What’s that old, but famous, saying? “In this world, nothing can be said to be certain, except death and taxes.”
Well, unfortunately travel nurses can see the country and escape the monotony of full-time employment, but they cannot escape paying taxes. To make matters worse, travel nurse taxes are probably the most challenging and disliked part about travel nursing. Taxes and travel nursing can be very complicated, so it’s best to consult an accountant for assistance. Although your recruiter will most likely give you direction when it comes to taxes, they probably only know very basic information that may not apply to your scenario. Instead, it’s important to do your own research and be sure that you are doing everything correctly. Here are some basic steps for filing taxes as a travel nurse.
Tips for Travel Nurse Taxes
- Establish your tax home
When establishing your tax home, you have to think of home in a different context than you do traditionally, according to Joseph Smith, president and founder of South Carolina-based TravelTax, LCC. For example, your tax home isn’t necessarily where you have your legal ties and keep all of your things. Your tax home is more like a money home – it’s the place where you regularly earn income. Now, you’re probably thinking – if I’m traveling all the time, how does that work? Well, there are things you can do so that you are certain you know where your tax home is.
- Keeping a tax home
In order to have a tax home you must meet at least two out of these three requirements:
- Perform part of your duties at home
- Have a permanent, physical residence in the area in which you incur significant expenses for
- Don’t abandon your tax home, meaning you spend at least 30 days a year there
- Know what items you can write off
If you have an established tax home, you may be able to write off some of your travel expenses if you are living or working in the following states: Hawaii, Iowa, Arkansas, Alabama, California, New York, Minnesota, and Pennsylvania. Massachusetts also allows for commuter expenses only.
These expenses are the compilation of costs you have as a result of traveling for your job. You only qualify for these deductions if you have an established tax home, according to Smith. Deductions that you might receive include transportation (the trip to and from travel assignments as well as any hotel stays;) meals you buy while traveling; any expenses you spend on housing that are duplicate expenses to your tax home.
Keep in mind that an area for a tax home is a certain radius that can also cross state lines. The area is typically defined by what a reasonable commute to work would be, which can range from 45 to 100 miles, depending on traffic, or about 90 minutes. Basically, could you drive to work and back in one day?
Once again, it is important to consult a tax advisor to make sure you’re doing this correctly. Don’t just guess or take chances when it comes to travel nurse taxes!