The 1099 Dental Hygienist: Myths vs Facts
The dental industry is undergoing a transformation, and dental temps are at the forefront of this change.
With the rise of digital platforms and the evolving nature of employment, many dental hygienists are exploring the possibility of becoming 1099 independent contractors. This allows them to offer their services on a temporary basis to numerous dental practices, providing flexibility and control in their careers. But how can dental hygienists make this transition? Let's dive in.
Understanding the 1099 Landscape
“1099” is not a job classification at all. It’s an IRS form for reporting income. Platforms like dentalWORKS classify professionals offering their services as 1099 Independent Contractors. This means that they are not employees of the platform or the dental offices they temp at.
Instead, they operate as independent entities, small business owners, responsible for their own revenue, taxes, and work conditions. The perks of being a 1099 independent contractor over a W2 employee are found in another blog of ours, here!
The Power of Digital Platforms
Digital platforms, such as dentalWORKS, are revolutionizing the way dental hygienists connect with dental offices. dentalWORKS acts as a marketplace where dental professionals can advertise their credentials, view work opportunities, and communicate directly with offices. We offer a streamlined process for temps to find temping opportunities without going through traditional staffing agencies, who control your schedule and pay.
Debunking the Myths
There are lots of misconceptions in the industry about whether or not dental professionals can temp as 1099. The confusion mostly comes from multiple government agencies providing different definitions.
So, let’s tackle some of the biggest industry myths about working as a 1099 independent contractor in the dental world.
Myth #1: It’s illegal for dental hygienists to be 1099 independent contractors because we work under the “supervision” of a dentist.
Incorrect. There is no such thing as an “employee for a day”. Hygienists who temp are considered 1099 independent contractors.
The IRS, and by extension all State governments, use a 20-factor test to determine the relationship of a worker to an employer (either W2 or 1099.) Out of the 20 factors listed below, there is no single “deciding” factor. Government organizations take a comprehensive view of the entire working relationship to determine a worker’s employment status.
The “instruction” or “supervision” factor from this 20 factor test states that an employee “receives instruction and direct supervision from the employer, regarding details of work.” The reality is that hygienists and assistants rely on their thousands of hours of education, training, and work experience to accomplish the job, not the direction of a dentist. Even if a hygienist receives some instruction and supervision from a dentist, this is one factor of 20 and alone is not enough to sufficiently classify the hygienist as a W2 employee.
Furthermore, the Utah State Department of Commerce, Division of Professional Licensing has clarified that the only actual “direct supervision” a hygienist actually requires from a dentist is when the hygienist is administering “local anesthesia or nitrous oxide”. Outside of those two situations, a hygienist is free to do their work as dictated by their training and licensing.
When we apply all 20 factors of the IRS test to the work of a dental temp, 13 of the factors justify classifying the temp as an independent contractor, 4 are ambiguous (meaning they can be interpreted both ways), and only 3 justify classifying a dental temp as a W2 employee.
Just to be sure, let’s look at all 20 factors from the perspective of a dental temp.
Green = Classifies temp as an independent contractor
Yellow = Could be both
Red = Classifies temp as employee
As demonstrated above, using the IRS 20 factor test, a dental temp clearly qualifies as a 1099 independent contractor, and not a W2 employee.
Myth #2. I was a temp for an office, they gave me a 1099, then that office was audited and fined.
Answer: Audits and fines for offices are a result of not paying taxes… not for issuing a 1099.
Unemployment insurance has to be paid on every dollar of earned income in the State of Utah. It doesn’t matter if you’re 1099 or W2. Only a handful of jobs are excluded from paying unemployment insurance taxes (like real estate agents and insurance salespeople). Usually, a W2 employee has their portion of unemployment insurance paid by the employer (it’s roughly $3 for every $1,000 earned.)
The Department of Workforce Services (DWS), who manage the unemployment benefits for the State of Utah, has stated that they are not concerned whether a temp is paid as a W2 employee or a 1099 independent contractor (because those are IRS tax forms not relevant to their duties and responsibilities). DWS is only concerned as to whether the income was reported and that unemployment insurance taxes were paid.
If a dental practice paid a temp as a 1099 independent contractor, and they were subsequently audited and fined by the Department of Workforce Services (DWS), it means that either:
The practice incorrectly classified W2 employees as 1099 contractors and was audited and fined as a result, or
The practice correctly paid 1099 contractors, but that income was not reported by the temp, and the temp subsequently applied for unemployment benefits.
When you apply for unemployment benefits, DWS will verify your income, but if you don’t report your 1099 income then they will discover an “income gap” and investigate the dental practice for not paying unemployment insurance, not for giving 1099s to temps.
Fortunately, dentalWORKS pays into the Utah State unemployment insurance fund for all temps, so you can scratch that tax worry off your plate!
Myth #3. I’ll lose my license if I work as a 1099.
Answer: The Department of Licensing has no interest how temps are paid (W2 or 1099) or where they work (one office or multiple).
Tthe Department of Licensing (DoPL), who is in charge of maintaining the standards and requirements for being licensed as a hygienist in the State of Utah, has explained that the form of payment a temp receives (1099 or W2) has no relation to the mission of DoPL.
The only concern for DoPL is that a temp hygienist:
Is licensed in their state of registration
Is working within their state of registration
Is working within the scope of their license
As such, dental professionals are free to temp as a 1099 independent contractor at any offices needing their services and will keep their licenses as long as they adhere to those three requirements.
Myth #4. I need a 1099 every place I work.
Incorrect. dentalWORKS provides one 1099 form at the end of the year for every temp.
If you work as a 1099 independent contractor outside the dentalWORKS app, then every dental practice you temp with will need to send you a 1099 form for year end taxes. This could result in dozens or even hundreds of 1099 forms if you’re a full time temp.
With dentalWORKS, you’ll receive one 1099 form at the end of the year that reports all of your income earned through the dentalWORKS app.
Myth #5. 1099 means I have to pay more taxes, so I make less money.
Answer: 1099 independent contractors are small business owners with access to significantly more tax write offs than a W2 employee.
Every individual who earns income in Utah, whether as a W2 employee or 1099 independent contractor, has to pay federal taxes in the form of social security and medicare, commonly known as “payroll taxes.” This cost is usually split between the W2 employee and the employer (employee pays 7.5% before they receive their paycheck and their employer pays 7.5%).
As an independent contractor, the total 15% of payroll taxes is paid by you. The big difference is that unlike a W2 employee who has to pay 7.5% on their gross income, a 1099 worker pays their portion on the net income.
This means that a W2 employee is taxed before they even get their paycheck (we’ve all had the sticker shock of getting our first paycheck and seeing the taxes taken out.) A 1099 worker gets all of their paycheck up front, pays all of their business expenses (which can include car payments, gas, mileage, scrubs, laptop, rent, instruments, internet, licensing, and much more) and then pays taxes on whatever is left over. We’ve written a great article that outlines all the financial benefits.
By utilizing all of the tax write offs available to 1099 independent contractors it is quite common to pay less in total taxes than a W2 counterpart.
Myth #6. I’ll be audited if I have both a W2 and a 1099.
Incorrect. Millions of people in the United States work as an employee for a company (W2 employee) and also have a side hustle where they earn money as a 1099 contractor. There is no law preventing someone from earning multiple streams of income as employees or independent contractors.
Note: Always consult with legal and tax professionals to understand the specific tax benefits and responsibilities of becoming a 1099 independent contractor.
