Self Employed
Being a traveling nurse can offer freedoms that make it appealing to many. You generally get better pay, and you get to travel to new and exciting places. You live in a house or hotel you don't have to worry about cleaning and maintaining in the long term, and if you want to you can eat out every day of the week. But travel nursing does come with a few financial pitfalls unless you're smart about handling your tax deductions. So let's take a look at a few tax tips for nurses, and the most common things you can deduct.
First, Why Do Traveling Nurses Need Tax Deductions?
Often, traveling nurses get hired as an independent contractor as opposed to being a full-time employee. The difference means you're accountable for all of your tax payments and all of your travel expenses. You can reduce those tax payments by using deductions to reduce the amount of your income that qualifies as taxable by merely accounting for the business expenses associated with your job. Some traveling nurses work as full-time W-2 employees for nursing staffing companies, but even if you do your employer may only reimburse you up to a certain point. Tax deductions are where you cover your bases for anything else.
Non-Taxable Stipends for Meals and Incidentals
As part of your traveling nurse pay, you'll either be given a stipend for meals and incidentals or told to cover your meals and incidentals out of your salary. Generally, if you have an allowance, you can deduct the entire cost of it from your taxable income when you're filing your taxes. If your contract doesn't explicitly outline a stipend, you may need to itemize your costs for meals and incidentals to deduct the exact amount on your taxes. Either way, keep your receipts. You want to be able to easily track and prove your deductions in the event of an IRS audit.
Housing/Lodging
Traveling nurses often have many options for housing, many of them determined by the length of the stay. You may stay in a hotel, rent a house in the short term, rent an apartment on a short-term lease, or put up in extended stay housing provided either by the hiring company or by a third party. Temporary housing generally can rack up costs for rent, possibly even for utilities depending on your situation. Luckily you can deduct these expenses on your taxes, especially if you're also paying rent or a mortgage on your permanent residence (see section on tax homes).
