While you can escape many aspects of a traditional work environment as a travel nurse, you cannot escape taxes. As if filing taxes wasn’t overly complicated already, your role as a travel nurse makes navigating taxes challenging. From figuring out your total income to wondering if you have a tax house, and even trying to see what falls under deductions, this simple guide will steer you in the right direction.
Understanding Your Income as a Travel Nurse
Unlike staff nurses who work under a specific taxable salary, travel nurses also have a non-taxable income. Besides your hourly pay, you also receive additional payments that fall under the non-taxable category, also known as stipends. Both of these together are what make up your total income.
When you work with a travel nurse agency, it’s under both of your interests to keep your base rate low and have additional stipends, which cover meals, housing, and other work-related expenses.
However, to qualify for those non-taxable payments, you need to provide the IRS with a tax home.
Figuring Out Your Tax Home
A tax home is the most significant differentiator between travel nurses and traditional staff nurses. The IRS defines a tax home as the city or general area where your primary place of business or work is located, regardless of where your family home is. For example, if you work in New York but live in New Jersey, your tax home would be New York.
To qualify for a tax home, you must prove to the IRS that you visit your primary residence at least once every twelve months and pay for the expenses required to maintain this home.
If you can’t prove that you have a tax home, then you’ll be taxed on those non-taxable stipends we mentioned earlier.
Beware of State Taxes
The general due date to file your taxes is April 15th. However, travel nurses need to prepare well in advance. Since you can often find yourself working at two or three different states at any given year, this means you have to pay non-resident taxes in every state you worked. This is in addition to your permanent tax home.
Be mindful of the different tax laws and regulations of each state. If you’re working with a travel nurse agency, ask them about the various tax laws on each state and see if you can find an experienced accountant who can help you navigate your taxes across the country.
5 Tips for Filing Your Taxes as a Travel Nurse
Getting ready to file your taxes as a travel nurse is not much different than what the rest of the workforce has to do. However, due to the nature of your role, there are a few things to keep in mind to help you make sure you have everything you need for a successful tax filing.
Work With a Professional
Unless you’re a tax professional or an accountant working with the experts in the field is the best way to go. Because of the number of variables that play into your tax buckets, consulting with a professional will help you make sure you’re tapping into all deductibles and taking advantage of all the vessels available for travel nurses.
Ask about Deductions
Just like everyone else, travel nurses are eligible for various tax deductions. Some tax deductions available to you, include:
- Non-taxable stipends such as housing, meals, and incidentals
- Travel reimbursements including public transportation, gas, and airfare
- Professional expenses including tuition, membership fees of professional organizations, malpractice insurance costs, and dry cleaning expenses for work clothes
It’s a hassle, and keeping records is something that takes time and commitment. However, keeping records of everything will help you avoid audits and make sure you’re taking advantage of every possible deduction. Keep your travel contacts, have a mileage log, and save every receipt related to your stipends from proving to the IRS these expenses.
Remember to Stay Around
Ideally, you want to do whatever you can to qualify for a tax home. Even though one of the perks of being a travel nurse is location flexibility, you still want to be mindful of how you move around. Avoid working for more than 12 months in a location that is not your tax home. Return to your tax home at least once a year or after the end of every assignment. And as always, don’t forget to keep records of your trips.
File On Time
With all the traveling and moving around, it’s easy to miss the filing date. Especially if you have to file non-resident taxes in various states. To avoid missing the multiple deadlines, file your taxes as soon as you can collect all necessary documents.
As always, remember to reach out to your travel nurse agency. While they might not be able to give you professional tax advice, they’ll be more than happy to direct you to someone who can. On many occasions, travel nurse agencies work with specialized accountants and tax professionals who understand the travel nursing industry.