How to Start a Veterinary Relief Business Part 1

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STEP 1 (should only take 30 minutes):

Register for an employer identification number (EIN)

This is important even if you are not going to be an employer of anyone besides yourself. This is associated with your business and will be used for your business license and business bank accounts prevents your social security number from being accessible to all the practices you go to for your relief work

  • Use this number on your W-9 form that you give to clinics you work with to document the income paid
  • Use this number to set up your business bank account (step 2) and for your business license (step 4)

Use your EIN to fill out W-9 tax forms for each of your clients

In order to have the client file taxes on the money that they paid you, a federal form called a W-9 is used to keep track of non-full-time employees (1099/independent contractor status)

STEP 2 (1 hour):

Obtain a separate business checking account and associated credit card for all business related expenses - you can use the same bank as your personal accounts or not

  • Use the business card to pay for all meals purchased during your shifts: gas, uniforms, equipment (stethoscopes, dental tools, etc.) and keep receipts for tax write-offs/business expenses

  • Use the associated business credit card to pay for all taxes, memberships, health insurance costs, CE and insurances needed to work as a relief practitioner (also tax deductible)

  • Deposit all relief work income into the business checking account and take either a regular salary and/or a “draw” from that account to your personal account to pay yourself

    • You will have to plan on paying yourself a salary within reason for your profession from the business account which is subject to income taxes (but ideally would be low-normal for the trade to spare yourself that)
    • You as the owner can also take out any of the equity that you have earned that is called a "draw" that is not taxed the same way as normal income for your personal use as well
    • Make sure to keep enough money in your business checking account to pay the business credit card and any other expenses you accrue
  • Keeping the business money separate from your personal account ensures you can keep your tax bill much lower than otherwise and still grows your net worth

  • You will need this business checking account to set up payment portals (if you want to take online payments) or receive checks

    • Sound Vet Med can help simplify things by helping you integrate a Stripe payments dashboard into your web presence to take digital payments and organize your invoices (including those that are paid and still need to be paid)
    • Keeping a separate business bank account also helps support your 1099 status in the event of a tax audit

Continue reading this series.