Taxes

What Do Travel Nurses Need to Know About Taxes?

Linzi Martin

What began as a solution to nursing shortages in the 1970s has quickly become an exciting career opportunity within the RN community. Recently, the demand for travel nursing has nearly tripled due to hospital shortages across the nation. While the pandemic and economy have certainly played their part in requiring more travel nurse positions, this nomadic work life  has long been admired within the healthcare industry. If you’ve been considering the switch from a staff nurse to a travel nurse, here’s what changes to expect and how it will impact your tax deduction this year.

What exactly does a travel nurse do?

Contrary to full-time staff nurses, travel nurses are registered health care professionals who work in short-term roles at hospitals, clinics, and other healthcare facilities. On average, travel nurse assignments last for a duration of 13 to 26 weeks. Then again, contract extensions are not uncommon, especially during crises like the COVID-19 pandemic. As a travel nurse, you fulfill any open position at the time by signing a contractual agreement with an agency. While the assignment sounds fun in nature, there’s one major advantage — more money! When demands are high, the average travel nurse salary is $3,500 or more.

Is it hard to become a travel nurse?

With everything that’s happened in the last few years, travel nursing has become more accepted across the nation. As a result, the average pay for travel nursing has increased significantly. In normal times, a travel nurse could earn as little as $1,600 per week. Now there are some package offers giving RN’s a whooping $10,000 per week for a 13-week assignment. We’re sure travel nursing sounds pretty enticing by now, but there are a few caveats to becoming a travel nurse.

The odds of landing an assignment will come down to the following four factors:

  • Location
  • Specialty
  • Shift assignments
  • Current events

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How do travel nurses handle taxes?

Due to the nature of travel nursing, it can cause a lot of confusion when tax season comes about. The new tax law shifted the way travel nurses now file a return. Simply put — deductions are no longer an option. This means you cannot deduct business expenses such as food, mileage, or gas on your yearly tax return. Trust us, we know this doesn’t sound ideal. With a mileage deduction out of the question, you’re probably wondering how travel nurses can afford the added living expenses. On top of that, very rarely do travel nurses get to file as an independent contractor.

You’ll be glad to know there are two tax-exempt options for travel nurses nowadays, keeping in mind local and federal tax laws. Apart from negotiated base pay, travel nurses receive a compensation package in one of the following forms:

Stipend

A stipend is a fixed amount that is paid periodically over time. In the event of travel nursing, stipends are given to cover eligible “duplicated expenses”, which include housing, meals, and other incidentals.

Reimbursement

A reimbursement is a business expense that you have to pay for upfront and your employer pays you back. In this event, you’ll want to keep records of invoices and receipts for tax purposes.

In truth, the only way to really snag a stipend or reimbursement is if you’re working away from your designated tax home. The IRS defines this term as “the city or general vicinity where a primary place of business or work is located, regardless of the location of residence.” All said and done, just make sure you qualify for tax-free per diems before committing to a travel nurse role. Talk with your agency about stipends or reimbursements ahead of time.

Is being a travel nurse worth it?

For the sake of adventure, travel nursing is without a doubt worth the experience. Not to mention, you’ll be helping thousands of patients through the process. But apart from fulfilling a certain gap, chances are you’ll learn a thing or two by stepping outside of your comfort zone. With all of this in mind, it’s important to note that every hospital, clinic, or healthcare facility operates differently. You can’t go into a contract expecting things to be just as they were in your previous position as a staff nurse.

Above all, make sure you read the fine print with a fine tooth comb before signing any agreement. Though travel nursing is an advantageous experience, in most cases you’ll have to leave your home base for long period of time. That alone can stir up mixed emotions. That is why the team at MileIQ developed this travel nurse guide for 2022. If you’re thinking of embarking on your next travel nursing adventure, here are some pointers to consider:

  • Read, then reread, your contract. Make sure all agreements are being honored, including your reimbursement or stipend.
  • Discuss travel nurse housing. Will your stipend cover the costs?
  • Taxes. Without important deductions like mileage tracking, make sure you are getting reimbursed for all duplicated living expenses.
  • Research your destination. Will you be comfortable living there? Check out the social scene, activities, and other important factors to your work-life balance.
  • Talk with a fellow RN who has performed a travel nursing assignment. Weigh the pros and cons with someone who has experience in the field.

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