Let’s be real – taxes are complicated and sucky for everyone, but they’re especially complicated and sucky if you’re a travel nurse. Whether you’re new to the world of travel nursing or you’ve been doing it for years, odds are you have a basic understanding of how difficult it can be to file taxes. There are a multitude of reasons that factor in to why it’s so confusing and has so much room for errors. So what do you need to know before filing taxes as a travel nurse? Let’s get into it.
Why are travel nurse taxes so complicated?
Here is a quick summary:
- As a travel nurse you have to file taxes in every state you worked in. But there’s an exception for those states that have a reciprocal agreement with the state in which you live
- If you don’t have a permanent residence, you will not qualify for travel nurse tax deductions
- If you have a permanent residence, but worked in another state for more than 12-months – that other state is now considered your legal permanent residence
- That little number you’ve been seeing on your paystub, might be a blended rate, and you will not have to pay income taxes on that full amount
- You can’t claim a tax home, without proving you live there. You will need copies of things like a mortgage or rental agreement
- Your costs of travel to and from any assignment are tax deductible
- Costs related to your job, such as licensing fees, phone, internet, etc., are also tax deductible
- Anything you deduct on your taxes, you will need to prove in the form of a receipt
Could you be audited for doing your taxes wrong?
The answer is: yes. In fact, the travel nursing industry (especially over the last couple of years) has been scrutinized very closely by the IRS. This is especially true if you show that your expenses are high, but your income is low: which can often be the case when your tax free travel stipends (which do not count as income) make up over one half of your take home pay.
Let’s just say for example you own a home, and your mortgage is $5,000 a month. But your taxes state that your income (which would just be your hourly rate and not your tax-free travel stipends) is only $2,500 a month. That’s going to send a red flag to the IRS – and subject you to a possible audit. So you want to be extra careful that you’re filing your taxes correctly. The best way to do this? Through a certified tax professional who specializes in taxes for travel nurses. Lucky for you, we’ve compiled our best tips and tricks for how to find the best travel nurse tax attorney.
*We (Next Move) are not tax professionals. Please consult with a professional tax accountant to discuss your individual tax return.