Locum Ledger | Q3 Estimated Taxes, SEP Deadline & More (September 2026)

By Locumpedia Editorial

2026-09-06

Locum Ledger is Locumpedia’s monthly column on the money side of locum tenens work: taxes, entity choice, retirement, insurance and per diem. It’s built with credentialed experts and anchored to primary sources, with commercial relationships disclosed. We explain the rules rather than giving advice.

When you’re paid on a 1099, the IRS doesn’t wait for April. It collects four times a year. The third installment is due September 15.

The Q3 Estimated Payment

The third-quarter 2026 payment is due September 15, 2026. It generally applies to locum physicians, APPs or clinicians with 1099 income who expect to owe at least $1,000 in tax after withholding and refundable credits. It covers what you earned June through August.

The quarters are uneven, which they are on purpose. April, June, September, then the following January. Nobody promised the calendar would be tidy.

Payments need to cover the safe harbor: the smaller of 90% of this year’s tax or 100% of last year’s. That second figure rises to 110% if your 2025 adjusted gross income topped $150,000. Most locums plan against last year’s number, since it’s already known while this year’s is still moving.

The underpayment penalty isn’t a flat fine. It works like interest on the shortfall, at a rate the IRS resets every quarter, so a late payment is worth less than the same payment on time.

Locum income arrives in lumps, a heavy month here, a light stretch there. The IRS accounts for that through the annualized income installment method, which sizes each payment to the quarter you earned it instead of four equal slices. It’s more paperwork at filing. For a physician whose summer looked nothing like the spring, it can be the difference between owing a penalty and not. Payment itself can go through Direct Pay or EFTPS, or by mail with a 1040-ES voucher.

October 15 & SEP Funding

October 15, 2026 is the extended filing deadline for 2025 returns. It matters only if you filed for an extension back in April. An extension moves the paperwork, not the payment. Any 2025 tax owed was still due in April, so a balance riding since then has been accruing interest the whole time.

October 15 is also a retirement deadline that slips past people. A SEP-IRA can be funded through the filing deadline including extensions. For an eligible filer whose extended 2025 return is due October 15, SEP contributions for 2025 can generally be made through that date. The 2025 ceiling is up to 25% of compensation, capped at $70,000, with a different effective rate for the self-employed.

The Solo 401(k) plays by its own timing rules, looser in some ways and stricter in others, and they’re worth reading closely rather than assuming they match the SEP.

The 2026 Mileage Rate

The 2026 mileage rate isn’t a single number this year: 72.5 cents a mile for January through June, then 76 cents from July 1 through December 31.

Mid-year changes are rare. The last were in 2011 and 2022. A log that assumes one 2026 rate will be wrong for half the year. Qualifying business miles driven from July through December are deductible at the higher rate.

The standard rate isn’t the only option. The IRS also allows the actual expense method, which tracks the real cost of operating the vehicle instead of a per-mile figure. The two methods suit different situations. The choice has knock-on effects in later years, so understand it before the first log entry, not after.

What Independent Locum Physicians & APPs Are Weighing This Month

S-Corp Structure

The White Coat Investor has argued for years that the S-corp election only pays for itself once profit clears the added payroll and admin cost by a comfortable margin. For many locums that point arrives later than the pitch suggests.

The catch that gets less airtime is reasonable compensation. An S-corp owner has to pay themselves a defensible salary before taking the rest as distributions. A lowball number is exactly what the IRS looks for. The entity is a tax tool, not a status symbol. The numbers decide.

Overlooked Deductions

Structure is only half of it. 1099 status can make certain business-related deductions available that generally aren’t available for unreimbursed expenses incurred as a W-2 employee.

The White Coat Investor’s 1099 planning guide covers several of them: the self-employed health insurance deduction, a home office that meets the exclusive-use test and the qualified business income deduction, which phases out for high earners in a specialty practice. None of these are exotic. They just require treating the work like the small business it is.

Retirement Accounts

Retirement is where the 1099 structure stops being a headache and starts being an advantage. Physician on FIRE returns again and again to the solo 401(k) as a vehicle that lets a self-employed physician shelter far more than a W-2 employee can. A SEP-IRA is the other common option for the same purpose.

The wrinkle worth knowing is that a solo 401(k) can reach the same ceiling at a lower income than a SEP, because it layers an employee deferral on top of the employer contribution. Both, though, live or die by the deadlines, which is the quiet reason October 15 carries weight beyond filing.

Multi-State Returns

The mechanics tangle the moment you cross state lines, which locums do constantly. The Doctor’s CPA publishes a multi-state filing guide for the physician who worked three states in a year, where the same dollar can be claimed by more than one of them.

Depending on the states involved, a nonresident return and a credit for taxes paid to another state may help prevent double taxation. It’s the least glamorous part of locum finance and the most likely to go wrong on a self-prepared return.

Benefits & Coverage

Taxes aren’t the whole ledger either. Locum Independence frames the W-2 to 1099 transition as a coordinated move across benefits, disability coverage, malpractice and insurance, the things an employer used to handle quietly that now land on the physician’s own desk.

The point they keep making is that real tax savings can still be swamped by a coverage gap nobody planned for. Better to sequence the pieces than tackle them the week a first assignment starts.

The Bigger Trade

Underneath all of it runs a theme common in physician writing at KevinMD, where the locum finance conversation is less about any single deduction and more about the trade the structure represents: more control over the calendar, in exchange for running the back office yourself.

The tax calendar is that back office. September 15 is this month’s entry in it.

Locum Ledger reports on the tax rules that affect independent physicians and APPs. It describes the rules; it doesn’t tell you what to do with them. This edition draws on reporting from independent publishers and from The Doctor’s CPA and Locum Independence, Locumpedia content contributors whose commercial relationships are disclosed. Locumpedia is editorially independent and free. No source pays for placement.