Walking In Your Shoes-Moonlighting Part 3-PA Set Up

by John Stillson MD

Laying The Groundwork For Moonlighting

I've spent some time in my prior posts discussing some of the moonlighting opportunities that I have taken advantage of so far since getting my medical license. However, I think it's important to now look backward at the groundwork I laid before landing those shifts. Knowing that I was going to get my license and start moonlighting this fall I met with a reputable attorney who understands doctors. This was to start the process of creating a professional business entity under which I could operate my moonlighting business. This seems like a simple step, yet most people won't do it. The upfront cost is expensive as it cost me nearly $5000 in legal fees to create my entity. However, in just a short time this business entity will pay for itself, and not only that it sets the groundwork for my future as an attending physician.

It turns out that in Texas a professional micro-corporation is called a Professional Association (PA)—every state has their unique terminology that use for professional micro-corporations—so don’t get confused by this. That is just another reason to hire an attorney familiar with doctors to help you with this process.

Start Right Away

It is important to note that you cannot create one of these professional business entities unless you have an independent license to operate in your state. I received my license on a Friday and by Monday morning I was starting the process of creating my organization. Why is this important? This allows me to sign moonlighting agreements through my business entity and take advantage of the tax benefits that small businesses are afforded in the United States. I can write off my expenses, give myself a salary, rent out my home for meetings, employ my spouse, and create retirement accounts if desired, among other things. The great thing about these entities is that they are easily portable to other states in case you change your residence at any time. Knowing that my wife and I will likely not stay in Texas for the rest of our career this was important to me.

Unfortunately, as a resident moonlighting within my organization, they require that I be paid through their employer-employee model with my residency contract. However, external entities do not have this requirement, so I've done on-boarding with multiple organizations including the emergency department outside my residency where they have hired me through my professional business entity to provide services.

Grow Your Business Skills During Residency

Residency provides opportunities for extensive learning and growth that will set the foundation for your future practice. This does not have to be limited to medical knowledge and learning. By setting up a professional organization in residency you start to get experience managing a business and the associated finances. You can then expand on these skills as you move forward into your higher earning years as an attending. One of the analogies that I have heard is that creating this entity in residency is equivalent to buying the piece of land in your ideal location where you plan to build your dream house later in the future. That early simple decision lays the groundwork for you to achieve your long-term dreams.

This is Tod, if you are a resident or fellow I encourage you to download my free e-book “20 Reasons Every Resident Should Form a Micro-Corporation”

I also invite you to join our SimpliMD community as a member for the same cost as a couple cups of coffees—only $10. It will unlock $2500 in products at our site.

Lastly, if you know that you want to start micro-corporation for your moonlighting dollars or side hustles, reach out to me here and for a mere $250 I’ll give you $7500 in products and connect you with an attorney will help you create your micro-corporation.