Navigating taxes is a bit more complex as a travel nurse. From filing your taxes to keeping proof of payments, we can help you prepare for tax season properly! Here’s all the information on what you need to know about travel nurse taxes:
Travel nurses are compensated differently than regular staff nurses because they receive taxed hourly pay in addition to tax-free stipends known as a blended rate. These stipends are typically made up of housing, food, and other work-related expenses. They are considered nontaxable because they are expense reimbursements for doing your job as a travel nurse.
To be eligible for the non-taxed stipends, travel nurses must claim a permanent tax home. A permanent tax home means you are telling the IRS that you have a fixed residence and a home at the place of your assignment. You must visit your fixed residence at least once every twelve months and pay for the expenses required to maintain your home. However, if you work in a place longer than a year, it’s considered indefinite and would not prove you have a tax home.
If you cannot claim a permanent tax home, the hourly travel nurse pay rate will still be higher than the average staff nurse’s, but you must pay taxes on the complete rate. Or risk being audited and paying back the government for the tax-free stipends and other fees. Here are some ways to prove you have a permanent tax home:
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Keep a record of all the expenses you have to maintain your primary living residence, such as tracking mortgage payments, saving bills for utilities like the electric bill, making rent payments, etc.
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Rep your home state. Be registered to vote in your primary living area and have a driver’s license in that state
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Don’t forget to visit your primary residence at least once every 12 months. Save a record of this through photos, flight records, etc.
Keep in mind the travel nurse rate will be taxed only on the hourly based rate. So, it’s in the travel nurses’ and Stability’s benefit to keep the hourly rate modest and the nontaxable stipends high. However, not too low, or else when travel nurses collect Social Security payments or apply for other loans, it will be reflected by their annual income. The lower your income, the lower you qualify for the loan amount. BluePipes, NurseFly, Vivian and Travelnursing.org are great resources to find examples of income breakdowns.
For state taxes, remember to file before the April 15th deadline. Every state has different laws for filing taxes, but travel nurses must file a non-resident tax return in every state they have worked in and the state that’s their permanent tax home. For more information, check out the Nursing journal.
The travel nursing industry tends to be scrutinized by auditors. To reduce the risk of an audit, keep all digitized receipts and physical copies of your stipend payments in an accessible central location such as an organized folder or Google Drive.
And don’t forget to ask questions. Stability Healthcare is here to answer any questions you may have. If you have a tax-specific question, it is essential to reach out to a certified tax professional specializing in traveling healthcare professionals.
Stability recognizes that filling out your taxes is different from other medical professionals’ careers. For 2022 start preparing and organizing now, and give yourself plenty of time to do your taxes efficiently.
If you’re interested in becoming a travel nurse, learn more at Stability Healthcare! Visit the travel nurse blog for more information.
