Top Tax Season Tips For 1099 Nurses
Full disclaimer: This article only provides information. This should not be seen as a substitute for professional financial advice from a tax preparer or certified public accountant.
Tax season is slowly approaching. For per-diem nurses especially, this could be a time of massive headaches.1099 contract employees (or independent contractors) play by different rules, compared to standard W-2 workers.
This might sound daunting, but it does not have to be.. Provided that you are prepared ahead of time, and you know who to talk to, things can be way less stressful.
Before you get lost in all the busywork and calculations, here are a couple of tips for nurses, this tax season.
File all your income sources
Leave no stone unturned. As an independent contractor ,you want to report all your income within a year.
Record all your pay-checks from every shift you take. If you have a side business or another job like tutoring or writing, be sure to file this as well. Be thorough and be responsible, when you file your taxes.
Save all your receipts
Since you are filing your own returns, you are also responsible for listing tax-deductible costs. Because of this, you want to save all your receipts whenever you incur a work-related expense,
Just to list a couple examples, here a number of commonly-deducted nursing costs:
- Work shoes
- Licensing fees and continuing education costs
- Educational expenses (tuition, subscriptions to medical journals, etc)
- Commute costs for going to work
- Travel expenses
For nurses with few deductible costs, a maxed out and pre-taxed retirement fund helps greatly.
If you list too many deductions that are only tangentially related to work, you may find yourself in trouble. When you are filing deductions, be sure to consult with your financial advisor every step of the way.
Take advantage of student credits
Students who are not dependents can still take advantage of special tax deductions. There are three credits you can cite on your tax returns: Lifetime Learning Credit, American Opportunity Credit and tuition fees or student loan interest.
Be sure to consult a qualified expert, before you put anything on paper. Keep in mind that only one deduction can be filed under education.
Record your income and expenses safely
You want your records to be accurately maintained, easy to access and secure. If you are tech savvy, you can file your expenses and income on an excel spreadsheet. There are also a number of apps available to you, for all your tax related needs.
If you feel unsafe about storing your tax files digitally, then be prepared to store all your income slips and receipts. A neatly-organized binder will help, even if it is cumbersome.
If you want extra security, you can take photos of all these documents and store them in a folder on your phone or computer.