educational conferences, working with the hospital on pharmacy and equipment, doing all our IT work. Nobody gets paid for this and nobody wants to pay someone else to do this.

We can currently expense items related to our work and take this out of our own billings on a pre-tax basis. If I buy books or attend a meeting, I fill out an expense report and get that money reimbursed to me "pre-tax"

My question is can we pay ourselves for uncompensated non-anesthesia work and shift some income from our W2 to a 1099? For example, could a board member who attends meetings 25x/year, expense an annual fee of $10k and take this as pre-tax income that would be reported on a 1099. Instead of getting a W2 for $110,000, they would get a W2 for $100k and a 1099 for $10k.

I guess the advantages are more flexibility in deductions on the schedule C. The downside is the self employment tax but we are already paying our own employers portion of the income tax out of our billings.

I'm already working on an accountant regarding this but hoped that this community might have some real life examples to give.

AtlantaTaxExpert

I cannot give you any examples, but what you have in mind seems feasible under the tax code.