1099 vs W2 therapist Tennessee: What changes (and what doesn’t)

If you’re comparing offers for 1099 vs W2 therapist Tennessee roles, you’re not just choosing a paycheck format. You’re choosing a work structure: who controls the schedule, what support exists behind the scenes, and what you’re responsible for outside the therapy hour.

In this article, you’ll learn:

• What 1099 vs W2 usually means in therapy settings

• How misclassification happens and what red flags look like

• The biggest money differences to compare (without tax advice)

• Questions to ask before you say yes

• Who tends to thrive in each structure

Why this question matters for therapists in Tennessee

The same clinical work, very different job structures

Whether you’re providing in-person sessions or working as a telehealth therapist in Tennessee, the clinical work can look similar: intakes, treatment planning, progress notes, ethical decision-making, continuing education.

What changes is the container around the clinical work.

For example, two roles might both offer a 60/40 split or a flat rate per session. But one role may also include billing support, a steady referral stream, and paid time off. The other might require you to cover your own tools, taxes, and marketing.

How misclassification happens (and why you should care)

Misclassification is when a worker is treated like an independent contractor on paper while being managed like an employee in practice.

In general, worker classification depends on the degree of control and independence in the relationship. The IRS describes three broad evidence categories: behavioral control, financial control, and the relationship of the parties.[1][2]

Misclassification can matter because employees may be entitled to protections like minimum wage and overtime under federal wage and hour law, and misclassification can shift tax and administrative burdens onto the worker.[3][4]

What “1099 independent contractor” usually means in therapy

Control, autonomy, and what you can say “no” to

A true independent contractor therapist role typically involves more control over how you deliver services and when you work.

Common examples of contractor-style autonomy include:

• Setting (or negotiating) your availability

• Choosing your caseload size and niche focus

• Declining referrals that aren’t a fit

• Using your preferred clinical approach (within ethical and legal standards)

That said, most practices will still have some non-negotiables (HIPAA compliance, documentation timelines, informed consent processes, crisis procedures). These can exist in either structure.

Expenses you might be responsible for

With many 1099 therapist jobs in Tennessee, you may be responsible for business expenses that are often covered in W2 roles.

Depending on the setting, that can include:

• Liability insurance

• Continuing education and licensure costs

• EHR, telehealth platform, or assessment tools

• Office space, supplies, or a portion of overhead

• Marketing (if referrals aren’t provided)

This is why “higher per-session pay” can look different once you account for what you’re funding out of pocket.

What “support” can still look like in a 1099 setup

A contractor role doesn’t automatically mean “you’re on your own.” Some practices run a platform or infrastructure model where clinicians keep autonomy while the practice provides systems and support.

Support can look like:

• Centralized billing and claims follow-up

• An EHR with templates and clear documentation expectations

• Referral coordination and matching

• Consultation opportunities and peer connection

If you’re evaluating a role like this, the key question is: What is truly optional vs required, and who owns the workflow?

(

If you’re curious about how our services are structured, you can explore our approach to specialized therapy programs and groups.)

What a W2 role usually includes (and the tradeoffs)

Benefits, protections, and predictability

A W2 therapist job is an employee role. Typically, the practice withholds federal payroll taxes from each paycheck, and the practice may offer benefits such as health insurance, paid time off, or retirement contributions (benefits vary widely by employer).

W2 roles can also offer predictability:

• Set pay periods

• Clear policies for time off and coverage

• Defined job expectations and supervision structures

How productivity expectations show up (caseload minimums, quotas)

Many W2 roles come with productivity metrics. This might look like:

• A weekly minimum of billable hours

• Caseload targets

• Documentation timelines tied to billing

Productivity expectations aren’t automatically “bad.” They can help a practice stay financially stable and keep access open for clients. But it’s important to understand how expectations impact your day-to-day quality of life.

Biggest money differences in 1099 vs W2 therapist Tennessee roles (without doing tax advice)

Gross pay vs take-home pay: what to compare

When comparing offers, avoid comparing only the headline rate.

Instead, compare:

• Expected weekly sessions (realistic, not best-case)

• No-show and cancellation policy (and whether you’re paid)

• Who pays processing fees (billing, credit card, platform fees)

• Your out-of-pocket costs (software, insurance, office, CE)

• Benefits value (health coverage, PTO, retirement match)

Practical example:

• Offer A: higher per-session rate, but you cover tools and downtime.

• Offer B: lower rate, but includes steady referrals, billing support, and paid time off.

Either can be the better deal depending on your goals and season of life.

Estimated taxes basics and what “setting aside” means

With many 1099 setups, there is no automatic withholding, so clinicians often plan for taxes by making estimated payments and setting aside part of each payment they receive.

The IRS describes estimated tax as the method used to pay tax on income not subject to withholding, and Form 1040-ES is used to calculate and pay it.[5][6]

Tennessee does not have state income tax withholding on earned income, which can simplify state withholding comparisons, but it does not eliminate federal responsibilities.[7]

Important: This is general information, not tax advice. A qualified tax professional can help you estimate your specific set-aside and payment approach.

A simple comparison checklist you can use

Use this quick checklist to compare a benefits vs pay split decision more clearly:

✅ Role structure

• Am I paid W2 or 1099?

• Who sets the schedule and caseload expectations?

✅ Support and workflow

• Who does billing and claims follow-up?

• Who handles intakes, referrals, and scheduling?

✅ Compensation reality

• What is the realistic weekly session range?

• Are there guarantees, minimums, or waitlist policies?

✅ Costs

• What expenses will I pay directly?

• What tools/platforms are included?

✅ Fit

• Does this role match my current capacity and long-term goals?

Questions to ask any practice before you say yes

Schedule control and clinical autonomy

Ask:

• How far in advance do I set my availability?

• Can I limit certain referral types or client ages?

• How are treatment approaches supported (consultation, training access)?

Admin support, billing, and documentation expectations

Ask:

• Who submits claims and follows up on denials?

• What documentation timelines are required?

• What happens if notes are late or a claim is denied?

This is also a good time to learn how the practice handles boundaries, crisis coverage, and coordination of care.

(If you want a feel for how we think about care quality and process, you can browse our psychological assessment options and mental health screening resources.)

Marketing support and referral flow realities

Ask:

• Where do referrals come from?

• Is there a waitlist, and how is it managed?

• What happens during slow seasons?

Who tends to thrive in 1099 vs W2

If you’re a self-starter building your caseload

You may thrive in a contractor model if you:

• Enjoy business ownership energy (systems, tracking, planning)

• Want flexibility and autonomy

• Are comfortable with variable income

Misconception to watch: “1099 always means more money.” Sometimes it does. Sometimes the extra responsibilities cancel out the higher rate.

If you want stability and benefits first

You may thrive in a W2 model if you:

• Prefer predictable pay periods

• Want benefits to be part of compensation

• Like clear performance expectations

Misconception to watch: “W2 means no autonomy.” Many W2 roles still offer meaningful clinical independence and collaborative culture.

If you’re transitioning from agency burnout

Burnout recovery often starts with a structure that protects your nervous system.

You might prioritize:

• A manageable caseload

• Strong admin support

• Clear boundaries around after-hours work

Misconception to watch: “Any private practice role will feel lighter.” The structure matters more than the label.

If you want a Tennessee-based 1099 role with support

The “platform” model: autonomy plus real infrastructure

Some clinicians want contractor-level flexibility without rebuilding everything alone.

In a platform-style setup, you may be able to:

• Keep control over your schedule and caseload

• Focus on clinical work while billing systems and referral coordination are handled centrally

• Stay connected to a professional community

If you want to get to know our work, you can start with Meet Us and our executive function coaching services to see the kind of care we provide.

Contact us to learn more: scienceworkshealth.com/careers

About ScienceWorks Behavioral Healthcare

ScienceWorks was founded by Dr. Kiesa Kelly is a clinical psychologist and neuropsychologist by training at ScienceWorks Behavioral Healthcare. She earned her PhD in Clinical Psychology with a concentration in Neuropsychology from Rosalind Franklin University of Medicine and Science, and completed doctoral and postdoctoral training at institutions including the University of Chicago, the University of Wisconsin, the University of Florida, and Vanderbilt University.

Her background includes 20+ years of experience with psychological assessment, with postdoctoral training focused on ADHD. She provides care via telehealth in Tennessee and many other states.

References

1. Internal Revenue Service. Topic no. 762, Independent contractor vs. employee. IRS. Updated 2025 Sep 5. Available from: https://www.irs.gov/taxtopics/tc762

2. Internal Revenue Service. Independent contractor (self-employed) or employee? IRS. Available from: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

3. U.S. Department of Labor, Wage and Hour Division. Fact Sheet #13: Employment Relationship Under the Fair Labor Standards Act (FLSA). Available from: https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship

4. U.S. Department of Labor, Wage and Hour Division. Final Rule: Employee or Independent Contractor Classification Under the FLSA. Available from: https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking

5. Internal Revenue Service. About Form 1040-ES, Estimated Tax for Individuals. IRS. Available from: https://www.irs.gov/forms-pubs/about-form-1040-es

6. Internal Revenue Service. Estimated taxes. IRS. Available from: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

7. Tennessee Department of Revenue. GEN-34 – Income Tax Withholding. Updated 2024 Aug 13. Available from: https://revenue.support.tn.gov/hc/en-us/articles/360057595051-GEN-34-Income-Tax-Withholding

Disclaimer

This article is for informational purposes only and is not tax or legal advice. For guidance tailored to your situation, consult a qualified tax professional and/or employment attorney.