If you are a nurse who has experienced traveling on the job and loved it, you need to know all about the payment policies of the job and how you can handle your taxes. Travel nurses are permanently assigned to quick and short work assignments, which vary from 13-26 weeks.
The nature of their profession takes them to different locations as they serve communities and help replenish the shortages of healthcare workers in some areas. Now, did you know that as nurses travel from one country to another, they also enjoy substantial tax benefits?
For traditional nurses, they get a taxable salary from one employer. While travel nurses get a base rate with reimbursement and stipends, that may be tax-exempt, primarily if they work far from their tax base. Their tax base refers to their primary place of work which could also be their family house.
The idea of tax-free allowances presents tax complications which makes it complicated for the nurses. For instance, travel nurses must prove that they work far away from their tax homes in the capacity of a travel nurse. They will be required to account for their travel expenses with their employers before they can enjoy the tax-free allowances.
More so, excess allowances will also count as income, and nurses might underpay taxes if they under-report their wages. But the bigger problem here is that many such travel nurses cannot show that they have a tax home because they only work short periods for different employers during the year. So for such travel nurses without consistent workplaces, the IRS will consider them as having legitimate tax bases if they can prove that:
They partly work in their primary residences and also lodge there.
Their living costs incurred at their primary home doubles because their work takes them far from home.
They haven’t left their home dwelling as some family members live at their homes, and they use it often for lodgings.
The travel nurses must meet these criteria to prove their tax base if they don’t have a consistent workplace. Moreover, tax courts will always consider the nurse’s claim of tax home if they meet two of the requirements.
If a nurse only meets one of the requirements, she will be viewed as an itinerant staff. The nurse would not be eligible for tax-free allowances as a mobile staff. Additionally, travel nurses must deal with different W-2 Forms from other employers that they worked within the year. Traditional nurses that work for one employer in a whole year only have to compete with one W-2.
The tax-free allowances are not the only financial benefit of being a travel nurse. Travel nurses also enjoy tax deductions for legal business expenses, which are in surplus of allowances. These benefits entail expenditures for lodging, meals, and transportation.
A 50% limit also applies to deductions for business entertainment and food. Also, don’t forget to subtract other professional expenses like business insurance and the cost of taking on nursing education. For more details on handling reimbursements and stipends for tax purposes, please read the IRS Publication 463.
To be a travel nurse is to enter a world of excitement with the freedom to travel and make an impact. It also presents numerous opportunities to enjoy tax deductions, reimbursements, and allowances great for your finances. If you are a travel nurse, it is not too late to explore the tax possibilities that come with your unique profession.
Enjoy traveling, bask in the feeling of treating grateful patients and enjoy the thrill of tax deductions: this is the goal for every travel nurse!!!
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