 
 
 |
 |
Nursing, Oct 2003 by Hicks, Dennis E
Travel
Exactly how does the Internal Revenue Service
(IRS) define a traveling nurse? What is a travel "assignment"?
What are the benefits and pitfalls of traveling?
One thing all traveling nurses have in common
is that they're traveling from somewhere when they
take a travel assignment-a permanent home from
which they're traveling. That permanent home is
their tax home-a residence they return to on a
regular basis to live and work and the place where
they incur substantial and recurring expenses,
such as mortgage or rent. Showing proof of that
residence establishes your traveling assignments
as temporary leaves from your permanent home, which
in turn establishes your tax status. Typically,
you'll need to do the following:
1. Retain proof of payment you make to someone
back home to show that you're maintaining a residence,
such as mortgage or rent.
2. Stay registered to vote in your home state.
3. Keep your driver's license from your home state.
4. Keep your car registered in your home state,
if possible.
5. Make sure you return to your permanent home
at least once a year. Working a few shifts in a
facility while you're there reinforces your status.
6. File a Residence Tax Return with your home state.
Tax benefits of traveling
Having established that you're traveling from
your permanent home buys you some great tax breaks.
Your travel assignments become temporary leaves
from home, defined by the IRS as less than 12
months' duration. While on a temporary leave
from home, you're eligible to deduct temporary
living expenses. What does that include? Housing
becomes a write-off as do your meals; you can
deduct a daily meal allowance as an expense.
Amazingly, you can actually deduct a certain
amount for meals each day and not even worry
about keeping receipts if you use per diem tables.
Other deductions can include:
* RN license fees (all states)
* dues and subscriptions (AAA, nursing publications)
* malpractice insurance
* continuing-education expenses
* uniforms, including dry-cleaning expenses
* work shoes
* computer
* Internet expenses
* cellular phone
* long-distance calls
* parking fees and tolls
* job search costs
* hotel expenses while driving to and from home
to different assignments
* travel mileage from home to an assignment and
other assignments during the year. (Mileage to
and from work while on assignment is considered
commuter mileage, so it's not deductible.)
Obviously, this is a very good tax deal, but
there also are some pitfalls. State taxes are one
example. Every state has different laws, and you
must file a return as a nonresident in every state
that you work in as well as the state that's your
permanent tax home. For most travelers, that means
filing in at least two states, which may or may
not have reciprocal agreements with each other.
If they do, you get credit in one state (typically
your tax home) for taxes you pay in other states
you worked in, the idea being that you don't have
to pay taxes on the same wages twice. Most nurses
end up owing taxes to their home state, even if
they didn't work there.
What are some of the most commonly held misconceptions
travelers have? That they can deduct moving expenses
(you haven't really moved if you're only on a temporary
leave from your permanent home) and can continue
to take advantage of traveling tax benefits when
they've been working on the same assignment for
more than the 12 months the IRS limits temporary
leaves to.
Obviously, there are some tremendous financial
advantages available for traveling nurses. The
more you know about your tax situation and how
to comply, the better you'll be able to maximize
your travel experience.
Dennis E. Hicks operates Hicks Financial Services
in San Diego, Calif.
Copyright Springhouse Corporation Oct 2003
Provided by ProQuest Information and Learning Company.
All rights Reserved
Read
More
|
|
| |
|
|
