1099 vs W2 for Nurse in New Jersey: 2026 Tax Guide

How Nurses in New Jersey Choose Between W2 and 1099

If you are a nurse working in New Jersey, you might be offered two very different ways to get paid. One is a standard salary with benefits (W2), and the other is a project-based rate (1099). In 2026, the tax landscape for nurses has changed slightly, making it even more important to run the numbers before signing a contract.

Historically, nurses in New Jersey have seen a push toward self-employment due to the flexibility it provides. However, that flexibility comes with the burden of self-employment tax and the cost of your own benefits.

Example: $100,000 Annual Income Comparison

Factor	W2 Nurse	1099 Nurse
Gross Salary/Fees	$100,000	$100,000
Employment Tax	-$7,650	-$14,130
Federal Tax	-$13,614	-$7,971
State Tax (New Jersey)	-$4,250	-$3,897
Estimated Take Home	$74,486	$74,003

Specific Deductions for a Nurse

As a 1099 nurse, you can deduct industry-specific expenses that a W2 employee cannot. This might include:

• Specialized software and subscriptions
• Continuing education and certifications
• Equipment and tech hardware
• Client entertainment and business meals (usually 50% deductible)

FAQ for Nurses

Should I form an LLC in New Jersey?

Many nurses form an LLC for liability protection. However, an LLC by itself doesn't change your taxes unless you elect S-Corp status, which can save you on SE taxes if your income is high enough.

Can I deduct my New Jersey home office?

Yes, if the space is used 100% exclusively for your nurse business. You can use the simplified deduction ($5/sqft) or actual costs.

How do I handle New Jersey health insurance?

1099 nurses must buy their own insurance via the marketplace or private brokers. The good news is those premiums are usually tax-deductible.