As a travel nurse, you have very different taxes than a stationary nurse, and the filing process can be complicated. You might not know where to start working in different areas with varying amounts of taxes and rules.

So, we created a travel nurse’s guide to filing taxes with helpful tips that can make the process much easier. 

This guide will cover per diems, state taxes, the importance of your address, and more. After reading this, you will feel more prepared to file your taxes as a traveling nurse.

Key Takeaways

• As a travel nurse, you can qualify for non-taxable payments that you will receive from your agency to cover additional living expenses you incur while working. To claim them, you must prove you are paying duplicate expenses and claim a legal “tax home.”
  
  

• File a tax return for all the different states you worked in and follow each state’s specified rules and guidelines. When using tax software, read all instructions carefully to ensure you correctly fill out your multi-state return.
  
  

• You can consult with a tax advisor for professional help along the tax process. A tax advisor can help you navigate the complicated process and help you in gathering all the necessary information for your returns. 

1. Qualify For All Non-Taxed Incomes

As a travel nurse, you may spend a lot on hotels and food when on the job. If you are also paying for your original house, you end up paying double the living expenses. To help you with the extra cost of these duplicated expenses, most agencies will offer per diems.

Per diems are non-taxable payments that act as a bonus to your base pay. You want to qualify for as many payments as possible to get the most back from your extra expenses. The qualifications are as follows:

1. You can prove you are duplicating your expenses at home and work.

2. You can prove you have a tax home. 

The IRS classifies 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.” To qualify your home as a tax home, you must prove you are still paying for its maintenance and visit it at least once a year. 

Keep necessary receipts that can show you still pay the expenses of the home. You should also register your license, car, and voter registration in the state the home is in. 

If you meet both requirements, you can qualify for per diem payments from your agency. These non-taxable payments will help you cover the double living expenses you face as a traveling nurse. 

2. Pay Your State Taxes

As a traveling nurse, you may work in multiple states. In this case, you must file a non-resident tax return in every state you have worked in. In addition, to claim a tax home, you should file a resident tax return in the state of your permanent home. 

The national tax deadline is April 15th, so you should plan to complete your taxes before then. 

However, you may be able to receive an extension, given the numerous returns you must file as a traveling nurse. Each state will have different rules for its returns, so it is essential to know the exact amounts and percentages each state has in place for each return. 

3. Writeoff Expenses

As a travel nurse, you may be eligible for write-off expenses that you can deduct from your taxable income. Your specific eligibility will depend on the type of employment you have with your agency, but travel nurses can typically write off the following:

• Car mileage

• Rental Cars

• Uniforms and equipment

• Continuing education

• Licensing fees

• Travel expenses

• A portion of meal expenses

• Retirement/insurance contributions

• Utilities

• Cost of Internet/phone providers

4. Be Careful With Your Tax Software

Even when using the best software, filing your tax return will be more complicated if you have performed work in multiple states. There are complexities that you must understand and input correctly when filling out your return. 

Be sure to read all instructions carefully and ensure you input the correct information for each state. A multi-state tax return will also have certain specifications that you must provide. 

5. Keep Your Address The Same

If you file tax returns for multiple states, keep your permanent address the same and ensure your temporary and permanent addresses are distinguishable. It can be helpful to think of your travel as a vacation. 

You always keep your permanent address on vacation. A consistent, permanent address is essential to claim a tax home and qualify for per diems. 

6. Keep All Documents Stored In One Place

It is crucial to maintain all of your documents in a safe place. With these documents, you can clearly record your travel and any expenses incurred. A great way to keep all your files in one place is through digital software, like Trustworthy, an operating system where you can store and manage your important tax documents. 

The most important documents to keep for a travel nurse are: 

• All contracts

• A record of all mileage from traveling

• Most receipts (except food, groceries, and gas) 

These documents should be kept for six years to be prepared for an IRS tax audit if it ever comes.

7. Consult A Tax Advisor

We highly recommend consulting a tax advisor to any traveling nurse. Tax advisors can help you clarify your contracts and can contact necessary agencies or offices to gather information. If the process seems too complicated, a tax advisor can help you through the process and ensure you complete everything correctly. 

Wealth advisors can also help you plan your finances and set aside money for your taxes and other savings. 

8. Be Prepared For An Audit

As a travel nurse, you are more likely to claim high expenses and a low income on your return. The IRS might be suspicious about how you afford the expenses and request an audit. 

To prepare for an audit, we recommend maintaining close records of your contracts and expenses. Enlisting the help of a tax advisor can also help ensure you pass the audit legally and that your taxes are filed correctly.

Frequently Asked Questions

How much do travel nurses get taxed?

Travel nurses' income gets taxed at the same rate as any other profession. Due to the nature of their work, travel nurses end up paying much higher expenses for essentially two lives. 

Your agency will most likely refund the money spent on the extra costs of traveling through non-taxable per diems, however. 

Do travel nurses get taxed a lot?

Travel nurses get taxed only for their base income. The additional expenses they incur through traveling are partially funded back to them by their agency. These payments are not taxable or considered part of their tax return. 

Do travel nurses get double-taxed?

While travel nurses pay duplicate expenses for their life at home and traveling, they are only taxed for their life at home. The expenses they incur while traveling are not considered in calculating their taxes. 

Can I write off my car as a travel nurse?

As a travel nurse, you likely cannot write off your car itself as a deductible. However, you can write off your mileage, insurance, or gas expenses and deduct them from your taxable income. For this reason, keeping a close record of these additional expenses while traveling is essential. 

What if I don't have a tax home as a travel nurse?

If you do not have a legally recognized tax home as a travel nurse, you cannot receive any tax deductions specific to travel nurses. You also will not be able to receive any per diems or non-taxable payments from your agency. All expenses incurred while traveling may be taxable.