This is my least favorite time of year and tax time for travel nurses can be a challenge. It seems that no matter how I plan I always spend hours getting ready to file my taxes. Like most people Travel nurses will need to take the new tax law into consideration before filing the 2018 taxes. The new tax act that passed in December of 2017 has a number of changes that can and will affect travel nurses. Some things that changed include the income tax rates, standard deductions, and reduction of itemized deductions.
Let’s take a look at a few helpful hints that will get you through this tax season without so much stress and worry.
Hire a Tax Professional
I highly encourage you to have a tax professional to prepare your taxes. The new tax laws may present a challenge to even the most seasoned travel nurse. When you have a tax professional you benefit in a couple of ways. They will understand the new laws and be able to compute the best refund or lowest bill for your circumstances. They will also be able to give you ideas on the best way to go forward. A professional can help you to maximize the benefit of the new law for filing next year.
Organize all travel receipts
You will find that staying organized with all paperwork and receipts for your travel assignments will help at years end. You also will be able to justify any reimbursements with proper documentation. Remember you can be audited by the IRS at any time. Keeping your receipts will help for calculating deductions from previous years.
In a previous post on this site, I provided some detailed information on how the new tax plan can affect you as a travel nurse. Check it out for more helpful information.
Know your tax home
As a new travel nurse, you may not understand what a “tax home” is. A tax home is the general locality of your primary place of work. It is where your primary place of business or employment is located. Your residence is your permanent address or home. Even though you have had several “homes” throughout the year you will need to identify one specific location in order to calculate work-related expenses.
Under the new tax law, many employee business expenses have been taken away which may affect your refund or bill. Many tax-free reimbursements are still allowed and another reason to discuss with a tax professional before you negotiate your next contract.
Remember your state income taxes
Part of traveling is working in one or more states during a tax year. Part of filing your taxes is filing in the state or states where you have worked. Some states do not have an income tax but you need to be responsible for finding that out. Another reason for having a tax professional is to help with the state income taxes if required.
If you do maintain a permanent home for federal tax purposes, you need to not file as a part-year resident in other states. Let your tax professional figure it out for you as it can be confusing.
Negotiate a reimbursement package
As you go forward into the new year negotiate as many non-taxable reimbursements for travel as you can. Ask for meals, CE requirements, licenses, uniforms and other special equipment you need for your assignment as part of your employment contracts. With the new tax laws no longer allowing you to deduct many of these expenses, perhaps your staffing agency can make individual contracts more attractive adding a more valuable reimbursement package. Maybe then tax time for travel nurses next year will be less stressful.
*I don’t claim to be tax professionals but one I recommend is TravelTax.com. I recommend you consult with a professional tax accountant to discuss your individual tax return.
