While the potential of tax deductions is enticing, the reality of tracking your expenses can be a slog. Knowing which deductions are available to you as a travel nurse can feel overwhelming.
While the long list of tax filing requirements can look intimidating, with some preparation, it doesn’t have to be.
In this guide, we’ll cover some of the standard deductions a travel nurse can take on their tax return and how to keep your records organized and ready for tax season.
Table of Contents
- What Can Travel Nurses Deduct?
- What Can Travel Nurses Claim on Taxes? 5 Deductions You Won’t Want To Miss
- How to File Your Taxes to Ensure Every Allowable Deduction Is Included
- Online Accountant Software
- Pop-Up Tax Services
- An Accountant or CPA
- How to Keep Track of Your Travel Nurse Deductions Before Tax Time
- Excel Spreadsheet
- Software Program
- Filing System
- Professional Tax Accountant
- Interested in Travel Nursing? TNS Can Help
What Can Travel Nurses Deduct?
Here are some categories of travel nurse tax deductions to be aware of:
- The expense of maintaining your tax home
- Travel expenses from your tax home to your work
- Professional expenses
Travel nurse income has a tax advantage. Companies can reimburse you for certain expenses while working away from your tax home.
Carefully documenting your tax home is important.
Naming a permanent residence as your tax home allows you to deduct work-related expenses from your tax return. If you don’t have a tax home, a fixed, permanent place of residence, the IRS will not allow you to deduct travel expenses because you’re never “traveling” away from home.
Generally, a tax home is:
The entire city or general area where your main place of business or work is located, regardless of where you maintain your permanent home.
To claim the tax benefits of being a travel nurse, your tax home must fit these requirements:
- You must have regular employment in the area
- Spend at least 30 days of the year in that place
- Have a permanent, physical residence that you pay for and maintain
- Have duplicate living expenses when you work outside of your tax home
If you decide to stay more than 12 months in one location, the IRS sees that as your new tax home.
Keep reading to learn what expenses you could deduct on your next tax return.
What Can Travel Nurses Claim on Taxes? 5 Deductions You Won’t Want To Miss
It’s important to note that we are not tax experts, and always recommend you take the time to speak to a professional accountant. Federal guidelines and local laws change often, and a tax professional will know the most updated information to help you get the most out of your tax return and reduce your risk of an audit.
#1: Stipends
Travel nurses can claim more than travel-related expenses. A stipend is a lump sum or a fixed amount that is given to you periodically to cover expenses. When they cover duplicate expenses they’re tax-free.
Duplicated expenses are living expenses that occur away from your tax home such as:
- Lodging
- Meals
- Incidentals
Let’s take a look at a few examples of what might qualify as a nontaxable stipend.
Trayvon is on a travel nursing assignment for the next two months. He decides to rent out his home to a friend for 12 days. Trayvon’s home is not considered a business property even though he makes some money off of the time his friend stays there.
Stephanie rents out her home intermittently while on assignment by using Airbnb. She claims her rental as her tax residence because she uses it for herself for more than 14 days during the year, or 10% of the total days rented to others.
Janelle takes back-to-back assignments throughout the year. While she’s gone she rents out her home throughout the entire year. This is considered a business property and not a residence. She does not qualify for a nontaxable stipend.
#2: Reimbursements
Here is one area where keeping your receipts is very important. These expenses can add up and the burden of maintaining proof can mean lots of receipts lying around. Some of these items can’t be deducted on a ‘because I said so’ basis.
Reimbursements can include such things as:
- Airfare
- Gas mileage
- Public transportation
- Uniform dry cleaning
#3: Professional Expenses
Tax deductions for professional expenses include expenses related to your job.
This may include the costs related to:
- Professional licensing
- Malpractice insurance
- The cost and maintenance of uniforms
- Phone, Internet, and computer-related expenses related to your job
- Continued education which includes the cost of books
- Trade or specialty literature
- Costs related to your job search
#4: The Cost of Maintaining Your Permanent Home
Claiming the costs of maintaining your permanent residence is a good way to offset expenses while still being able to claim it as your tax home.
If you decide to rent your home year-round, you can report certain expenses as deductions:
- Insurance
- Interests
- Maintenance costs
This can help reduce the total amount of taxable income you receive from your rental. You’ll need proof of these expenses to claim them.
To provide proof, keep records such as:
- Receipts from renewing your license in your home state
- Copies of your mortgage or rent payments and other related documentation
- Voter registration in your home state
- Filing your taxes in your state
- Renewing your car registration in your home state
#5: Travel Expenses
Deductions for travel expenses vary by definition of your tax home, and the state in which you maintain a permanent residence. A side note: special rules also apply if you’re traveling to conventions held outside of North America.
Travel deductions may include, but aren’t limited to:
- Travel by airplane, bus, train, or car between your home and your business destination. Limitations apply if you’re using frequent flyer benefits or a similar program
- Taxi fares
- Shipping your baggage between your regular and temporary work locations
- Using your car while on assignment
- Lodging and meals related to business purposes
- Laundry services and dry cleaning
- Any tips you pay related to these expenses
- Other necessary expenses related to your business travel
You can also have a standard meal allowance. Deduction for these business meals is generally 50% of the unreimbursed cost.
How to File Your Taxes to Ensure Every Allowable Deduction Is Included
Online Accountant Software
Online accountant software is an easy way to organize your expenses and record keeping. Here are a few suggestions to compare and see if they suit your needs:
- TurboTax
You can file your end-of-the-year tax returns through TurboTax. They allow you to add lots of information about your business expenses to get your deductions.
- Google Drive
Have a Gmail email address? You can use Google Drive if you want to file all of your tax documents on the cloud. You can include:
- Videos
- Pictures
- Microsoft documents such as Word or Excel spreadsheets
- Expensify
This is a program that allows you to easily scan and track your:
- Receipts
- Bills
- Reimbursements
- The Grizzly Labs
The Grizzly Labs also allow you to track and scan important paper documents. They also help optimize the picture to reduce terrible lighting or shadowing.
Pop-Up Tax Services
Many tax preparation companies have a year-round storefront. However, it’s advantageous for these companies to put a pop-up store during the four-month tax season.
During this season you’ll often find pop-up tax preparation locations in visible spaces like a mall atmosphere or another busy shopping area. Walking into a retail storefront may seem less intimidating than accessing a standalone space.
As a travel nurse, these locations may be more visible to you and cut down the time it may take to access an accountant.
An Accountant or CPA
Hiring a professional tax accountant or CPA may be invaluable. While programs that allow you to do your taxes from your home are updated with the most recent tax laws, having a conversation with an accountant may help you to find new ways to categorize your deductions and your expenses.
They may also give you good advice for the following tax year.
How to Keep Track of Your Travel Nurse Deductions Before Tax Time
There is no best way to keep track of your travel nurse deductions. Every travel nurse has their own way of maintaining records. Here we’ll highlight some different organizational systems that may work for you.
Generally, the IRS can audit you for up to six years after you file the return. It’s a good idea to hang on to your documents for at least that long.
Excel Spreadsheet
Handy with Excel? If you’ve got your own system of documenting your receipts and expenses, the control of being able to organize it how you like, a spreadsheet may be the way to go.
Software Program
There are numerous programs out there to help you save your receipts.
Here is a shortlist of organizational programs:
- Smart Receipts
- Scanner from Evernote
- ReceiptMate
Another recommended program is called TravelTax. This program is like a digital receipt envelope for travel nurses. It also doubles as a gas log.
Filing System
For those who prefer a more physical, tactile means of organizing your receipts, online stores such as FranklinPlanner offer a physical, organized means of collecting receipts.
Or you can also use durable, water-resistant, plastic envelopes to organize your paperwork and take it with you as you travel.
Professional Tax Accountant
Your tax preparer has to keep your information for a minimum of three years from the date your tax return is filed. It’s still your responsibility to keep your information for six years, but knowing you have a backup for the last few years is a good resource to draw upon in case you need it.
Interested in Travel Nursing? Trusted Nurse Staffing Can Help
Managing your taxes is hard enough. But finding a travel nurse assignment doesn’t have to be.
Those of us as Trusted Nurse Staffing support our nurses before, during, and between travel nurse assignments. With Trusted, you’re not just a number. We’re dedicated to helping you along every step of the way.