Travel Nurses and Tax Season: How to Claim Your Expenses, Income, and Everything Else
Have you thought about what your tax returns are going to look like this year? Or next year?
When you’re a travel nurse it can be difficult to figure out just what things are going to look like. You’re not getting paid the same way that a traditional nurse does. So, what does that mean when it comes to tax time? We’re going to take a closer look.
Taxes in the Nursing Profession
Under normal circumstances your taxes as a nurse would be quite … well, normal. You would get a W2 from your employer and use that to complete your tax forms. Everything would be straightforward. You’d put your income on the line, fill in a few boxes and be done.
But when you’re doing travel nursing things get a little different. That’s because your pay isn’t all coming from the same place. And it’s not all considered ‘pay’ either. There’s more to it than that. So, what changes when you switch from a traditional nursing position to being a travel nurse?
Taxes as a Travel Nurse
First up, we need to look at the actual taxable part of your income as a travel nurse. This is the money that you get as your salary or hourly rate.
When you hire on as a traveling nurse you’ll be given a pay package that includes a number of things. The first is going to be the hourly rate that you agree to. That rate is the part of your package that’s taxable.
Keep in mind, however, that if you work for multiple services throughout the course of a year you’ll need to account for each of those places on your taxes. That means you’ll have multiple W2 forms that you need to include when you file your taxes.
But there’s more to it than that.
Your Pay Package
Chances are, your pay package includes more than just your actual hourly rate. It will likely also include things like a meal allowance, housing allowance, and perhaps another personal allowance for buying the things you need for your work (this amount might be intended for buying scrubs or other equipment).
All of these allowances are actually separate from your standard pay. And they are not taxable. That’s a great benefit for you because it means you’re getting that money and not having to pay back any of it. The reason why is that they’re actually considered reimbursements for your expenses rather than a type of pay.
When you’re doing your taxes, these amounts do not get factored into the amount you pay in taxes. They won’t be reflected on the W2 that you get from your employer either. However, because you’re being reimbursed for those things already you also can’t put them on your taxes as a work expense.
Work Expenses as a Travel Nurse
When you work as a travel nurse you do have expenses, because you have to go to the physical location that you’re working in and only for a short period of time. Unlike a traditional nurse who would buy or rent a place to live on a permanent basis, you’re responsible for doing so on a short-term basis.
You also need to buy food while you’re traveling. In total, you may have additional expenses that include:
- Licensing fees
- Gas/insurance for car
- Health insurance
- Malpractice insurance
- Continuing education expenses
- Housing
- Internet/utilities
- Food
- Medical supplies/equipment
A combination of these things are generally considered work related expenses on your taxes, but this is where you’re going to need to take a look at your pay package.
When you sign your contract for a specific project you’re going to get that pay package that details what you’re being paid and how. The expense reimbursements or allowances that you’re given are already in there. That means you technically haven’t paid that money.
If your pay package includes a $1000 a month allowance for a place to live that means you can’t claim that rent cost as a work expense on your taxes because you’ve already been reimbursed for it. If you’re given a $200 allowance to purchase your work uniform you can’t also include that amount on your taxes because you’ve been reimbursed.
See how that works?
You would need to keep careful track of what you’re spending versus what you’re already getting reimbursed for. From there, you would be able to see just how much you can claim on your taxes.
Setting Up Your Tax Forms
Now, let’s take a look at what this could look like on your taxes.
First up, your W2.
You need to make sure you have all of your W2 forms together for any companies you worked for during the course of the tax year.
Not all companies send their forms at the same time, so make sure you have a record of everyone you expect a W2 from and make sure you have all of them before you fill out your forms (or you can fill out your taxes if the forms do not come in by the deadline).
You’ll need to account for the total amount of your income on each W2 form as income on your taxes.
Once you’ve done this, you’ll need to look at your expenses.
Consider all of the categories discussed above and see how much you’ve actually spent in each of them. Then, account for the allowances that were included in each of your pay packages. Did you still spend more money than you were given?
If you have expenses that are directly tied to your work that go over and above what you were given by the company these can be counted as ‘work expenses.’
Work expenses will count against the taxable amount of your income, which can save you money at the end of the year.
If you double-count your work expenses however, you could end up with trouble. So make sure you’re properly counting what you were allowed and also counting only those expenses that really do apply to your work.
Working with the Pros
In the end, filing your taxes can be complicated for anyone. For those who have less traditional means of employment it can be even more difficult. And that’s where travel nurses fall on the spectrum. So, if you’re concerned about making sure your taxes are done properly, hire a professional.
There are plenty of tax experts out there who can help you understand which expenses are going to count in your favor and how to account for anything and everything possible.
Your best bet is to keep all of your receipts and records of everything that you’re paying out over the year. Then, come tax time, speak with a professional about everything you have, everything you earned, and what you can do to make sure you’re doing everything right.
A professional will help you ensure you get the largest return (or the smallest bill) that you possibly can, while making sure it’s all done according to the tax law. Don’t make a mistake on your taxes that could cost you. Instead, make sure that this part of your travel nursing experience isn’t the one that ruins the whole thing for you.
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