Tax season is upon us. The deadline to file is April 15th and along with filing taxes comes the messy paperwork and questions about your healthcare traveler benefits. While we can’t give you official legal advice, we can help you get the most out of your taxes when you’re filing.
When healthcare travelers have a permanent residence to maintain or return to between assignments, it may be possible to claim travel expenses. If you don’t have a permanent residence, the IRS classifies you as “transient” and you won’t qualify for healthcare traveler tax deductions. Maintain proof of permanent residency by filing taxes in your permanent state, maintaining car registration and driver’s license in your permanent state and keeping copies of your permanent state mortgage or rent.
Keep in mind that if you’ve worked in one state for more than 12 months, that state is considered your home according to the IRS, even if you have a permanent residence in another state.
As a healthcare traveler, you can minimize how much tax you pay by maximizing the tax deductions you may qualify for. These can include expenses for transportation to your new assignment, like driving your car, airfare, and hotel stays along the way. The same deductions can be applied once you finish your assignment and return home, or to your next assignment. You might be able to use deductions for meals and housing, depending on your reimbursements and the situation. Deductions can change annually, so keep this in mind when you file your tax returns next year.
Claiming travel expenses
After you establish a permanent residence, you may be able to claim travel expenses from that home to your workplace. This includes airfare, train or bus fare, car rental fees, travel accommodations, and meals. Keep receipts and records of these expenses and consider using a standard meal allowance to make things easier.
Claiming job expenses
You may be able to claim expenses required for your job. For healthcare travelers, this can include cost of licensing, cost of continued education, malpractice insurance, student loan interest, tech expenses, and cost of scrubs or uniforms. Be sure to research what you can and cannot claim when it comes to career expenses, as some of these may already be covered by employers.
State-by-state tax returns can be a lot to deal with as a healthcare traveler. You need to file state tax returns for each state you’ve taken an assignment in. Some states have different regulations and deadlines from others, so it’s important to gather your paperwork and go get a tax professional’s help. Since this can be a lot of paperwork and therefore a lot of time, it really is best to do it sooner rather than later.
Healthcare travelers can make tax prep time easier by keeping track of paperwork. Keep your receipts and paperwork organized, track expenses, and compile your travel assignment contracts for the year. Consider designating one credit or debit card or other method of payment for your travels. This way, everything is in one place, and it will be easier for you to keep records accurate and accounted for. Your receipts can include things like temporary housing, accommodation expenses while traveling, mileage, utilities, meals, uniform/scrub expense, and continued education courses and certifications.
Don't wait until the last minute to gather and organize your tax documents. You want everything in order so you can file on time. Filing your taxes on time is important—this isn’t like missing the previews in a movie theater. These are your taxes, and they’re a big deal. As soon as your W-2s come in, schedule a time to meet with your tax professional. Getting your taxes completed on time will help get you your return faster and can lower your chances of getting audited.
For many, this can be a stressful time of year, but these tips will make your annual exchange with Uncle Sam as painless as possible. Remember to speak with a tax professional to get details and more information and to make sure you are in compliance with federal and state tax laws. Additional information and resources can be found at www.irs.gov/