As a travel nurse, you have the opportunity to work in a variety of locations and earn competitive pay. However, working as a travel nurse also comes with unique tax implications that you should be aware of. In this blog, we’ll discuss the tax implications of working as a travel nurse and what you need to know.
One of the most important factors to consider as a travel nurse is your tax home. Your tax home is the city or area where you work and live for the majority of the year. It’s important to establish a tax home to ensure that you’re eligible for certain tax deductions and benefits.
As a travel nurse, you’ll incur expenses related to travel, lodging, and meals. These expenses can be deducted on your taxes if they’re considered ordinary and necessary for your job. To qualify for these deductions, you’ll need to keep detailed records and receipts of all expenses.
When you work as a travel nurse, you may work in multiple states throughout the year. This can create additional tax implications, as each state has its own tax laws and requirements. It’s important to understand the tax laws in each state where you work to ensure that you’re filing your taxes correctly.
Per Diem and Taxable Income
Per diem payments are a common way that travel nurses are compensated for their travel and living expenses. Per diem payments are tax-free up to a certain amount, as long as you meet certain criteria. However, any per diem payments you receive beyond the allowed amount are considered taxable income.
Travel nurses often have the opportunity to contribute to retirement savings plans such as 401(k)s or IRAs. These plans offer tax advantages, as contributions are made with pre-tax income. By contributing to a retirement savings plan, you can reduce your taxable income and save for your future.
In conclusion, working as a travel nurse comes with unique tax implications that you should be aware of. It’s important to establish a tax home, keep detailed records of your travel expenses, understand state tax laws, and be aware of the tax implications of per diem payments. By understanding these factors, you can maximize your tax benefits and ensure that you’re filing your taxes correctly.