Disclaimer: This article is for informational purposes only and should not be taken as professional tax advice. Always consult your own CPA or tax preparer for tax advice.
Tax season is in full swing, and although it’s a time of year that many people dread, the truth is, you don’t have to be afraid of filing your tax return. If you take time to prepare your paperwork ahead of time, work with a Certified Public Accountant (CPA) that you can trust and have a good line of communication with, and stay updated with tax tips for nurses, you may just find yourself pleasantly surprised come tax-time.
So while you deliberate how you’re going to spend that tax refund, you can brush up on some of the tax tips that nurses and travel nurses need to know about.
Top Tax Tips for Travel Nurses and 1099 Contractors
One of the most important things you can do is find a professional CPA or tax preparation professional who is familiar with working with Registered Nurses. It can be helpful to ask your coworkers for recommendations or do a quick online search for CPAs who specialize in working with nurses.
1.) Save all documentation
If you are a travel nurse, who is taxed as an independent contractor (1099), the tax rules will be different than nurses who are W-2 employees. Not all travel nurses are independent contractors. But, if you are, you should keep receipts of everything you pay for as a travel nurse, including:
- Internet and phone fees
- Rent (or your housing stipend costs)
- Travel, including mileage and vehicle upkeep expenses
“Documentation is KEY to start at the beginning of the year for travel nurses or nurse contractors,” says Tracie Jackson RN, BSN, a tax professional with Tax Savvy Nurse. “This will help make sure you can get all deductions owed to you. Keep records in a binder or expense tracking app such as all travel contracts, distance to travel to and from assignments, meal receipts, etc.”
2.) Report all income
If you happen to do any side work as a nurse (such as writing or consulting,) always remember, even if a company or client that you have worked with fails to send you a 1099 or W2, it is still your duty to report that income and pay any applicable taxes on it, so keep careful records of all income you receive, no matter how small it is.
3.) Max out retirement contributions
“If you are a nurse with little to no deductions, consider maxing out contribution to pre-taxed retirement accounts such as an IRA,” she suggests.
4.) Start a small business
“If you’re able to, start a small business so you can not only generate additional income, but in many cases can allow them to start taking advantage of tax deductions as a business owner rather than just an employee,” she says. “ I help nurses do this every day.”
5.) Consider if a 1099 can give you more deductions
“Sometimes nurses who are working in home health, contractors, or who work from home can ask if they can be paid via a 1099 so they can be allowed more tax deductions,” Jackson explains.
However, she warns that you have to be cautious with this strategy, because choosing to be paid via a 1099 means that you are also responsible for sending your tax payments in to prevent from having a big tax bill at the end of year. “You will want a tax professional to help you execute this plan,” she says.
6.) Beef up agency expenses
“Travelers may be able to ask for higher reimbursement for travel and other associated expenses from their agency,” she says.