Here at Trusted Health, we know that navigating the intricacies of taxes for multi-state healthcare professionals can be daunting. That's why we've partnered with the founder of TravelTax, Joseph Smith, EA/MS Tax, to bring your clear, comprehensive insights into your tax obligations as a healthcare traveler. Joseph is a former Respiratory Therapist and healthcare traveler turned tax expert and the visionary behind TravelTax.
Our Q&A session with Joseph was packed with tax knowledge and insightful questions from our healthcare traveler audience. Keep reading for a glimpse into what we covered!
What is a Tax Home?
A tax home, or tax residence is your principal place of work income, where you make your money. Tax laws provide exceptions for mobile professionals who duplicate their expenses for maintaining a primary residence, as well as their lodging while they are away from home working. As a traveler, you could have multiple different locations where you are duplicating expenses throughout the year. You are allowed to be reimbursed for your expenses at the second residence in which you work (via stipends for lodging and meals), if you are duplicating your expenses to maintain a second place of residence to fulfill your work duties.
Multi-State Tax Complexities
Common Myth: Is there a 50-mile rule?
No. Ultimately, you have to be working far enough away from home that it would require you to obtain lodging to rest/sleep at the assignment location, meaning that you’re working too far from home to reasonably drive back and forth each shift.
What is the 12-month rule?
It is recommended that you take a 7-12 month break from assignments in the same geographical or commutable area in order to avoid shifting your tax home to this new location. Try to avoid working more than 12 out of 24 months in the same area.
What is the 30-day rule?
Based on IRS guidelines, the best practice for traveling professionals is to return home for at least 30 days within a 12-month period in order to show that they have not abandoned their tax home. The 30 days that you are home do not have to be consecutive.
Will I be taxed in the state in which my travel agency is located?
Your travel agency’s location is not pertinent to filing your personal taxes.
Extensions
The nomadic lifestyle of travel nurses and allied health professionals can sometimes make it challenging to file taxes by the standard deadline. Therefore, seeking a tax extension can be a prudent strategy. It's crucial to understand that while an extension grants additional time to file your tax return, it does not postpone the due date for any taxes owed. However, securing an extension can help you avoid penalties associated with late filing if you anticipate owing taxes.
Deductions
Under the existing tax reform laws, set to be updated in 2026, most travel nurses and allied health professionals cannot claim tax deductions for work-related travel or job expenses on their federal tax returns. This restriction applies unless you're classified as an independent contractor or if you're filing in certain states that still permit these deductions despite the federal limitations. It's important for healthcare travelers to be aware of these nuances to navigate their tax obligations effectively.
Proactive W2 Correction Strategies
- Verify Early: Upon receiving your initial pay stub, promptly review it to confirm that the withholding amounts align with your expectations. Addressing discrepancies early can prevent complications down the line.
- Immediate Action: Should you spot any inaccuracies, reach out to your agency to rectify the situation. Proactive communication ensures issues are resolved swiftly, sparing you from potential headaches during tax season.
- Documentation is Key: Adopt the medical adage "if it isn't documented, it didn't happen" for your financial records. Preserve all receipts, favor electronic payments for traceability, and keep a comprehensive collection of your pay stubs. Meticulous record-keeping is your first line of defense in the event of an audit, ensuring you have the necessary evidence to support your tax filings.
Wrapping Up: Your Path to Tax Clarity
We hope this session has illuminated the path through the complexities of tax season for traveling healthcare professionals. Should you feel inspired to dive deeper with Joseph Smith and his knowledgeable team at TravelTax, remember to leverage your exclusive Trusted Community benefit. Use the discount code Trusted10 to enjoy a $10 reduction on your tax consultation—a small token of our appreciation for your dedication and hard work.
Tax season, while daunting, doesn't have to be a journey you embark on alone. Our curated resources are designed to guide and support you every step of the way. Be sure to check out our Travel Nurse & Allied Health Tax Guide - your comprehensive handbook for navigating tax season, tailored specifically for healthcare travelers.
Remember, staying informed and prepared is the key to a stress-free tax season. We're here to support you with the resources and expert advice you need to tackle your taxes with confidence.
