It’s a new year and you know what that means don’t you? If you watch TV or read any daily newspaper you may notice the advertisements are geared towards tax preparation, and you’ll be seeing a lot of this until the tax deadline of April 18th. (The traditional tax return filing deadline is April 15 of each year, but the IRS has approved April 18, 2011 as the tax filing deadline for 2010 Tax Returns and extension requests in observation of Emancipation Day in the District of Columbia.) This time of year can be very stressful to many and may seem like quite the daunting task to a travel nurse who has worked in a number of different states and given so many various benefits, but this doesn’t have to be the case if you’re prepared.
“Some travel nurses may not be aware that there are numerous tax breaks associated with this career choice,” says Tera Tuten, director of operations for NurseJungle.com. “It can be extremely time-consuming to read IRS documents and decipher what applies and what doesn’t…”
If thinking about taxes gives you an ill feeling, fear not for there is help. Many websites on the internet and tax preparation companies can help you figure out exactly what you need to do to file your taxes correctly, and more importantly find you those many tax breaks afforded to a traveling nurse. In order for you to be eligible for deductions and breaks you must meet two very important criteria.
1. Tax Home.
A tax home is simply defined as the place where you reside for the majority of the year. This is your permanent residence—the home you return to between assignments. This is the residence that produces significant and recurring expenses, such as a mortgage or rent payment. By determining your tax home, you are setting up the groundwork for travel deductions because you can show that you are often leaving your permanent residence to travel to another location to work for an extended period of time. To show proof of your tax residence, it’s important to remember to:
- Maintain your driver’s license and car registration in your tax home state;
- Be a registered voter in your tax state;
- Maintain proof of your residence, such as mortgage documents and/or rent receipts;
- Return to your tax home at least once each year and file a tax return in your home state.
What if I don’t have a permanent residence? If you travel so much that you do not have a permanent residence (your housing at each assignment becomes your permanent residence), you are ineligible for travel deductions because, by IRS definition, you are a transient and aren’t truly traveling.
2. What is considered “temporary?’
Temporary, according to the IRS, is anything less than 12 months. If you worked in one assignment during the entire previous calendar year, you are not eligible for IRS deductions.
Once you’ve determined your tax home and have determined your travel nursing assignments were indeed temporary, it’s time to take advantage of the many deductions available for you.
So if you meet these two all important criterion, then you can expect to receive some hefty breaks when it comes time to file your taxes for 2010… As long as you have proof. Being a travel nurse, it is wise to save every receipt from any transaction that happened while you were on assignment, as long as it pertains to your job. Meals, travel, housing, and other work-related expenses are all eligible for deductions so long as you have the receipt. Other important documents you want to keep are your contracts from the staffing agencies. Whether you worked for one or many different companies, you’ll want to save the contract because it holds vital details that can make the tax process much easier.
If you’re feeling a bit overwhelmed, here are some sites to help you get your taxes in order.
Travel Tax – Featured in Healthcare Traveler magazine, Locum Life, PAN Travelers, Delphi Forums and National Public Radio. The company has 17 plus years experience in Travel Nurse Taxes. Started by a traveler for travelers. Starting this week, Travel Tax will be hosting a number of different tax seminars all across the country as well as audio conferences if you’re not able to attend the live sessions. To see the scheduled dates and times, visit Travel Tax tax seminars.
Download a Travel Nurse Tax Guide provided by Kobaly.com.
Take advantage of the Travel Nursing Tax Advantage Plan… Visit TravelNurseToolbox.com to learn more.
If all else fails, remember you can always consult your recruiter and their company for help with your taxes. Good luck!
The tax information contained on TravelNursingBlogs.com and from any communication related to this blog is for information purposes only. Please consult with your personal accountant or tax preparers for any matters concerning your own income taxes.