Travel nurses are just among many of us who experiences a great deal of stress whenever tax time arrives. The process they have to go through may even be more complicated than that of a regular American taxpayer because as a travel nurse, their work requires being in several locations over the course of one year. The most confusing work-related expenses they have to take care of every filing seasons are their meals, travel, and housing. However, it doesn’t always have to be this way since travel nurses actually have numerous tax breaks associated with the type of job they have. If you’re a travel nurse and is currently feeling overwhelmed in filing your tax return, don’t worry. We are going to help you understand the complications in doing tax preparations as a travel nurse and we’ll walk you through important deductions you shouldn’t miss when paying taxes.
Transportation Deductions
You have to get to your destination in order to start your travel assignment. The expenses that come with driving your own car, airfare and other public transportation are deductible less any of the reimbursements you receive. Don’t forget to include the hotel expenses as well. The expenses you make after you finish your assignment and return home or move one to another travel job is also deductible. Another expense you can deduct is the transportation expenses made at the assignment that is business-related. Although there are staffing agencies that offer “travel pay” to offset the expenses incurred during the assignment, the amount offered is still not enough to cover the full amount of the deductible expenses.
Once you use the 2017 standard mileage allowance of 53.5 cents a mile, there is a $535 worth in deductions incurred by your own vehicle from a 1,000-mile trip. If you include other expenses such as the hotels, you’ll get a substantial amount of deductions compared to the offered travel pay that may only be around $300.
Meal Deductions
When filing your tax return, don’t forget to include in your deductions the daily meal “per diem” you incur for the days you are not home for a business. Working on a per diem basis means the standard rates for lodging and meals that are allowed by the government. This way, you no longer have to keep all the thick meal and grocery receipts in your bag, just use the standard meal rate as your deduction. There are staffing agencies who pay meal reimbursements but not all of them. There are those who use the full published amounts while others use a fixed rate for all assignments, sometimes none at all.
If you are dealing with a travel nursing company that gives meal reimbursements that is less than the published rate, make sure you deduct the difference. Keep in mind that the meal allowance is applicable to the travel days at a 75% rate of the destination. Since there are contract dates for most meal reimbursements, the meal deduction for travel days outside of this time frame is allowable.
Housing Deductions
The staffing agency or hospital you belong to will normally provide housing or pay an allowance so you don’t have to worry about the costs of your own lodging. There are some cases that the lodging allowance is lesser than the actual cost and the contract requires the loading to be treated as a taxable wage by every worker at the facility or the contract states everyone will have a wage without any reimbursements. If these cases happen to you and assuming you have a valid tax home, the expenses you spend for the lodging are deductible including the utilities and reasonable furnishings.
What makes filing taxes as a travel nurse a bit more complicated?
There are several reasons why filing your tax return as a travel nurse can be overwhelming and complicated. First, you have to consider the multiples states where you worked. You going to have to file taxes in each place you’ve been to. Second, if you don't maintain a permanent resident in one state, the IRS will consider you as transient which means you may be able to qualify for a tax deduction. Third, if you’ve worked in one state for more than 12 months, that state is considered your home. And lastly, the number you see on your payslip might be a blended rate.
What to do if you’re still confused?
You may have already expected this but we’re going to say it anyway: consult a tax professional. Travel nursing and taxes can become really tricky and intimidating so if you think you won’t be able to handle all the stress that comes with it, nothing is wrong in asking for an accountant’s help. They can answer all your travel nurse tax questions and solve all the complications in your taxes. There are also a lot of agencies that can provide very affordable and optional warranties so when the IRS decides to ask you more questions, they’ll take care of everything in your behalf. This is honestly a much better option instead of trying to do it all by yourself.
