Travel nurse taxes are complicated. Between designating tax homes, taxes in different states, and stipends, it can be quite overwhelming. Luckily, there are tons of resources online to help travel nurses file their taxes. We’ll go over everything you need to know about travel nursing and taxes. DISCLAIMER: we are not tax professionals! Please consult a travel tax professional or CPA when filing your taxes.
Travel Nurse Taxes: Tax Home VS Permanent Address
Traveltax.com defines a permanent address as the area where you maintain legal ties. This could be your driver’s license, vehicle registration, voter’s registration, etc. A tax home is your designated place of income. With that being said, if you are a travel nurse who maintains their tax home along with duplicated expenses, your permanent address will be the same as your tax home. A common misconception among travel nurses is that in order to claim stipends, that you don’t need to have a tax home. This is false! If you’re receiving tax free stipends, you need to have documentation for a tax home to justify your expenses. Even if you travel around the country in an RV or are staying with family, make sure you are still maintaining a permanent address.
Per Diems & The 50 Mile Rule
When you see pay packages for travel assignments online, often times you see rates for per diems, also called stipends. Per diems are a form of tax free compensation to cover lodging and meals while nurses are on a travel assignment. How much you receive in stipends depends on where your assignment is located. Visit the U.S General Services Administration website to find out how much you should be receiving in stipends. Remember: talk to your recruiter about maxing out your stipends. Your stipend will reflect the cost of living in the specific city you are traveling to, and as a travel nurse you are entitled to the maximum amount.
Now, there’s a lot of confusing information surrounding the dreaded “50 Mile Rule”. To set the record straight, it does not exist according to the IRS. Shocking, right? But there’s a catch. For travel nurse agencies, the “50 Mile Rule” is typically an internal policy guideline, or a facility rule. These stipulations are not based on IRS code. Travelers, take notes! There is one thing we cannot stress enough. You must be duplicating your expenses to qualify for a travel stipend. Just because you might sleep away from home, does not mean that you automatically receive a stipend. Sure, you might be able to find a loop hole in your assignment that allows you to get a stipend. Remember, you can be subject to a tax audit. If you are unable to provide proficient evidence, you could be subject to paying taxes on any stipends you received.
PRO TIP: Keep track of all of your travel expenses using a budgeting app!
Travel Nurse Taxes: Record Keeping
It’s time to address the elephant in the room. Every travel nurse’s worst fear is being subject to an audit from the IRS. While the likelihood of that happening is slim, it’s always best to keep record of everything. And we mean, everything. Especially when it comes to needing to provide proof of duplicated expenses. Keep copies of your hotel or Airbnb receipts, ALL of your agency/hospital contracts, and anything else related to your travel. You can keep these in a file folder, or if it’s easier, you can scan documents on to your phone and organize those documents digitally. Be incredibly organized and detail oriented while keeping tax records. Keep documentation of everything for at least 7 years, even if you think you won’t need it.
12 Month Rule
Here’s a common scenario that travel nurses can run into. You find your unicorn travel assignment! Beautiful location, great staff, traveler friendly, safe staffing ratios. You think you could stay here forever. Only one problem: You have extended several times and are coming close to hitting your one year mark at the facility. The IRS is infamous for being vague with their rules. According to traveltax.com, here are a few solid suggestions you should follow:
- You should spend 30 days a year at home.
- Do not stay in one place for more than 12 out of 24 months.
- Don’t return to the same area for more than 3 years in a row.
Remember, there are fifty states in this country. Keep exploring! That’s the reason why you decided to start travel nursing. There are bigger and better things out there, and you can always return in a few years. For tax purposes, make sure you are switching up your location every few months. If you end up staying at a facility for more than a year on contract, it can disqualify you from receiving stipends.
Get Started
That was a lot of information, I know. As long as you’re organized with your documents and keep regular track of your travel expenses, you should have everything prepared to file your taxes as a travel nurse. If you’re still unsure of where to begin when filing your taxes, please consult a travel tax professional for assistance. Taxes can be stressful for travel nurses, but the good news is there are hundreds of resources online to utilize. Do your research, consult a professional, and (hopefully) relish in that refund check once it hits your bank account.
DISCLAIMER: We are not tax professionals! Please consult a travel tax expert or CPA before filing your taxes.
