Tax Tips for Travel Nurses

by Howard Gerber on November 22, 2012

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Tax Tips for Travel Nurses

Tax season is approaching like a freight train, and with it, that dreaded paperwork. Being a travel nurse complicates thing exponentially. Here are some things you need to know if you’re just starting out.

1. Every state has different rules, and you have to file in every state you work. Some states, like Florida, have no state income tax. Many others do, and you have to comply. You also have to pay taxes in your home state for all income earned in the US…but if you did pay income tax in another state, you can deduct it. Our best advice is to get a qualified accountant to keep track of it all.

2. Document everything. Every contract, every receipt, every expense. Since lugging around all that paper would be a recipe for disaster, track it online. There are a number of tax programs that help you organize receipts and keep track of expenses. Check out shoeboxed.com, Tax Central from H&R Block, and IRS2Go, to check on your filing status.

3. Understand that the perks may be taxable. Your living and travel expenses are extensions of your pay. Don’t be blindsided if the IRS wants a cut.

Surviving an Audit

It’s always nerve-racking to get that letter, but if you’ve kept your files up to date, you’ll be fine. But you’re going to have to be prepared, because travel nurses are not the “norm.” You may have to fight for your deductions, and it’s best to go armed with a professional by your side.

You’ll need a copy of every contract, your expense and mileage sheets, and receipts for every deduction. If you’ve kept track of everything using a program, take some time to print out and organize every expense, or ask your tax professional to do so. If you’re lucky, you may get an auditor with some experience in this area, who understand the complexity of the tax code with regard to travel nurses.

What they are most going to be interested in is “Unreimbursed Employee Expenses.” This includes travel expenses, living expenses, and other deductions related to work. They will ask for a form or letter from your employer explaining these expenses. Be proactive and request that information in advance. The IRS has set up a conundrum that could be a potential problem for you. Government rules dictate that you are paid as an employee with a w-2 form, but you are more like an independent contractor. The IRS’s own rules make your tax situation confusing. Most people don’t get audited, but if you do, make sure that you’re fully prepared to defend your deductions.

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