The Difference Between Hiring Therapists As 1099 vs. W-2 (part 1)

Should you hire additional therapists for your practice as 1099 or W-2 employees? I'll walk you through the decision process in this blog series so you can make an informed decision.

If your private practice is thriving and you are considering hiring additional therapists, one of the major questions is how to structure the employment relationship. Should you hire additional therapists as a 1099 contractor or W-2 employee?

In my private practice consulting experience and based on recent discussions in my Private Practice Toolbox Group it seems that most private practice therapists favor hiring therapists as 1099 contractors. When I ask why I often hear something like, "I hire 1099's because then I'm not responsible to pay the therapists employment taxes and it provides some cushion against legal responsibility for the acts of therapists providing contract services." While these statements are true, there is a lot more to consider when structuring the employment relationship and misclassification can be a costly mistake.

So what what's the difference between hiring a 1099 and W-2?

An 1099 independent contractor is a tax-related and legal term referring to an individual who contracts his or her services out to other businesses. An independent contractor is considered self-employed and is not considered an "employee" of the practice. The 1099 workers pays all of their own income tax in addition to self-employment taxes.

"Independent contractors do the work where, when and how they choose. Nobody tells them what order to do the job in, what hours to work, or when they can take off, " says Employment Attorney, Donna Ballman, author of How To Stand Up For Yourself Without Getting Fired.

A W-2 employee is an official employee of a company, or a private practice, whose taxes are withheld from and whose earnings are reported to the IRS at the year-end via a W-4.  The practice owner participates in paying the employees state and Federal taxes and has the ability to control how, where, and when the work is performed by the employee.

Michigan attorney Donald A DeLong says that control is the key issue. "If you control when the therapist works, where he/she works, how and when he/she gets paid, you require that he/she use your equipment, etc., then that worker is a (W-2) employee."

As I've researched this topic it is clear that there are no easy answers and a lot of grey areas. I hope to share some helpful information and resources over the next several posts to help you make the best choice when it comes to hiring.

The costs of inaccurately classifying employees

Inaccurately classifying workers can be very costly to an employer warns Vincent Porter, CPA of Porter & Company CPAs in Arlington Tx. Porter shares these words of caution with employers.

The IRS can conduct an audit of a business that is paying employees on a 1099 and hit them with back payroll taxes that can be very costly to a business not in compliance. This is a big issue we face almost daily with clients. They should understand that if they were to be audited by their State Unemployment agency or IRS they could face severe penalties for improperly classifying employees as contractors. Not only could they face unpaid employment taxes they could face heavy penalties.

In my next post in this series I'll tell you about my employment tax audit experience a few years ago!

Zach Klein via Compfight

2013 Therapist Blog Challenge

Build your practice and attract more clients to your practice by creating regular content on your private practice website. I'll make it easy for you!

Welcome 2013! I tell my private practice consulting clients is to have an integrated blog on their private practice website and become a regular online content creator. Potential clients are searching online for your services and I want them to be able to find you more easily. Here's how blogging can help.

Why is blogging on your private practice website important?

• Fresh website content boosts search engine rankings/SEO (remember Google is my #1 referral source)
• It add value to your website visitors and give them a reason to come back to your site
• It gives you valuable content to share on social media that direct people back to your website
• It helps you to strengthen your online presence as an expert
• It allows potential clients get to know you and your practice philosophy

Why are some therapists hesitant to start blogging?

• They don't know what to write about
• They think they have to write totally original content
• They think they have to write a "dissertation" (blogs posts only need to be 300-600 words)
• They haven't found their "blogging voice"
• They don't have the "time"
• They're scared

To participate in the 2013 Therapist Blog Challenge:

• Post your practice website link in the comments below.
• Watch for my suggested blog topic twice each month. I'll come up with the content idea so you don't have to. I'll title and number the posts "Blog challenge #1" ... so you can keep track.
• Write your 300-600 work blog article that week for your private practice website.
• Post your blog article link in the comment section on the corresponding post here on this Toolbox blog.
• Read and share other therapists articles.

Pretty easy, huh? So, are you IN? By the end of the year you'll have at least 24 articles on your website!

Blog challenge #1 coming soon....

Remember to post your practice website below and any questions you have. And please invite colleagues to join in. This will be fun!

(c) Can Stock Photo

Therapist Roll Call: Join The Private Practice Facebook List

Thanks for your fantastic response to my roll call for private practice therapist using Twitter! Therapists from all around the globe have joined the list. I'll will continue to add therapists to the list so feel free to join anytime by commenting on that post.

I wanted to do the same thing for Facebook Business pages to help you connect to other like-mined therapists to share resources, ideas, practice building tools, and referrals. Only licensed mental health therapists will be listed.

Here's what you need to do to join the Facebook List...

Post a comment below and include the following information:

1. Facebook page name &  page link (Facebook business page, not personal profile)
2. your name & credential
3. your city & state
4. specialty areas

As the comments come in I’ll post comments and paste your info in the body of this post below to make it easy to click through and "like" the Facebook pages listed.  I look forward to connecting with you. Feel free to forward to colleagues.

Therapist Facebook Page List

Wasatch Family Therapy & Julie Hanks LCSW, Julie Hanks, LCSW, Salt Lake City, UT, women’s mental emotional health, emotionally focused couples therapy, family and parenting, private practice consulting, media contributor

Timeless Solutions Counseling Services ,Tiffany C. Huggins, MEd,NCC,LPC, Charlotte, NC, Specializing in loss and grief issues, Depression, Stress/Anxiety and Life Transitions for children, adults, and older adults.

Drops Of Change , Jo-Anne Mac Millan BA Hons., MA, Limerick City, Republic of Ireland, Humanistic & Integrative Psychotherapist

Maplewood Counseling New Jersey, Debra Feinberg, LCSW, Maplewood, NJ, Anxiety or Fears, Relationships, Parenting, Gay and Lesbian Issues, Multicultural Counseling

A Peaceful Balance, Jennifer Bois-Slattery, LCMHC, MLADC, ICAADC, Nashua, NH, trauma, gender identity counseling, substance abuse, adolescent issues, clinical supervision

Synchronicity Counseling & Wellness, Boise, ID, Kama Hiner, LPC, Nichole Jordan, LCPC, Denae Barowsky, LPC, Marci Danielson, LAMFT, Kristine Kirsch, LPC, Arlene Winkle, LMSW, We are a small group private practive with 6 counselors working with children through adults, anxiety, depression, trauma, custody, LGBT, parenting, EMDR, Sexual issues

Kim Wright LCSW, Kim Wright, LCSW LGBTQQI-friendly, eclectic approach, mostly works from a Cognitive Behavioral / Solution-Focused, aged 15+, who seek treatment to recover from Anxiety, Depression, Sexuality issues/disorders, Psychosis, and Relational/Couples therapy

Soul Tenders, Wendy Bencosme, PhD, Maureen Leigh, MFT, Carol Bennett, MFT, Brandon Guin, MFT, Jan Salvay, MFT, Arcadia, CA, Divorce & Support Group, Anxiety, Grief/Loss, Depression, EMDR, Somatic, Sexual Abuse, Trauma, Parenting, Domestic Violence, Anger Management, Dreams Group, Teens, Couples/Marital Therapy

Pam Dyson, MA, LPC, RPT, St. Louis, MO, Parent coaching, play therapy for children 3-12 years of age

Bruce Nystrom, PhD, Wichita Kansas, specializing in psychological assessment (clinical, forensic, employment, disability, medical) along with stress management, habit control (smoking, weight control, medication compliance), and sex offender treatment

Birmingham Counseling for Women and Girls, Sara Levitsky, LMSW, Birmingham, MI, women and girls of all ages, depression, anxiety, self esteem issues, relationship problems, school/peer issues, parenting support

Cathy Hanville, LCSW, Albany, CA, Trauma, PTSD, EMDR, anxiety, depression, and gender identity

Julie Fanning LCSW, West Dundee, IL, anxiety, mood disorder, early adults and midlife

Carrie Christiansen, LPC, Lenexa, KS, young adults and adolescents with concerns such as depression, anxiety, trauma, self-esteem, and relationship issues

Kelli Hyland, M.D., Salt Lake City, Utah, Whole-person, individualized, collaborative approach to medication management (& psychotherapy) for adults with depression, anxiety, bipolar disorder, schizophrenia, PTSD.

Segal Psychotherapy, LLC, MA, LAMFT, GLBTQ Friendly Therapist helping couples and individuals recover from infidelity, sex and porn addiction, and sexual abuse and sexual trauma.

Julie Jeske, MS, NCC – registered intern working toward my LPC,  Portland, OR, individual, couples and groups, sexuality, intimacy and relationships, women's Live Your Best Life Group

Jason A. Tompkins, LCSW, Tampa, Florida, survivors of suicide, couples, teenagers, Support Group for Adults with Asperger's Syndrome

Integrity Psych Heidi McKenzie, Psy.D, Monroeville, PA, clinical psychologist, anxiety disorders with adults

Miranda Palmer, LMFT, Modesto, CA,  Trauma Therapist doing specialty work with EMDR and other trauma treatment strategies

Lisa J. Johnson, LMFT, Albuquerque, NM, relationships, all forms of families; married, cohabitating, single parent, or blended families,  parents and friends of lesbians and gays and gay parents

Kelly Higdon, MFT, Laguna Hills, CA, women in divorce, anger issues, twenty and thirty something issues

Deborah Owens, Philadelphia, PA, adults and couples, specializing in marriage and couples counseling, anxiety, and recovery

AKCCOnline J. Kip Matthews, PhD, Athens, GA, Consulting, Mind-Body Health, Diversity Issues, Continuing Education Programming, Psycho-Educational Workshops, and College Student Mental Health

Joel D. Carnazzo, Psy.D., Chicago, IL, Substance Abuse, Depression, Anxiety, CBT, Motivational Interviewing

Good Medicine Healing Community, Kimberly O. Sieber, Ph.D., PLLC, Salt Lake City, UT, evidence-based psychological interventions and scientifically-validated spiritual practices aimed at facilitating mental, physical, and spiritual health, and treating chronic pain, medical and neurological conditions, anxiety, depression, bipolar, PTSD, and other stress-related illnesses

Terry Moore, LICSW Omaha, NE, hypnosis in psychotherapy, advanced training and experience in the behavior therapy to treat OCD

AZ Body-Mind Counseling Art Matthews, MA LPC, Mesa, Gilbert, Chandler, AZ, Stress, Anxiety, Panic, Depression, Grief/Loss, Divorce/Uncoupling Recovery, GLBT population

Seasons of Healing Counseling Services Cary Collins, MEd., LPC, Charlotte, NC, life transitions and those experiencing pain (physical/emotional/spiritual) find balance and well-being in mind/body/spirit.I also facilitate groups in SoulCollage(R)

Lucia Cassar Psychologist/Psychoanalist, teenagers, adults and elderly

A Peaceful Life Counseling Services Kat Mindenhall, LCSW, Lakewood, Colorado, cognitive Behavioral, solution focused, and mindfulness therapy for depression/anxiety, parenting, families and couples

Shari Cohn, LCSW, CSAT Madison, Wisconsin, Sex Therapy; Sexual Addiction & Compulsivity; Internet Porn & Cybersex Addiction; Partners, Spouses, Families of Sex Addicts; Survivors of Abuse, Assault, Trauma; PTSD; EMDR; Sexual Difficulties of Abuse, Trauma Survivors; Depression; Anxiety; Individual, Couples, Marriage Counseling

Jodie Gale MA Psychotherapy Northern Beaches, Sydney, Australia, eating disorders, addiction, infertility and alternative parenting paths, life crisis, relationships, anxiety and depression

Fran DiDomenicis, Ph.D. at East Bay Counseling Walnut Creek, CA, Mindfulness Based treatment for Depression, Anxiety, Addictions, and Chronic Pain; Marriage and Relationship Counseling

Jennifer Bois-Slattery, LCMHC,MLADC, ICAADC Nashua, NH, USA: Specialties, trauma, gender identity counseling, substance abuse, adolescent issues, clinical supervision

Dr. Ranjan Patel  brief-term counseling for rapid symptom reduction, and longer-term psychotherapy for deeper exploration, tailor-made treatment for your unique needs, specialties include: anxiety; depression; chronic pain/illness; mindfulness training, relationship issues–in individual and/or couples

Sharon Martin, LCSW San Jose, CA: specialize in mood disorders, anxiety, substance abuse, grief & loss, infertility & pregnancy loss, CBT

Tammy Fletcher, M.A., LMFT San Diego, CA: Medical issues: chronic pain/illness, new diagnosis, disability. Couples therapy, individual and family therapy, depression, anxiety, trauma. Fluent in American Sign Language – deaf and hard of hearing clients welcome

Melissa Wright, MA, LPC, RPT, Kansas City, MO Northland:  children ages 3 and up as well as adults and families who need services due to trauma, life transitions and mental health needs

Demyan Rossouw Cape Town, South Africa: Cognitive Behavioural Coaching & Facilitation, Gen-Y Coaching & Mentoring HIV Coaching, Creativity Coaching

Tanya L. Hilber, PsyD San Diego, CA: middle-age transitions for women and children with trauma, individual issues with a practical, psychodynamic approach that includes finding balance in life

DragonMuse Coaching & Facilitation Demyan Rossouw, Cape Town – South Africa: Cognitive Behavioural Coaching & Facilitation, Gen-Y Coaching & Mentoring, HIV Coaching, Creativity Coaching.

Metis Counseling Kansas City, MO Northland: Work with children ages 3 and up as well as adults and families who need services due to trauma, life transitions and mental health needs.

Rinske Goettsch MA, MBACP Counsellor, I see adults, elderly and couples for short and long term therapy. I specialise in relationship issues in a humanistic and creative way.

The Online Counselling Service Faith Moyo, Accredited Psychological Therapist, 24 Hour Online and Telephone Therapy. Access the worldwide service 7 days a week via secure Email, Instant Chat, VoIP, Webcam and Telephone.

Child's Play Services Andalusia, Alabama: Registered Play Therapist and National Certified Counselor. I specialize in child, adolescent, and family issues.

Erika T. Kendrick, LPC Montclair, NJ: specialize in depression, grief & loss, and domestic violence.

Regina Bright MS, LMHC Mary Esther, Florida: Individual, group, and family therapy for children and adults, developmental and emotional problems including depression, anxiety, stress, as well as unresolved issues resulting from childhood, delinquent and “at risk” adolescents and their families

Child, Parent & Family Institute Nitika T. Bey MSW, LSW, Pennsylvania and New York: Long Term and Short Term Solutions Focused Counseling (STSF)

Mind & Body Journal with Karen Gorrin Karen Gorrin, MA, LMHC Olive Tree Healing Arts Bellevue, Washington: Helping busy professionals find ease and wellbeing. Integrative Psychotherapy, Corporate Wellness, Mind and Body Workshops and Retreats.

Tracy Tucker, LCSW Arlington Heights, IL: My mission is to empower clients and assist them in achieving their personal goals for a healthy, successful life.

Ed Santana, MA, Psychotherapist, Toronto, Ontario: Psychotherapy, Counselling, and Therapy for Individuals and Couples.

Life Designs of Miami by Roberta Gallagher South Miami, Florida: My major focus is working with couples in crises due to betrayal i.e. infidelity: emotional, physical, online, phone.

Kate Elrod MS, LPC-S Austin, TX: Adults, Depression, Anxiety, Self Esteem, Past Abuse/Trauma, Life Transitions.

(Your info will go here...this list is ongoing to add your comment any time. Please summarize your services in one sentence instead of posting a comprehensive list. Thanks!)

Therapist Roll Call: Join The Private Practice Twitter List

I recently blogged about ways to use Twitter to build your private practice, and encouraged you to tweet your elevator speech/basic practice message in 140 characters or less. Those posts got me wondering, "How many therapists in private practice are actively using Twitter?" So, I'm taking a roll call to help you use Twitter to connect with other like-minded therapists around the world to share ideas, resources, and referrals. Only licensed mental health therapists will be listed.

Here's what I'd like you to do...

Post a comment below and include:

1. twitter handle & link
2. your city and state
3. specialty area

As the comments come in I'll post comments and paste your info in the body of this post below.

Therapists on Twitter

@julie_hanks Salt Lake City, UT: women's emotional health, EFT couples, family therapy, private practice consulting, media

@soultenders1 Arcadia, CA: marriage/couples, domestic violence, anger management, parenting

@soulhealr Studio City, CA: trauma, abuse, grief, loss, anxiety, stress, yoga therapy, teens and adults

@drtrentevans Baltimore, MD: anxiety, depression, anger management, bariatric surgery, cognitive/mindfulness

@metrocounsellor Perth Western Australia, Mount Lawley and Duncraig: Family,couples, teenagers, children and relationship counselling

@Grevgatan24 Stockholm, Sweden:, 6 psychotherapists, PDT, CBT, Affective Shortterm, individual/couples, systemic, crises/trauma

@juliejeske Portland, OR: relationships, intimacy and sexuality

@DrMarsha Washington DC: neuropsychology, and mindfulness

@LisaKiftTherapy Larkspur, Marin County, CA: Individual (family of origin, emotional health) and Couples (communication, infidelity, premarital education)

@JoelCarnazzo CBT, Motivational Interviewing, Family Systems Therapies, depressive disorders, anxiety and panic, & substance abuse

@SentierTherapy Couples & Family therapy, teens/adolescents, parent consultations, sexual abuse/assault

@Mindful4Health Milton, Ontario: depression, anxiety, stress, major life changes, chronic illness, Mindfulness-Based Cognitive Therapy

@jeffbrandler Mountain Lakes, NJ: addiction, couples, anxiety, mood disorders

@daryljo Trinidad & Tobago, West Indies: EAPs, Adults, Teens, Couples Counselling

@aposterioris Manhattan, NY: helping children and adults, as a disabled person I can also help those w/ disabilities

@emmakviglucci NYC: Self and Relationship Expert pre-marital, codependence and being stuck, infidelity

@DrRanjanPatel Burlingame, CA: Couples counseling, depression/anxiety, chronic illness/pain, grief/loss, mindfulness training

@DrTanyaHilber San Diego, CA: life balance, middle-aged women, children/teens with ADHD or Autism/Asperger’s spectrum

@pnetworker Psychotherapy Networker: Learning, Connection, Community for Psychotherapists Year-Round

@brucenystrom evaluation/therapy clinical, forensic, disability, ADHD, medical compliance, law enforcement, critical incident stress management

@marianneclyde Warrenton, VA: relationship issues, anxiety/depression, eating disorders, stress, trauma, Holistic approach

@geoffsteurer St. George, UT: pornography and sexual addiction recovery, affairs, marriage counseling, men's issues

@rhetter Plano, TX: Marriage and Family, latent adolescent/emerging adulthood, adolescent boys, spiritual issues

@drkkolmes San Francisco, CA: Anxiety, depression, relationships, sexual problems, working with LGBTQ, poly, kink

@TherapyWithJen Salt Lake City, UT:  Marriage and Family, anxiety, depression, parenting, communication skills, trust, LDS-based therapy

@cesargamez Phoenix, AZ: Eating disorders, Marriage/Family, Teens/Adults, Group Therapy

@johnleemsw Chattanooga, TN: individual & family therapist, children and adolescents, emotional intelligence

@josephab100 Mechanicsburg, PA: Online Relationship advice; online life and business coach.

@njpsychotherapy & @debrafeinberg Maplewood, NJ: Relationships, anxiety, gay & lesbian issues, multicultural issues, Internet Marketing consultant for therapists

@JaniceMaddoxMFT Reno, Nevada: couples and family counseling, individuals w/ anxiety, depression and adoption related issues

@Betrayalcoach, marriage and relationship counseling, psychotherapy for intimacy, trust,conflict, and issues of infidelity

@luciacassar Rio de Janeiro, Brazil: psychoanalytic psychotherapy. Teenagers, adults and elderly

@kamahiner Private Practice in Boise, ID: Individuals & Couples- Anxiety, Depression, Trauma, Sexual Issues/Addictions, Autism/Behavioral Consultations

@crutherfordphd psychological and neuropsychological assessement, test report writing software

@bbhabash Gaithersburg, MD: Individual & Family Therapy for children 3-12yrs, Child-Centered Play Therapy, Parents, Teens & Young Adults with various mental health disorders/life transitions

@pamdysonmalpc St. Louis, MO: Parent coaching, play therapy for children 3-12 years of age

@drkipmatthews Athens, GA: Sport and Performance Psychology, Consulting, Career & Life Planning, Mind-Body Health

@InfertilityMind @psych0synthesis Northern Beaches, Sydney, Australia: eating disorders and addiction, infertility and alternative parenting paths, anxiety and depression, life crisis and relationships

@KatMindenhall Lakewood, CO: CBT, SFBT – Parenting, depression, couple/family

@BCordermanMFT Brea, Orange County, CA: Empowering teen girls and women; pre-marital & couples counseling; family of origin work; co-dependency; trauma

@taoi_uk Merseyside, United Kingdom: A psychosexual and relationship therapist working with all kinds of sexual and relationship issues

@stlcounselor  Webster Groves, Mo: Marriage child and Family, couples counseling. expert child and teen counseling

@drjlgibson, Holland, Michigan psychologist specializing in adult psychotherapy for depression, anxiety, and relationship concerns.

@onlinecounselor London, UK: Accredited Psychological Therapist providing Online Counselling, Telephone Counselling & Face to Face Therapy.

@JasonEsswein I specialize in individual psychotherapy with men.

@fystherapy Kim McLaughlin, LMFT Licensed Marriage and Family Therapist in Roseville, CA: specializing in therapy and counseling for compulsive and binge eating disorders.

@DrReginaMendoza Licensed Psychologist in Miami, Florida. Psychological testing and individual therapy for children, adolescents, and adults.

@GregDorter Toronto, ON. Therapist specializing in helping people overcome depression, anxiety, stress & low self-esteem through CBT and mindfulness.

@DrCunninghamMFT  San Diego, CA, Family Systems expert specializing in couples and individuals challenged by relationship issues.

(I'll add your Twitter info here...)