4 Tax Challenges Travel Nurses Face and How You Can Handle Them

Guest Post: Jeremy Commisso, Founder & CEO of Nurse First Travel

The thrills of being a travel nurse are many. There’s the excitement of setting forth to a new city, the adventure of operating within a different clinical space, and the joy of knowing your skills can apply and help people anywhere. But there’s also the tricky business of keeping your financial records tidy so that come tax season, you can properly file with the IRS.

As anyone who travels for a career knows, keeping records straight is no easy tax. Fortunately, there are some wise ways of staying tax-compliant that any travel nurse can implement.

In this guide, we’ll look at 4 tax challenges travel nurses face and how you can handle them.

Keep Records of Everything

A travel nurse essentially operates as a contract employee and because of that, they need to keep track of records of all of their contracts. These documents will become critical if ever asked to prove for whom and for how long they have worked at a given hospital or clinic.

Maintaining a mileage log is another key step. This applies to any vehicle used for work be it a car you own or a rental. A travel nurse should keep records from January 1 - December 31 of a given year. 

And when it comes to record-keeping, travel nurses should hold on to all receipts. A record of receipts can be used to write off business expenses accrued through the year.

Establish and Maintain a Tax Home

The very nature of the title “travel nurse” might seem to imply that the individual doesn’t have a permanent home and even if that is the case, you need to establish and maintain a tax home. What’s a tax home?  The IRS defines a tax home as “the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home.”

The IRS gives this example to break it down:

“For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals, or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.”

The reason it’s important to establish and maintain a tax home is so that you can calculate your taxes correctly. Travel expenses paid or incurred in connection with a temporary work assignment away from home can be deducted. But this rule does not apply to “indefinite work assignments.” Indefinite work assignments are those that go beyond a year. So if you have a contract beyond 12 months, travel expenses are nondeductible.

The other reason a tax home can be beneficial is to ensure you qualify for tax-free stipends. To earn these you might meet at least two of three requirements for a tax home:  

• Earn a minimum of 25% of your income in the geographical area.

• Have a permanent residence.

• Have not abandoned your tax home.

 

If you fail to establish a tax home, you could be taxed on stipends, essentially reimbursements that travel nurses receive to cover things like meals, housing, and work-related expenses. If filed correctly, these reimbursement stipends aren’t considered income and therefore are non-taxable. 

File Your Taxes Accurately

Travel nurses might find themselves having worked in multiple states throughout a year. And while that’s a traveler’s dream, it also means that travel nurse must file their taxes in every state they worked in.

Naturally, state taxes will vary, but to stay in compliance with tax laws, it’s important not to overlook any states. 

Work with a Good Agency

To set out on the right foot in the travel nurse industry, a nurse has to have more than a great medical background. They need to work with an agency that not only understands the travel nurse landscape, but can provide a streamlined onboarding process that’s transparent, efficient, and provides crystal clear timekeeping/payroll processes to ensure each traveler is paid in a timely fashion and therefore can stay within IRS compliance. 

For instance, Nurse First Travel was developed to find a solution to “low-balling and overcome the industry’s cultural feeling of Agency versus. Healthcare Professional opposed to Agency and Healthcare Professional.” 

By developing better pay packages the agency isn’t just helping fill a desperate healthcare need, but supporting the nurses in their life and career goals at the same time. 

Travel nursing can be a rewarding career for someone who craves adventure. And it can be financially rewarding as well if taxes are handled with care. For those looking for their next career move, there’s Nurse First Travel. And for those who want to know how to make the most of it come tax time, they can turn to an accounting expert to walk them through the best ways to maximize a travel nurse career.