The Relief Vet's Guide to Independent Contractor Taxes
W-2 vs 1099, estimated quarterly payments, what you can deduct, and how to prove your contractor status if the IRS asks. A practical tax guide written specifically for relief veterinarians.
Tax season for relief vets is different from tax season for employed associates. You don't get a neat W-2 with everything calculated. Instead, you get a stack of 1099s, a shoebox of receipts, and the nagging feeling that you're probably doing something wrong.
You're not alone. This guide covers the fundamentals every relief veterinarian needs to know about independent contractor taxes.
Employee vs. Independent Contractor: Why It Matters
The IRS cares deeply about whether you're an employee or an independent contractor. The classification determines:
Who pays your Social Security and Medicare taxes — employees split it 50/50 with their employer. Contractors pay the full 15.3% self-employment tax.
What you can deduct — employees get almost no deductions. Contractors can deduct business expenses.
How you file — employees get a W-2. Contractors get 1099s and file a Schedule C.
Most relief vets working through agencies like Roo are classified as independent contractors. But classification isn't automatic — it's based on the reality of your working relationship.
The Three IRS Tests
The IRS uses three categories to determine if you're truly an independent contractor:
Behavioral Control
Do you control how you do the work? As a relief vet, you should be making clinical decisions independently. The clinic can tell you what patients to see, but you decide how to treat them. If a clinic is dictating your clinical protocols, requiring you to follow their exact procedures, or telling you when to take breaks, that looks more like employment.
Financial Control
Do you have a significant investment in your business? Do you have unreimbursed business expenses? Can you make a profit or suffer a loss? Relief vets typically:
Use their own stethoscope, scrubs, and other equipment
Pay for their own CE, licensing, and insurance
Set their own rates (or negotiate them)
Can work for multiple clients
These factors support contractor status.
Relationship Type
Is there a written contract? Is the relationship expected to be permanent? Do you receive benefits like health insurance or retirement plans from the client?
Relief vets typically have short-term or per-shift engagements with no benefits — which supports contractor status.
The Danger Zone: Income Concentration
Here's where many relief vets get into trouble: working too much for one client.
If 80% of your income comes from a single agency or clinic, the IRS may argue you're a "disguised employee" regardless of what your contract says. There's no official percentage threshold, but the more concentrated your income, the riskier your position.
Diversification isn't just good business strategy — it's tax protection.
Quarterly Estimated Tax Payments
As a contractor, taxes aren't withheld from your pay. You're responsible for making estimated payments four times a year:
Quarter
Period
Due Date
Q1
Jan 1 – Mar 31
April 15
Q2
Apr 1 – May 31
June 15
Q3
Jun 1 – Aug 31
September 15
Q4
Sep 1 – Dec 31
January 15 (next year)
How much to pay: The safe harbor rule says you won't be penalized if you pay at least 100% of last year's tax liability (110% if your income exceeds $150,000). Most relief vets should set aside approximately 25-30% of their gross income for taxes.
Missing quarterly payments results in penalties and interest — even if you pay everything at tax time.
Top Deductions Relief Vets Miss
These are the deductions we see relief vets forget most often:
Mileage
The IRS standard mileage rate for 2026 is $0.70 per mile. For a relief vet driving 30,000 business miles per year, that's a $21,000 deduction. Track every mile — from your home to each clinic and back.
You can use either the standard mileage rate or actual expenses (gas, insurance, depreciation, maintenance), but not both. The standard rate is simpler and often more generous.
Continuing Education
CE courses, conferences, and workshops are fully deductible. This includes travel costs to attend conferences.
Licensing and Professional Fees
State veterinary license fees, DEA registration, AVMA membership, and specialty board dues are all deductible.
Professional Insurance
Malpractice insurance and general liability insurance premiums are deductible business expenses.
Health Insurance
Self-employed individuals can deduct 100% of their health insurance premiums on Line 16 of Schedule 1 — this is an "above the line" deduction that reduces your adjusted gross income.
Home Office
If you use a dedicated space in your home exclusively for business (scheduling, invoicing, record-keeping), you can deduct a proportional share of your rent/mortgage, utilities, and internet. The simplified method allows $5 per square foot, up to 300 square feet ($1,500 max).
Equipment and Supplies
Your stethoscope, scrubs, surgical instruments, and other equipment used exclusively for work are deductible. Items over $2,500 may need to be depreciated rather than deducted in full.
Meals
Business meals (meals while traveling to shifts, meals with colleagues discussing business) are 50% deductible. Keep receipts and note the business purpose.
Record-Keeping: What the IRS Expects
The IRS requires you to keep records that substantiate your deductions. For each expense, you should have:
Amount — the dollar amount
Date — when the expense occurred
Business purpose — why it's a business expense
Location — where (for travel and meals)
For mileage specifically, the IRS wants a contemporaneous log — meaning you record it at the time of travel, not reconstructed later from memory.
How long to keep records: Keep tax records for at least 3 years from the filing date. If you underreported income by more than 25%, the IRS has 6 years. Keep records of asset purchases (equipment, vehicles) for as long as you own them plus 3 years.
Your Pre-Tax-Season Checklist
Gather all 1099-NEC forms from agencies and clinics
Reconcile your mileage log against your shift calendar
Categorize all business expenses with receipts
Calculate your home office deduction if applicable
Review your quarterly payment history for any shortfalls
Check your income concentration across clients
Verify that your contractor agreements are current and signed
Compile your Audit Defense Log entries for the year
Calculate your total self-employment tax liability
Meet with a CPA who understands independent contractor issues
How ReliefBooks Helps
ReliefBooks automates the most painful parts of tax compliance for relief vets. The Audit Defense Log captures proof of your independent contractor status on every shift. The Income Diversity Speedometer warns you when you're too concentrated on one payer. And the Tax Health Monitor tells you exactly how much to set aside for quarterly payments based on your actual year-to-date earnings and expenses.
Tax compliance doesn't have to be stressful. With the right records, the right habits, and the right tools, you can file with confidence.
Kal Saad