You’ve just finished your 2021 travel nurse taxes, or you got fed up and filed an extension, either way – you at least have a basic understanding of how difficult it can be to file travel nurse taxes as a travel nurse who has worked in (and has to pay income tax in) several different states while at the same time calculating taxable and non-taxable income.
Perhaps you got super lucky, and got a little money back, or just a little lucky and didn’t owe. Or this was not your lucky year at all – and you now owe a whole bunch. Whatever the case may be: you may have asked yourself – could I have paid less?
The answer is a very likely: YES
Here’s the thing, taxes are C O M P L I C A T E D for everyone, but especially travel nurses. Which is why those do-it-yourself tax websites, like TurboTax, are so successful. They’ve taken a very complicated process and made it easy. Easy – that is – if you don’t have a unique tax situation. If you do – it is very likely you’ll pay taxes, not know of the potential write-offs, possibly do them all wrong – and could be subject to an IRS audit later on.
Why are travel nurse taxes so complicated?
Here is a quick summary:
- As a travel nurse you have to file taxes in every state you worked in. But there’s an exception for those states that have a reciprocal agreement with the state in which you live
- If you don’t have a permanent residence, you will not qualify for travel nurse tax deductions
- If you have a permanent residence, but worked in another state for more than 12-months – that other state is now considered your legal permanent residence
- That little number you’ve been seeing on your paystub, might be a blended rate, and you will not have to pay income taxes on that full amount
- You can’t claim a tax home, without proving you live there. You will need copies of things like a mortgage or rental agreement
- Your costs of travel to and from any assignment are tax deductible
- Costs related to your job, such as licensing fees, phone, internet, etc., are also tax deductible
- Anything you deduct on your taxes, you will need to prove in the form of a receipt
Download our FREE Travel Nurse Tax Worksheet!
Could you be audited for doing your travel nurse taxes wrong?
The answer is: yes. In fact, the travel nursing industry (especially over the last couple of years) has been scrutinized very closely by the IRS. This is especially true if you show that your expenses are high, but your income is low: which can often be the case when your tax free travel stipends (which do not count as income) make up over one half of your take home pay.
Let’s just say for example you own a home, and your mortgage is $5,000 a month. But your taxes state that your income (which would just be your hourly rate and not your tax-free travel stipends) is only $2,500 a month. That’s going to send a red flag to the IRS – and subject you to a possible audit. So you want to be extra careful that you’re filing your taxes correctly. The best way to do this? Through a certified tax professional who specializes in taxes for travel nurses.
How To Find a Good Tax Attorney: Nurse Edition
Is your travel nurse tax professional qualified?
When looking for a certified tax professional you’ll want to make sure they’re of course qualified. That means having one of two qualifications:
- They’re an “Enrolled Agent.” An Enrolled Agent is someone who not only does tax preparation and gives tax advice, but is also licensed by the IRS to support you in the event you get audited.
- They’re a Certified Public Accountant (CPA). A CPA will not only be able to prepare your taxes, but will act as your financial tax planner to help you prepare and plan for future taxes. Services they offer include bookkeeping, long-term financial planning and tax strategies.
Is your travel nurse tax professional available?
The last thing you want is a tax professional in your life that ghosts you once your taxes are done. Once you get into it and really start to take a good hard look at your finances & tax situation, you’re going to have many questions throughout the year. Especially as a travel nurse who travels to different states, works more hours, or less hours – you’ll want to be able to check-in with your tax professional with any questions as they pop up.
Is your travel nurse tax professional personable?
Like any relationship – you want to find a tax professional that “gets you” and takes the time to understand your needs. Never work with anyone that doesn’t provide a free consultation. And in that consultation pay close attention to the questions they ask you. Did they ask about you? Your family? Your financial goals? If they just throw a bunch of forms at you and call it a day: run.
A great tax professional will not only help you with your taxes but will also ask you the questions you didn’t even think to ask. How can you adjust your paycheck withholdings so you’ll owe as little as possible come next tax season? What are the pros and cons of making your nursing side hustle a bit more full-time? Would you be better off setting yourself up as an LLC or an S-Corp? These are all questions that someone who has taken the time to get to know you and what your goals are: will ask.
Does your travel nurse tax professional have time?
Just like you may know exactly what CAB, CBR, or WNL mean and will take the time to explain all the ins and outs of nursing to a first year nurse – a tax professional will also take the time to give you a “Taxes 101” course to help you understand terms like deduction, itemizing and adjusted gross income. No matter how basic your questions might be – a true tax professional will always take the time to explain things in a clear and simple way. If they don’t – move on – and find someone who will.
Is your travel nurse tax professional proactive?
When your taxes are finalized you’ll want to have someone in your corner that will explain exactly what happened line by line. If you got a huge deduction or owed a ton: they should explain why and walk you through the steps for what you can do in the coming tax year to avoid both those pitfalls.
Has your travel nurse tax professional established?
You’ll want to work with someone that has an established business and will be around to help you with your taxes year after year. This way you won’t have to start over with a brand new person the following year – and have to explain everything all over again. This will also instill a sense of trust: knowing they’ve been in business for a while. You don’t want to share your personal financial information with just anyone! If you can find a reference from a fellow RN: all the better.
Editor’s Note: Next Move Inc. are not tax professionals. Please consult with a professional tax accountant to discuss your individual tax needs.
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