It will be tax time soon enough! As a travel healthcare worker, you will have certain considerations when filing your annual tax return. Moving forward, you can take steps to track all applicable information each year and make filing your taxes much easier. The best way to ensure you file your taxes correctly is to work with a tax professional, such as a Certified Public Accountant (CPA). Your staffing recruiter will also be able to help provide guidance and may have some recommended resources. Here’s what you need to know.
State income tax
As you travel for work, realize that every state has different established tax laws. Some states do not charge state income tax to travel healthcare workers (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming), but most do. Depending on the state in which you reside, you may be able to establish what’s called a reciprocity agreement and only be required to pay state income tax for one state. Agreements like these vary from state to state. You can learn more by speaking with the taxing authority in your home state.
IRS tax homes
If you establish a tax home, which is the state of your permanent residence while you travel, it can help you save money on your annual state income tax. This is because the IRS will allow you to claim tax deductions for non-taxable items, as long as you spend part of the year working from and maintaining a permanent residence. If you are a travel worker that spends your tax year traveling and you do not maintain a tax home, the IRS considers you an itinerant worker. This means you will owe taxes on non-taxable items.
Certain items and expenses are non-taxable for travel healthcare workers while on the road. These include stipends or reimbursement from your staffing agency for lodging or housing, taxi or bus fare, gas and mileage, parking, meals, tips, licensure fees or health insurance. Though you must claim reimbursements and stipends on your taxes, they are non-taxable and help to reduce your taxable income. Please note, if you are considered an itinerant worker, you will owe tax on reimbursements and stipends.
By working with your staffing recruiter, you will gain the information you need to properly file your annual tax forms with the IRS. He or she may recommend working with a CPA to ensure all tax laws are met, and this can help you avoid a tax audit. Also, if you are ever audited, your tax professional will have records of your tax documents and can usually take care of the audit for you.
How to make your life a little easier at tax time
By keeping track of the proper information during the year, you’ll be organized and ready to file your taxes. Help yourself out with the following:
- Keep a mileage log. Track how much you drive for each assignment and the fuel you use, if applicable.
- Maintain copies of your travel contracts. They must include the dates you began and ended each travel assignment. If you maintain a travel home, your contracts will help the IRS understand that you are a temporary traveler.
- Rely on the experts. Your recruiter will help you stay organized with your taxes and can recommend important steps for you during tax time. He or she may also help you find a tax professional that specializes in travel healthcare.
It takes time to adjust to a career that includes travel positions, but it’s nothing to be afraid of. With just a little practice and support from your recruiter, you can see the world AND stay on top of your taxes.
Looking for your next assignment?
MedPro Healthcare Staffing can help. We place travel nurses, pharmacists and therapists with positions across the country—and we’ll work with you for the information you need come tax season. To learn more, contact MedPro Healthcare Staffing today.