Transcript from The Financial Cocktail · Episode 11 · Leland Murren, CRNA
How one 1099 CRNA turned three Midwestern states, 260 workdays, and a simple S-corp into a top-1% income, and what the W-2 version of the same year would have looked like.
I first published this locum CRNA income case study on the blog on May 12th. This version, adapted from Episode 11 of the podcast, comes with a few extras: a full 1099 vs. W-2 comparison, plus answers to the questions that landed in my inbox after the original post went live.
One CRNA was generous enough to share their income as a case study in how CRNAs can break the financial norm. They will remain anonymous, and the numbers have been rounded for ease of reading. I will do my best to keep this short.
1. The Setup
• A locum CRNA who worked in three different Midwestern states throughout 2025.
• Works through an LLC taxed as an S-corp.
• A spouse employed by the LLC, so two total employees.
2. The Gross: $775,000
This is where things go above and beyond. $775,000 in gross income from anesthesia.
For context, the AANA 2026 Compensation and Benefits Survey came out just a couple of weeks before this episode was recorded. To the best of my understanding, the survey tops out at $600,000, so a CRNA reporting $775,000 would have fallen outside its range. That is one area I would love to see explored further: the far tail of the distribution on the high end, especially among 1099s and locums. We are trimming off quite a few providers who put in big-time hours in high-need areas. The median is likely still fairly accurate, but the true high end of the profession is missing from the picture.
3. The Schedule
• 260 days worked in 2025, which is roughly a standard working year (about 255 days once federal holidays are accounted for).
• A standard 40-hour week for 47 weeks, on contracts that mixed 5×8s and 4×10s.
• 17 weekends of call from home, or roughly every third weekend.
• An estimated 100 to 125 nights of generally light call, weekends included. That is about a third of the year on call: a third of weeknights and a third of weekends.
This was a full-time year with real call, but it was not a 300-day grind.
4. The Business Expenses: $325,000
The contracts were a mix of all-inclusive rates, paid travel and lodging, and some hospital-supplied housing. The LLC reported about $325,000 in expenses:
LLC Expense
Amount
Employee salaries (CRNA and spouse)
$200,000
Employer Solo 401(k) contributions
$50,000
Other expenses: housing, travel, health insurance premiums, meals, malpractice, licensure
$75,000
Total expenses
$325,000
After $775,000 in gross income and $325,000 in expenses, the LLC shows $450,000 remaining, which passes through to the CRNA personally. That money came out as quarterly distributions, which is pretty straightforward for an S-corp setup.
5. The Mechanics
The CRNA runs monthly payroll for themselves and their spouse, with taxes withheld from each paycheck like any other W-2 job. Every quarter, the CRNA makes estimated federal and state tax payments and then takes a distribution. Quarterly payments, quarterly distributions.
On the personal return, that $450,000 of pass-through income is joined by $150,000 in W-2 income (after their Solo 401(k) contributions), bringing total income to $600,000.
On the investing side, the household uses a mix of traditional and Roth dollars across:
• Two Solo 401(k)s (one for each spouse)
• Two IRAs
• A family Health Savings Account
Add the $30,000 standard deduction, and that is about where the deductions end. This CRNA was clear: no itemizing.
6. A Word on Deductions and "Loopholes"
There is so much hype around deductions and tax credits, and at this income level they simply do not help much. They just do not apply. At this income, you are past the phase-out for the QBI deduction (CRNAs fall under the specified service trade or business rules). You are past the child tax credit income limits. A lot of the commonly discussed deductions and "loopholes" (I hate that term) are simply not available when you earn this kind of money.
So the conversation shifts to a different question: do you spend a dollar to save 40 cents? There are a lot of variables in that answer, and it is a conversation for another day. Just know that once you are earning in this range, many of the deductions you hear about on the Facebook pages are off the table.
7. The Taxes: $175,000
Now for everyone's favorite part of making money: the taxes.
Household income is adjusted for traditional tax-advantaged contributions and the standard deduction. The CRNA had a bit of income outside anesthesia, but it was negligible next to the $775,000 brought in by the LLC, so I set aside capital gains and focused on the ballpark. We did not pore over the full return; we sat down and ran through the deal. Here it is:
Tax
Amount
Effective Rate*
State income tax (three states)
$35,000
5.83%
Federal income tax
$140,000
23.33%
Total tax bill
$175,000
29.17%
*Calculated on $600,000 of income after business expenses.
State taxes are owed where the money is earned, and all three states had different rates. If I am not mistaken, average state taxation runs right around 5% nationally, so the 5.83% makes sense. The federal share is about where you would expect it at this income.
Bonus: the $50,000 in employer Solo 401(k) contributions for the CRNA and spouse is a business expense that counts against income, and because it went into traditional accounts, no one pays tax on it yet. That money never shows up as taxable income this year.
The Financial Cocktail Overlay
Step back and look at the whole picture. The CRNA earned $775,000, spent $75,000 on overhead, and paid about $175,000 in taxes. That leaves $525,000 to live, invest, play, donate, and enjoy. All the things.
Put it this way. Invest $225,000 a year, and you still have $300,000 a year to live on. Most cities allow a very solid quality of life on $300,000 annually. You are going to live like a baller.
• Investing $225,000 a year wipes out your student loans, likely makes you a millionaire within five years, and a multi-millionaire within ten.
• A $25,000 monthly living allowance can support a million-dollar-plus home, a lake cabin, and new vehicles for you and your spouse.
Build these ratios to fit your own goals. Plug and play.
What this case study does not show is the unrealized gains on the CRNA's existing investments. Those do not appear as income, but a multiple-six-figure unrealized gain amplifies wealth building quietly in the background.
If you want to turbocharge your financial situation and shave years, if not decades, off your retirement timeline, consider this path, even if only for a couple of years.
This Is Not a Hidden Gem
This is an amazing income, not just for a CRNA but for anyone. It sits well inside the top 1% of earners in the United States, and it is a blessing to have this kind of earning potential as a locum CRNA.
But these contracts are out there. I was working in the Midwest when I wrote the original post, I am still in the Midwest, and this is repeatable. The need for CRNAs is strong. There is geographic arbitrage. Many facilities want you to take call or work 12-hour shifts, and overtime at 1.25x to 1.5x adds up fast.
A few years back, someone asked me how to get ahead financially. I boiled it down to three numbers:
Four. Three. Two. Four years. Three million dollars earned. A million in taxes. Two million in your bank account.
That is a fast track to financial independence.
Back-of-the-Napkin: The W-2 Version
I could end it there, but hear me out. This is where the W-2 enters the mix, because that is what everybody wants to know: how does 1099 convert to W-2?
Assume the same CRNA had a W-2 equivalent of the same $775,000, with a state income tax of about 5%.
• First, income drops to $700,000, because a W-2 role would not cover travel and lodging. Yes, you might negotiate a stipend, but more than likely the $75,000 this CRNA spent on overhead would not be coming to you.
• Second, to make things equal, salary becomes $650,000 with $50,000 of benefits.
The monthly picture looks like this:
W-2 Monthly Profile
Amount
Gross earnings
$54,166
Tax bill
$22,476
Net monthly income
$31,690
W-2 status brings an annual tax bill of roughly $270,000, an effective rate of about 41.5% on that $650,000 salary. Compare that with the 29.17% effective rate on the 1099 side, where the Solo 401(k) dollars were not even counted as income. That 1099 arrangement might be worth the expenses and the hassle of contracting.
Factor in tax-advantaged accounts and the standard deduction, and the W-2 provider's taxable income lands around $590,000, reducing the tax bill from about $270,000 to about $240,000.
The Real Lesson
None of this calls for a 1099 course on deducting your cell phone or using the Augusta rule. It calls for a macro finance play:
• How to increase your income
• How to get into the locum game
• How to increase your investable dollars and grow your net worth
• The decision to chase the dollars for a while, and what to do with those dollars when they show up
It is not about reducing your tax rate by 10%. It is about putting the net income that shows up to work.
A Note on Perspective
This CRNA was not bragging. They were simply kind enough to share their situation and bring a little transparency to what it looks like to work hard as a Midwest locum for a while.
Working this much is not for everyone. This CRNA is not telling anyone to repeat it, and they are not looking down on people who are not 1099, or on people who earn less (and yes, I know there are folks who earn more). Some people like money and the lifestyle a high income provides, and there is nothing wrong with that. Some people prefer time off. Nothing here says anyone who earns less is inferior. It is simply how one CRNA runs their business. A 26-week work year might just be a future case study.
Your Questions, Answered
After the original blog post went live, a few questions came in.
"What was the hourly rate?"
When people hear three-quarters of a million dollars, they assume someone is billing $400 or $500 an hour. Not so. The base rate was $235 to $275 per hour, with overtime at 1.25x to 1.5x. I did not ask for the rate on each contract or exactly how many contracts there were. Just three states and a handful of contracts. Those are 2025 numbers, and in 2026 I am seeing rates like that across many parts of the country. Very doable in the locum arena.
"With $775,000 in gross income, how is a $150,000 salary reasonable?"
This is a discussion for your CPA. I am a gas man, not a CPA or an attorney. Here is the general framework as I understand it:
• Median wage data is published online and can be filtered by state, county, and area. That is your ballpark. Reasonable compensation really comes into play if the IRS audits you.
• These 1099 positions often carry loaded benefits, which raises total compensation. As my CPA explained it, a 25% Solo 401(k) employer contribution and other benefits make a $150,000 salary worth a good deal more than $150,000. That was this CRNA's justification.
• A 1099 CRNA does not have to pay themselves the median W-2 CRNA salary.
• The IRS wants a higher salary because wages are subject to payroll (FICA) taxes of 15.3% up to the Social Security wage base. Distributions are not. That is why some CRNAs are tempted to set an $80,000 salary, and in theory a $1 salary would be the most tax-advantaged. That will not hold up in an audit.
• The salary is also based on a 40-hour week, with a few of those hours being admin work. At $150,000, that is roughly $75 an hour. If a few admin hours are valued at about $25 an hour, the remaining 35 or so clinical hours rise to roughly $80 to $85 an hour, inching toward what W-2 roles pay.
Again: ask your CPA.
"Why count salary and the Solo 401(k) as part of the $325,000 in expenses?"
Because they are business expenses. The major hospital systems in your area that employ CRNAs record salaries and benefits as expenses, too. Yes, this is essentially a one-CRNA business with a spouse who likely helps with the books, but salary and retirement contributions are still expenses. It comes down to how pass-through taxation works.
"Who actually spends $300,000 a year to live?"
In high-cost areas like California or New York, it is definitely not out of the question. You will be surrounded by people with similar incomes, and $300,000 will not buy the most extravagant place around.
When I first started researching the FIRE movement, I came across a man who retired early in Los Angeles with a couple million dollars. His annual cost of living was $350,000 to $400,000. He eventually came out of early retirement; with four kids in LA, the math caught up with him. Spending at that level is out there.
In a less expensive area, it adds up quickly through second homes, lake houses, planes, trains, and automobiles. A couple driving a quarter-million dollars in vehicles, cars for the kids, and college funds is not unreasonable. If you can earn it, you can spend it.
Everyone lives to a different standard. This CRNA could live on far more, or on far less, perhaps $100,000 to $150,000 a year. I did not ask. The $300,000 figure is just a hypothetical showing that a top-tier income can support a top-tier lifestyle (way more than I live on) while still leaving plenty for investments, rainy-day funds, generosity, and giving.
Final bit
• A locum CRNA grossed $775,000 working a fairly standard 260-day year with moderate call across three states.
• After $325,000 in business expenses (including $200,000 in salaries and $50,000 in Solo 401(k) contributions), $600,000 reached the personal return.
• A $175,000 total tax bill put the effective rate near 29%, versus roughly 41.5% in a comparable W-2 scenario.
• At this income, most of the deductions and "loopholes" you hear about simply do not apply. The real lever is income, and what you do with it.
• Four years, three million earned, a million in taxes, two million in the bank: a fast track to financial independence for those willing to chase it for a season.
Next time, we dig into S-corp structure for CRNAs: what I use, what I have learned from conversations with my CPA, and what my own research has turned up. It is one of the most frequently asked questions on the CRNA community pages.
If this case study helped you, share it with a coworker who could use it. Subscribe to The Financial Cocktail wherever you get your podcasts, and follow us on Facebook. Until next time, thanks for reading.
This content is for educational purposes only and is not tax, legal, or financial advice. The author is a CRNA, not a CPA, attorney, or financial advisor. Figures are rounded and approximate. Consult a qualified professional about your own situation.
