The freedom of per-diem nursing work comes with increased financial responsibilities. Your employer does not automatically deduct taxes from your income, so you either handle your taxes on your own or with the help of an accountant. Navigating tax laws for travel nurses may seem daunting at first until you realize the benefits. Filing your taxes means that you get to select your write-offs. You would be surprised by just how many transactions can be filed under “work-related expenses.” Whether you are a 1099 nurse practitioner or a CNA, start writing off the following purchases to save on taxes in the incoming financial quarter.
On long assignments away from home, travel nurses are sometimes provided stipends to make life easier. Stipends are provided periodically throughout your contract, to cover costs related to temporary housing, meals, and other related expenses. The entire stipend is tax deductible, though the costs that qualify for a stipend may vary from agency to agency. Once you know said costs, keep all your work-relevant receipts as you work through your travel contract. Nurses also need to present proof of a “tax home” before their stipends can be filed as tax-free.
For the uninitiated, your tax home is essentially your regular place of residence and work. The IRS formally defines a tax home as “the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home.” For example: if you normally pick up shifts in Los Angeles, then LA itself would be your “tax home.” In this case, stipends are only deductible if they are spent while you work outside LA. This is a common occurrence for travel nurses, who often accept contracts that take them away from their primary residences for months on end.
Proof of tax homes includes (but is not limited to) rental contracts, utility bills, and other relevant household expenses.
Under current tax laws for travel nurses, contractors can deduct travel expenses. This is especially relevant now with gas prices surging by the day. As you drive between new assignments, be sure to keep track of the miles traveled in order. Parking fees and toll fees also fall under this category. Hang on to relevant receipts to make things easier on yourself. Some travel agencies will even provide travel reimbursement once you are finished with your travel nursing contract. This is also deductible, provided you show proof of a tax home.
Travel costs are only tax-deductible if they are incurred outside your tax home. The money spent going from your primary residence to your regular place or area of work cannot be written off in tax returns. You also cannot deduct taxes from non-work-related travel expenses. If you take a Grab from your workplace to a local strip mall, then the cost of the Grab is not tax-deductible.
1099 nurse practitioners can write off money spent on scrubs and lab costs, provided that they are not reimbursed by their facilities. Sometimes, you can also deduct expenditures for shoes you only use at work. If a hospital requires you to wear certain shoes, then your work shoes may also be considered tax deductible. Be sure to keep track of how much you spend on your work uniforms throughout the year.
Whether you are booking shifts through the VitaWerks app or communicating with patients through the phone as a tele-health nurse, nurses are using their internet and phones more often when they work. They can write off part of their internet and phone bills as long as they only list the portion used for work. To calculate this, estimate or keep track of how long you use the internet or phone services as you carry out your nursing duties. If you have a phone subscription entirely dedicated to work, you can deduct 100% of the bill.
In most states, nurses are required to fulfil continuing education requirements to maintain their licenses. As a result, CE course costs count as a tax break for healthcare workers in 2021 and beyond. However, any education that “prepares you for new employment” is not tax-deductible. This means that nursing students cannot file tuition costs on their tax returns.
Nurses who take longer-term stints in far-off places will typically spend a lot on short-term housing. Whether it is a hotel, Airbnb, or housing provided by your employer, housing and utility costs can pile up if you are not careful. Thankfully, these costs can be filed as tax write-offs for 1099 employees. This is especially true for those already paying for their primary residences, whether it is a mortgage or rent costs.
Leaving no stone unturned
Keeping track of all these expenses and receipts can be a major headache. Despite this, it is ultimately worth it considering just how much you can save on tax deductions. Some financial apps and accountants can help you navigate through the most difficult parts of the process. Provided that you report your income and expenses accurately, meticulously document relevant transactions and brush up on your area’s tax laws for travel nurses, you will dramatically maximize your earning potential.