Many people are surprised to learn that travel nurses are considered employees for tax purposes. In this blog post, we’ll explore the specifics of how travel nurses pay taxes, including tips for avoiding common taxes and penalties. If you’re a travel nurse looking to save on your taxes, read on to learn more about the ways you can do so.
Travel Nursing Tax Deductions
As a registered nurse traveling for work, you may be eligible for a number of tax deductions when filing your tax return. A travel nursing tax deduction can help offset the costs of lodging, food, and other expenses incurred while on the road. There are several different deductions available to travel nurses, so it is important to speak with an accountant or tax preparer to see which ones are best suited for your individual situation.
Some common travel nursing deductions include:
-Lodging: Traveling nurses may be able to claim the fair market rental value of their lodging as a deductible expense. This means that you don’t have to itemize your deductions in order to take advantage of this perk.
-Food: Many travelers enjoy dining out while on the road, but this can add up quickly. If you’re deducting meal expenses, make sure to keep track of the specific costs associated with each meal (e.g., amount paid for food, tip).
-Transportation: Most travelers will need to use some form of transportation in order to get around while on the job. This could include car rental costs, public transportation fees, or even taxi fares.
-Other miscellaneous expenses: Other common items that might be deducted during a tax season include clothing and internet bills. It’s important to consult with an accountant or tax preparer in order to determine which travel nursing deductions may apply to you specifically.
Travel Nursing Tax Withholding
When a travel nurse completes their initial training, they are required to complete an IRS Form W-9. This form requests information such as the traveler’s social security number, filing status, and income. Once this information is received, the travel nurse can begin to pay taxes on their behalf.
Travel nurses who are hired by a hospital or medical center must withhold income taxes from their wages. This withholding is done through the IRS’ e-File system or a state tax agency depending on where the traveler resides. The amount of tax that must be withheld ranges from 8 percent to 22 percent based on the traveler’s income level.
Once all taxes have been withheld, the travel nurse must submit a Employer Identification Number (EIN) along with Form 941 for Social Security and Medicare taxes, if applicable. These forms are then filed with the IRS together with Form W-2 wage statements for individual travelers.
Travel Nursing Tax Credits
As a traveling nurse, you may be able to take advantage of tax credits and deductions that can reduce your taxes. Here are six common tax credits that travel nurses may be eligible for:
The Earned Income Tax Credit (EITC) is a federal income tax credit that provides relief to low-income families. The EITC can help reduce the amount of taxes you owe by as much as $6,857 per family member in 2018. To qualify, you must have valid Social Security numbers and meet other income requirements. You can find more information on the EITC website.
The Healthcare Tax Relief Fund (HTRF) is a federal government program that helps offset the cost of healthcare expenses for qualified individuals and families. To qualify, you must be enrolled in Medicaid or Medicare, have income below certain thresholds, and use health insurance obtained through an employer or government program. You can find more information on the HTRF website.
The American Opportunity Tax Credit (AOTC) is a federal income tax credit available to students who have earned college degrees or who are enrolled in college full time and are working towards a degree. The AOTC can provide up to $2,500 per year in 2018 dollars for eligible students. You must be filing your tax return as an individual taxpayer and meet other eligibility requirements. You can find more information on the AOTC website.
The Child Tax Credit (CTC) is a federal income
Conclusion
As a travel nurse, you may be wondering how you will pay taxes on your income. The IRS has specific guidelines for travelers and tax-exempt organizations, so it’s important that you know what to expect if you’re in this situation. There are a few things that every travel nurse should know about paying taxes, such as filing status and whether or not your earnings are considered taxable income. If you have any questions about paying taxes while traveling, don’t hesitate to reach out to an accountant or the IRS website.
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