There are so many benefits of being a travel nurse. Not only do you get to travel the world, now there are tax deductions that you can take advantage of!
Let’s first discuss why filing taxes as a travel nurse can be a little more complicated than the norm:
If you are working in more than one state throughout the year, you have to file travel nurse taxes in each of the states. There is an exception where one of the states has a reciprocal agreement with the state where you live. Most people do not have a depth of knowledge about state taxes. Furthermore, you will need to file your federal tax reports to consider all the tax deductions for travel nurses that you may access.
It’s always a good thing to have a permanent residence. If you do not have a permanent residence in one state, the IRS will classify you as transient, which will disqualify you from being eligible for travel nurse tax deductions. To qualify, you must have one permanent residence that you can return to in between assignments.
The IRS will classify a particular state as your home if you have worked in that one state for more than 12 months. This is even the case if you maintain a permanent residence in another country.
On your check stub, you may see a blended rate. This is your taxable base rate, as well as your non-taxable reimbursements and stipends. Would you like to know what exactly you can claim on your taxes? Continue reading these key tax breaks below.
Travel Nurse Tax Breaks
No one wants to pay more in income taxes that hey absolutely need to. That’s why I’ve provided this list of tax deductions/breaks that you may qualify for as a traveling nurse.
#1 – The costs of maintaining your tax home
Your tax home is the permanent residence you return to between jobs, as long as that job doesn’t cause you to work in a single location for more than 12 months.
In order to claim travel expenses, you need to set up a tax home. How would you prove that you’re traveling if you don’t have a place that you’re leaving behind? To provide evidence of your tax home, you will need to do the following:
- Keep copies of mortgage or rent documents
- Keep your driver’s license in your home state
- Keep your car registration in your home state
- Register to vote in your home state
- File your taxes in your home state
#2 – Travel expenses from your tax home to the place of work
Now that you’ve got your tax home set up, any time that you are away from your home, you can deduct your travel expenses. These can be one or more of the following:
- Airline ticket
- 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 the tips related to these costs
It would be hard to keep track of every meal and deducting the actual price so that you can use a standard meal allowance. This would generally be about 50% of the unreimbursed cost.
#3 – Professional Expenses
Let’s not forget about all of those expenses that are required for your job. Those include:
- Malpractice insurance
- Clothing expenses such as uniforms (including dry cleaning and laundry costs)
- Phone, internet, and computer-related expenses (including warranties, as well as apps and other software related to your job)
- Professional licensing expenses
- Continued education expenses (including books)
- Trade literature
- Any costs associated with your job search
Lastly, be sure that you don’t forget to include any home office costs that are incurred for the convenience of your employer.
Final Words of Wisdom
It is imperative that you keep receipts for everything! You have to be able to provide proof that you paid these expenses to qualify for the travel nurse tax deductions. Even you only purchased a cup of tea while you’re waiting for your flight, keep your receipt!
The recommendation to keep up with all of your receipts is to write them down each month is a simple spreadsheet on your computer or use a free mobile application to log them in real-time into your phone. Then file it away by the month
Even though there are many do-it-yourself and software tools available for preparing and filing income taxes, travel nurses should consider hiring a tax professional who knows the nuances of tax preparation. They will help provide you with a clear
understanding of what you can use for filing your travel nurse taxes. With the help of a professional, you can earn more money with your tax deductions.
If you’re interested in learning more, please contact us at firstname.lastname@example.org