What You Need To Know About Travel Nurse Tax Deductions - Tax Professionals Member Article By Dennis Jao
Posted by Dennis Jao

What You Need To Know About Travel Nurse Tax Deductions

What You Need To Know About Travel Nurse Tax Deductions

There are so many perks of being a Travel Nurse, and there is an added bonus: there are travel nurse tax deductions you can take advantage of!

First, let us have a look at the reasons why filing taxes as a travel nurse tend to be a bit more complicated:

  • Different States: If you work in more than one state, you must pay travel health care expenses at each location. The only exception is that one of the states has a mutual agreement with the state in which you live. It requires a thorough understanding of state tax returns that most people don't have. Plus, you need to file your federal income tax returns and understand any deductions you can make for travel health care.

  • Permanent Residence: If you don't have a permanent residence in a state, the IRS classifies you as temporary, so you will not be entitled to tax deductions for travel nurses. You must have a permanent residence to return between assignments to be eligible.

  • Where You Work vs. Where You Live: If you have worked in a state for more than 12 months, that state is your home; according to Uncle Sam, that's the case even if you keep your permanent residence in another state.

  • Your Salary: The amount you see on your paycheck may be a combined rate, which is the base rate for tax, as well as non-taxable wages and reimbursements.


Why Should I Know About Travel Tax Deductions?

In order to reduce the amount of tax you have to pay and take advantage of any travel tax deductions you may be entitled to, you should understand the pros and cons of the various tax deductions for travel nurses. This may include:

Cost of Maintaining Your Tax Home

Your tax address is your permanent abode. This is the home you return to between jobs, as long as that job doesn't require you to work in the same location for more than 12 months.

You must establish a tax address to claim travel expenses; you cannot prove that you are traveling if you have nowhere to go. You can provide proof of your tax address in the following ways:

  • Filing taxes in your home state

  • Keep copies of mortgage or rental documents

  • Register your car in your home state

  • Keep your driving license in your home state

  • Register as a voter in your home state


Travel costs from the home state to your place of work

Once the tax address is established, you can deduct travel expenses when you leave your home. These costs include:

  • All costs associated with accommodation and meals.

  • All travel related to the car, such as gasoline, car maintenance costs, tolls, and parking

  • Car rental rates

  • Delivery and luggage

  • Plane tickets

  • Taxi costs from and to the airport, terminal, or train station

  • Train, bus, and boat fares

  • Any tips associated with these costs

Instead of tracking each meal and deducting the actual cost, use a standard meal allowance, which is typically capped at 50% of the unreimbursed cost.


Professional Expenses

Tax deductions for travel nurses include all expenses necessary for their work. They include:

  • All costs are associated with finding a job.

  • All expenses related to your phone, Internet, and computers, including warranties, as well as applications and other software related to your work.

  • Continuing education costs, including books.

  • Costs of professional licenses

  • Insurance for malpractice 

  • The costs of any trade literature

  • Uniform fees, including dry cleaning and laundry fees

And ensure to include any home office expenses you need to pay for the convenience of your employer!


Keep receipts for everything!

To qualify for all of these travel tax deductions, you must provide proof that you have paid for them.

This means keeping all your receipts, even just for a cup of coffee, while you wait at the airport.

We recommend that you enter your receipts each month to maximize tax deductions for travel nurses. You can create a spreadsheet template on your computer to fill out every night, or you can use a free mobile app to record expenses right from your phone.


Ask your staffing agency about taxable income.

Check with your agency to be sure you're not paying too much income tax.

Your recruiting firm's finance department will be able to provide you with a clear analysis that you can use when submitting travel taxes.


Final Word

Taxes and travel nursing costs can seem overwhelming, so if you're feeling uncomfortable, see a professional to help answer all of your questions.


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Dennis Jao
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