Dentist offered 1099 vs. W2 in California - Is this legal? How to negotiate?

This is unfortunately really common in dental practices now, but you're right to question it. The IRS has pretty clear guidelines about employee classification, and generally speaking, most associate dentists working in someone else's practice should be W2 employees, not 1099 contractors. The key factors are: if they control when you work, where you work, provide the equipment, set the fees, and handle billing/collections, you're almost certainly an employee under IRS rules. The practice is likely trying to avoid paying their share of payroll taxes (7.65%) and providing benefits. For negotiation purposes, here's what you should consider asking for if they insist on 1099: - Additional 7.65% to cover the employer portion of FICA taxes you'll now pay - 10-15% more to account for benefits you're not receiving (health insurance, retirement, PTO) - Budget for professional liability insurance they're not covering - Compensation for administrative costs of filing quarterly estimated taxes You'd be wise to consult with a CPA who specializes in dental practices to help you negotiate and set up proper tax planning. This misclassification puts both you and the practice at risk with the IRS.

I went through exactly this when I started my dental career! After struggling to understand all the tax implications, I found this tool called taxr.ai (https://taxr.ai) that helped me figure out the real cost difference between 1099 and W2 for my specific situation. It analyzed both scenarios and showed me exactly how much more I needed to earn as a 1099 to break even with a W2 offer. The calculator factored in self-employment taxes, business deductions, and even helped me understand what business expenses I could legitimately write off as a 1099 contractor. The analysis showed I needed about 25-30% more compensation as a 1099 to match what I'd get as a W2 when considering taxes and benefits. I was able to show this breakdown to the practice owner during negotiations, which was super helpful instead of just throwing out a number.

I actually tried the taxr.ai tool that was mentioned after seeing the comment here, and wow - it was eye-opening. I was in a similar dentist classification situation in San Diego last year. The analysis showed me I was being underpaid by about $37,000 annually when factoring in all the additional 1099 costs! It broke down exactly how much the self-employment taxes were costing me, what benefits I was missing out on (valued them in actual dollars), and showed me which business deductions I could legitimately take. I used the detailed report in my negotiation and ended up getting a $28,000 raise to compensate. The practice still saved money compared to making me W2, but at least I wasn't getting completely shortchanged. The tool even helped me set up quarterly tax payments which I had no clue about before. Definitely worth checking out if you're facing this decision.

Have you considered filing an SS-8 form with the IRS? I went through this exact situation with a dental practice in San Francisco. When they refused to classify me correctly as W2, I tried contacting the IRS directly for help with worker classification. Spent WEEKS trying to get someone on the phone who could actually help. Eventually found Claimyr (https://claimyr.com) which got me connected to an actual human at the IRS within 45 minutes. Their system basically holds your place in the phone queue so you don't have to sit there listening to hold music for hours. There's a demo of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed I was being misclassified and walked me through the SS-8 process. Once I mentioned to my employer that I'd filed an SS-8, they miraculously "reconsidered" and offered me proper W2 employment. Funny how that works!

I was super skeptical about the Claimyr service mentioned above. As a dental hygienist, I've been misclassified as 1099 for years but was too intimidated to deal with the IRS directly. After putting it off for months, I finally tried it. I'm honestly shocked at how well it worked. Got connected to an IRS specialist in about 35 minutes (after previously spending HOURS on hold multiple times and giving up). The agent walked me through the exact requirements for dental professionals and confirmed I was 100% being misclassified. They explained all my options including the SS-8 form. I took this information to my practice owner with a professional, non-confrontational approach. Showed them the specific IRS guidelines for dental professionals. They admitted their accountant had advised them this was a "gray area" but agreed to transition me to W2 status after seeing the clear documentation. No bridges burned, and now I'm properly classified with benefits and employer-paid taxes. Wish I'd done this years ago instead of overpaying thousands in self-employment taxes!

Hey, I'm a dentist who's been through this exact situation. From a practical standpoint, here's what this means in dollars and cents: W2: Practice pays 7.65% of your FICA taxes, you pay 7.65% 1099: You pay ALL 15.3% of FICA taxes Plus as a W2 employee you typically get: - Health insurance (~$6,000-10,000/year) - Retirement contributions (~3-5% of salary) - Malpractice insurance (~$3,000-4,000/year) - PTO (~2 weeks = ~4% of annual pay) So altogether, that's roughly 25-30% in additional compensation you should negotiate if they insist on 1099. So if they're offering $120K as 1099, you should counter with at least $150-156K to make it equivalent to a W2 position at $120K. But more importantly - in California specifically, the threshold for proper classification is even stricter than federal standards because of AB5 and the ABC test. Dental associates almost never qualify as legitimate 1099 contractors under California law.

Just to add another perspective - I'm a dentist who actually prefers 1099 status, but ONLY because I work for multiple practices and truly operate as an independent contractor. The key differences: - I set my own schedule at multiple locations - I bring some of my own equipment - I have my own professional liability insurance - I have my own business entity (PLLC) - I have control over treatment planning If NONE of these apply to you (which sounds like the case), then you're definitely an employee and should be classified as W2. The practice can't just choose 1099 because it's convenient for them. And for what it's worth, even with legitimate 1099 status, I still negotiated a 27% higher rate than my W2 colleagues to account for the added expenses and taxes.

As someone who's navigated this exact situation, I'd strongly recommend getting everything in writing before making your decision. I've seen too many new dentists get burned by verbal promises about "we'll discuss benefits later" or "we can always switch to W2 down the road." If they're insisting on 1099 classification, ask them to provide written justification for why they believe you qualify as an independent contractor under both IRS and California ABC test standards. A legitimate practice should be able to explain this clearly. If they can't or won't, that's a red flag. Also, don't forget to factor in the cost of setting up quarterly estimated tax payments and potentially hiring a CPA. As a new dentist, you'll want professional help navigating the tax implications of 1099 status - this can easily add $2,000-3,000 annually to your expenses. One last thing - make sure any 1099 agreement clearly spells out what happens with patient records, non-compete clauses, and termination procedures. These details matter a lot more when you're classified as a contractor versus an employee.

Just wanted to add my experience as someone who recently went through this in Los Angeles. After reading all the great advice here, I ended up using a combination approach that worked really well. First, I did my homework using some of the tools mentioned (the taxr.ai calculator was helpful for getting specific numbers), then I scheduled a meeting with the practice owner. I went in with printed copies of the relevant IRS publications and California AB5 information that others mentioned here. I presented it as "I want to make sure we're both compliant with employment law" rather than "you're doing something wrong." Turns out their previous accountant had told them this was fine, but when I showed them the specific criteria for dental associates, they realized I clearly didn't meet the independent contractor requirements. They ended up offering me proper W2 classification with a starting salary that was actually $8K higher than their original 1099 offer - apparently once they did the math on payroll taxes vs. misclassification penalties, W2 made more sense for them too. The key was approaching it professionally with facts rather than accusations. Having specific documentation ready (thanks to everyone who shared those resources) made all the difference in the conversation.

This is such a valuable thread - thank you everyone for sharing your experiences and resources! As someone who's been helping new dentists navigate these classification issues for years, I wanted to add a few practical tips for the actual conversation: 1) Timing matters - have this discussion BEFORE you sign anything or start working. It's much harder to reclassify after you've already been working under 1099 status. 2) Bring a simple one-page summary of the key points rather than overwhelming them with full IRS publications. Highlight the specific factors that apply to your situation (they control your schedule, provide equipment, set fees, etc.). 3) If they seem genuinely confused about the rules, offer to give them time to consult with their employment attorney or CPA. Many practice owners inherited these arrangements from previous associates and never questioned them. 4) Document everything - send a follow-up email summarizing what was discussed and any agreements reached. This protects both parties. The misclassification issue is SO common in dentistry right now, but I'm seeing more practices make the switch to proper W2 classification as awareness grows. California's strict enforcement has definitely been a wake-up call for many employers. You're absolutely doing the right thing by addressing this upfront!

This thread has been incredibly educational! I'm actually a tax professional who works with dental practices, and I wanted to emphasize one crucial point that came up several times but bears repeating: California's AB5 law makes the classification requirements even stricter than federal guidelines. Under the ABC test, a worker can only be classified as an independent contractor if they meet ALL three criteria: A) Free from control and direction in performing work B) Performs work outside the usual course of the hiring entity's business C) Customarily engaged in an independently established trade/occupation For most associate dentists working in someone else's practice, criterion B is nearly impossible to meet - providing dental services IS the usual course of business for a dental practice. I've helped several practices through reclassification processes, and the penalties for misclassification in California can be substantial - not just back taxes, but penalties that can reach into tens of thousands of dollars. The EDD (Employment Development Department) has been actively auditing dental practices specifically for this issue. One resource I'd add to the excellent ones already mentioned: the California EDD has a specific determination process similar to the IRS SS-8, and they're often faster in responding. Having both federal and state determinations can strengthen your position significantly. Best of luck with your negotiation - you're absolutely taking the right approach by addressing this proactively!

This has been such an incredibly comprehensive discussion! As a recent dental school graduate myself (just finished last month), I can't thank everyone enough for sharing their experiences and resources. What really stands out to me is how common this misclassification issue seems to be across the dental industry, but also how many of you have successfully navigated it by approaching it professionally with documentation and facts. A few key takeaways I'm getting from this thread: - The California ABC test makes it even clearer that most associate dentists should be W2 employees - Having specific compensation numbers ready (that 25-30% increase for 1099) shows you've done your homework - Framing it as a compliance issue rather than an accusation makes for a much more productive conversation - Getting everything in writing is crucial I'm definitely going to use the approach several of you mentioned - coming prepared with the one-page summary of relevant factors, asking for written justification of their 1099 classification, and being ready to provide specific compensation adjustments if they insist on the contractor route. The tools and resources mentioned here (taxr.ai for compensation analysis, Claimyr for IRS contact, the various IRS publications) are going to be incredibly helpful. I feel so much more confident about having this conversation now that I understand both the legal requirements and practical negotiation strategies. For other new dentists who might be reading this - this thread is gold! Bookmark it and use these insights to protect yourselves from the start of your careers.