S Corp vs. Sole Prop: Which Is Best for 1099 CRNAs?

If you’re a 1099 CRNA, you’re not just a healthcare professional—you’re also a business owner. And just like any business owner, the structure you choose for your work matters more than you might think.

Two of the most common options for independent CRNAs are operating as a Sole Proprietor or forming an S Corporation (S Corp). Each structure comes with its own benefits and trade-offs, and the right choice can make a big difference in how much you take home, how you file taxes, and how protected your personal assets are.

Let’s break it down.

What Is a Sole Proprietorship?

A sole proprietorship is the simplest way to operate. If you haven’t formed a separate legal entity and are simply receiving 1099 income under your personal name (or a DBA), you’re a sole proprietor by default.

Pros:

• Easiest and cheapest to start—no formal registration required in most states

• Straightforward tax filing (Schedule C on your personal return)

• No payroll setup or corporate paperwork

Cons:

• You pay self-employment taxes (15.3%) on all net income

• No legal distinction between you and your business—your personal assets could be at risk in a lawsuit

• Fewer opportunities for strategic tax savings

What Is an S Corporation?

An S Corporation is a tax election, not a type of business entity. Most CRNAs who go this route form an LLC and then elect to be taxed as an S Corp with the IRS. The key benefit? You can split your income into salary and distributions, potentially lowering your overall tax burden.

Pros:

• Significant self-employment tax savings (only your salary is subject to 15.3% payroll taxes; distributions are not)

• More professional credibility and separation of personal/business finances

• Potential for retirement plan and health benefit strategies

Cons:

• Requires formal entity setup (usually an LLC)

• Must run payroll and file extra tax forms (Form 1120-S, W-2s, etc.)

• Higher administrative costs and complexity

Which Is Best for 1099 CRNAs?

If you’re just starting out or only working part-time, a sole proprietorship might be sufficient—especially if your net income is under ~$50,000 per year. It’s easy, low cost, and simple to manage.

But once your income climbs above that mark, an S Corp can become a game-changer.

Let’s say you earn $200,000 a year as a 1099 CRNA. As a sole proprietor, you’re paying self-employment taxes on the full amount. As an S Corp, you might pay yourself a “reasonable salary” of $110,000 (subject to payroll taxes) and take the remaining $90,000 as a distribution—which avoids self-employment tax. That could mean $10,000+ in annual tax savings.

Of course, there are rules: the IRS expects your salary to be reasonable based on market rates. And the added complexity means most CRNAs benefit from having an advisor (like CBFC) handle the structure, payroll, and filings.

The Bottom Line

There’s no one-size-fits-all answer—but the right business structure can have a lasting impact on your bottom line and long-term success. At CBFC, we specialize in helping 1099 CRNAs choose and manage the best setup for their unique situation—whether that’s staying simple or going strategic.

Need help deciding between a Sole Prop or S Corp?
Contact our team for a free consultation and let’s find the right fit for your business.