If you are a nurse who worked through the pandemic in 2020, first off, we wanted to pass along our thanks and gratitude from the entire IOOGO team. We know this year wasn’t easy but we hope we can make filing taxes a little less daunting. We’ll walk through what you need to know about filing your taxes as a contract nurse and which deductions should be top of mind.
Tax season can be a tricky one, especially for travel nurses, or 1099 contract nurses. This is also a group that is more prone to IRS audits due to the complexity of the paperwork. If your expenses are running high in relation to your earnings, you should be aware that this could result in potential targeting. Consider working with a tax preparer when you’re ready to file and we’ll help you ensure your documents are extra buttoned up.
As a travel nurse, you have a lot to manage. Keeping files of all of your contracts can be especially important. Digitize these documents to keep them for your records. You can even turn them into a PDF right from your phone by using a program like Adobe Scan. As a travel nurse, some other documents to keep record of are your mileage, receipts, housing costs while traveling, uniform expenses and other work-related expenses like continuing education fees.
Is Your Per Diem Really Non-taxable?
Make sure your per diem can be counted as non-taxable income. In simple terms, if you would be duplicating the same expenses in your travel city as you would as home, then the payment can be accepted as non-taxable income. You must also have a qualifying permanent residence or tax home. Tax homes can be deemed as such if you meet at least two of the following:
- Have a permanent residence in the area in which you hold financial responsibility for, even when you’re away.
- Maintain regular employment in the area of your residence.
- You spend at least 30-days per year in your permanent residence.
File In Every State That You’ve Worked
Now we’re getting to the tricky part. Traveling for work and receiving compensation in various states means you have to file for state income tax as well. If you worked in any of the nine states that don’t collect income tax, then good news, you’re in the clear. These states include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. If you do find yourself needing to file state income tax for multiple states, double check your records to ensure your income and expenses are documented on a per state basis.
When filing in multiple states, we recommend utilizing a professional accountant, like ones provided with our pro service. This will help you manage any discrepancies between states as tax laws can get tricky fast! Check-out our self-employed tax pro option starting at $199.99. You provide documentation and we prepare the rest. We also highly recommend adding on audit insurance for extra protection.