Ah, it’s that time of year again… tax season. Before you begin filing your travel nurse taxes, it’s important to understand how taxes work. As a travel nurse, you’ll be working in different states with different employers. This can make it hard to keep track of financial matters. Many travel nurses bring in a combination of taxable income and non-taxable income. So, which deductions are you allowed to make? Find out here!
An Overview of Travel Nurse Taxes
The tax code is complex and it can be difficult to keep up with the system, especially for those with travel jobs. Living in different locations and receiving varying stipends and reimbursements can get confusing, so we’re here to help. Here are a few things to remember when filing your travel nurse taxes. Please note that these are our best recommendations to help you throughout the process. However, we highly recommend working with a tax accountant in order to confirm that you are filing your taxes correctly.
The IRS requires that you have a “tax home” while travel nursing. A tax home refers to a permanent residence where you incur expenses while you’re working in another location. Keeping a tax home does involve paying a mortgage or rent, but it goes beyond paying bills. You must also have the address on your driver’s license, register to vote in that area, and use that location as your permanent mailing address. Once your tax home status is confirmed, additional expenses may be subject to tax deductions for travel nurses.
Housing & Food
Most agencies will provide housing or pay a stipend if you choose to find your own place to stay. In some cases, the stipend can be lower than the actual cost of rent. Also, a contract might require the lodging to be treated as a taxable wage, or call for a straight wage rate without reimbursement. If you have a tax home, housing costs for assignments can be deductible. This includes utilities.
A stipend is usually enough to cover both lodging and meals. It is not taxed, and the General Services Administration decides what the maximum daily stipend is by location. Again, if there are additional expenses, you are allowed to deduct them on your travel nurse taxes.
Once you start traveling, you can start recording your travel expenses. Any form of transportation counts, including airfare, car, train, or public transportation. When filing your travel nurse taxes, don’t forget to deduct any travel-related reimbursements that the agency is already giving you.
You can also include any expenses for traveling back home from an assignment. When calculating your deductible, use the 2019 Standard Mileage Rates provided by the IRS. Parking, tolls, maintenance, and other expenses are also subject to deduction.
5 Tax Tips for Travel Nurses
1. Work with a professional
Having a professional help you with filing your taxes is always a smart decision. This is especially true for those of you who are new to travel nursing. These specialists can help you figure out your expenses and deductions and ensure that you are following all laws and regulations.
2. Keep your receipts
This may seem annoying, but it’s the best way to keep track of your expenses. Whether you throw them in a box or organize them neatly, these receipts are very useful for reference. Of course, organized receipts will be easier to keep track of. However, not everyone has time for that. Having those slips somewhere is better than not keeping them at all.
3. Use an app
You should still keep your receipts, but tracking your expenses with an app can also be helpful. There are many different apps to choose from that will help you keep track of your spending. So, find the one that’s right for you and start getting your finances in order! Apps can be more effective than pencil and paper ledgers since you’ll always have the information with you on your phone.
4. File on time!
If this isn’t already a priority, it should be one. Schedule a day to file your travel nurse taxes yourself or meet with a professional. Tax Day for the 2019 tax year is April 15, 2020.
5. Remember professional expenses
Don’t forget that any expenses used for continued education and updating licenses are also subject to deduction. This can include tuition, supplies, books, organizational dues, malpractice insurance, and uniforms. Remember that these investments must be directly related to your profession. Don’t include any unrelated expenses!
Are there any tips for travel nurse taxes that we missed? Let us know in the comments below! You can also check out our travel nurse tax guide video here: