There are so many benefits of being a travel nurse. From getting diverse work experience and expanding your network, to earning more money and seeing the country…what’s not to like? And come April, there’s an added upside. There are many travel nurse tax deductions that you can take advantage of.
Each year when tax time rolls around, you may get nervous about travel nurse tax prep, but we’re here to make this process easy with our travel nursing tax tips! These tips can help you make the most of your income and help you get the greatest return on your yearly taxes – a win-win!
Download our Travel Nurse tax deductions checklist today!
First, let’s review the reasons why filing taxes as a travel nurse can typically be a bit more complicated:
- If you work in more than one state, you have to file travel nurse taxes in each location.
This means multiple tax and overlapping data can get confusing. The exception is that one of the states has a reciprocal agreement with the state where you live. This takes a depth of understanding of state tax returns that most people don’t have. On top of that, you still have to file your federal tax returns and understand all the tax deductions for travel nurses that you can take.
- If you don’t maintain a permanent residence in one state, the IRS classifies you as transient.
This means you will not qualify for travel nurse tax deductions. To ensure you make the most of this travel nurse tax deduction, it’s necessary to have one permanent residence you return to in between assignments.
Where You Work Versus Where You Live
- If you’ve worked in one state for more than 12 months, then that state is your home.
Period! According to the IRS, this is even the case if you maintain a permanent residence in another state. This can be a frustrating situation when it comes to travel nursing and taxes, particularly if you keep your permanent residence in a particular state for tax purposes.
- The number you see on your payslip might be a blended rate.
According to Crystal Gustafson in Understanding Your Travel Nurse Pay Package and Taxes on Travelnursing.org, a blended rate includes your taxable base rate, as well as non-taxable reimbursements and stipends.
[clickToTweet tweet=”Keep copies of contracts, paystubs & financial info to get these #travelnurse tax breaks:” quote=”It’s essential that you always keep copies of your contracts, pay slips, and all other financial information your employers send you.”]
So, the question becomes what can travel nurses claim on taxes? As you can see, it’s not quite as straightforward as you initially thought, But don’t worry; we can help. Take a look at our travel nursing taxes guide below!
What Travel Nurse Tax Deductions Should I Be Aware Of?
In order to minimize the amount of tax you have to pay and to take advantage of the tax deductions for travel nurses you may qualify for, you need to understand the ins and outs of the various tax write-offs for travel nurses. These can include:
Tax break #1 – The costs of maintaining your tax home
Your tax home is your fixed abode. It’s the home you pay a mortgage or rent for, as well as upkeep and utility costs. This is the residence you return to between jobs, as long as that job doesn’t force you to work in a single location for more than 12 months.
As explained by NurseJungle.com, you need to establish a tax home in order to claim travel expenses – you can’t prove you’re traveling if you don’t have somewhere that you’re leaving behind. You can provide proof of your tax home by:
- Keeping copies of mortgage or rent documents
- Maintaining your driver’s license in your home state
- Maintaining your car registration in your home state
- Registering as a voter in your home state
- Filing your taxes in your state
Tax break #2 – Travel expenses from your tax home to your place of work
Once you have set your tax home, anytime you’re away from home you can deduct your travel expenses – anything that gets you from Point A to Point B. These expenses include:
- Airline tickets
- Train, bus, and boat fare
- Taxi fares to and from the airport, terminal, or station
- Shipping and baggage
- Car rental fees
- Any car-related travel such as gas, car maintenance costs, tolls, and parking
- All costs associated with accommodation and meals
- All tips associated with these costs
A few simple travel nursing tax tips: instead of keeping a record of every meal and deducting the actual cost, use a standard meal allowance, which is generally limited to 50% of the unreimbursed cost. And don’t forget to deduct travel expenses for conventions if they benefit your work!
Tax break #3 – Professional expenses
Tax deductions for travel nurses also include all expenses that are required for your job. These are considered workplace expenses and cover anything that is “ordinary and necessary” to complete your work. They include:
- Malpractice insurance
- The costs of your uniforms, including dry cleaning and laundry costs
- Any phone, Internet, and computer-related expenses—including warranties, as well as apps and other software related to your job
- The costs of professional licensing
- The costs of continued education, including books
- The costs of any trade literature
- Any costs related to your job search
And be sure to include any home office costs that are incurred for the convenience of your employer! This includes setting up a desk, purchasing filing cabinets for confidential papers, and more.
[clickToTweet tweet=”Minimize the amount of tax you have to pay as a #travelnurse, with these tax breaks…” quote=”In order to minimize the amount of tax you have to pay, take advantage of the many tax breaks you may qualify for as a traveling nurse.”]
Keep Receipts for Everything!
In order to qualify for all of these travel nurse tax deductions, you need to provide proof that you paid for them.
That means keeping all receipts—even when it’s just for a cup of coffee while you’re waiting at the airport. Every receipt you miss is less money in your pocket.
Still, we understand that keeping track of expenses can be difficult. That’s why we recommend noting them down each month to make it easier to maximize your tax write-offs for travel nurses. This can be as simple as creating a spreadsheet on your computer that you fill out each night or using a free mobile app to log expenses right from your phone. Check out Concur Mobile, or Expensify. A little travel nurse tax preparation now can save you hours and days of work in the long run.
However, if you don’t have time for this (and so many of us don’t), keep a separate receipts folder in an easy-to-access place. Every time you come home, add any receipts to it. And do the same for digital receipts: keep a separate file for them on your computer. Then, all you have to do come tax time is sort, and add them all up. Just make sure that you keep separate folders for each state where you work for the year.
Ask Your Staffing Agency About Taxable Income
One of the best ways to make sure you’re not paying too much income tax is to double check with your agency. Find out how much of your salary is taxable, and how much is exempt – the amount might surprise you.
The staffing firm’s finance department will be able to provide you with a clear breakdown that you can use for the filing of your travel nurse taxes.
Our Takeaway Tip
Travel nursing and taxes can seem tricky, so if you’re intimidated by travel nurse tax preparation (and making the most of the travel nurse tax deductions), go to a professional. These accountants an help answer all of your travel nurse tax questions and save you from a headache or missing out on what you’re owed.
At nationwide franchises, there are advisors with the expertise and software to make even the most complicated tax filing relatively painless and they can even offer travel nurse tax tips!
What’s more, they also provide very affordable and optional warranties. That means if the IRS has any questions or decides to audit you, the tax preparer will assist you.
And that’s a far better option than trying to do it all by yourself! Still, if you have to do it all yourself, we hope the tips we’ve provided give you a great place to start.
➡ Which of the travel nurse tax deductions do you benefit from most?
Share with us in the comments below!
Download our Travel Nurse tax deductions checklist today!