Just like clockwork, it’s tax season again.
Which, for traveling healthcare workers, can sometimes get a bit confusing. For many travelers, 2021 was a great year financially, and some pay packages were different from traditional travel professional pay – further complicating the travel healthcare tax scenario.
While higher earning potential is certainly one of the main attributes of being a traveler, there are also potential tax benefits. But figuring them out – since many are complex and counter-intuitive – can make your head spin.
But have no fear—tax season doesn’t have to be a migraine headache waiting to happen. Here are five suggestions to help travelers get through it:
Be Aware of Your Tax Home
According to Investopedia, a tax home is “the city or general vicinity where a primary place of business or work is located, regardless of the location of a residence. The IRS considers an employee to be traveling away from home if his/her business obligations require him/her to be away from a tax home for a period longer than an ordinary workday.”
When it comes to travel healthcare professionals, tax homes aren’t necessarily what you officially call “home.” They’re more of an economic home base that allows you to make sure the way you travel for work is accurately represented to the IRS. Establishing a tax home allows you to take deductions for travel expenses to other cities or states while keeping the untaxed income in your contract untaxed.
Don’t Forget your State Income Taxes
Have you worked in Alaska, Georgia, California, then Colorado? The great part of being a travel pro is you get to move all over! At tax time, though, you’ll face a downside: filing a return for every state.
How much you’ll pay in each state depends on a lot of factors. States may also have special laws pertaining to traveling workers. Check out these 10 Tips for People Working and Living in Different States.
Keep Those Receipts
No matter what the current tax law or your individual tax situation may be, it’s important to keep receipts for seven years to justify your reimbursements. Even though the latest tax law has done away with many of the itemized deductions commonly claimed by traveling healthcare workers prior to 2018, you could be required to show receipts that were used to calculate your deductions in previous years.
Hire a Tax Professional
You’re a trained medical professional, not a tax accountant. So even if you’ve been doing your taxes without being audited, new tax laws can be confusing for even the sharpest individuals. A certified tax professional has a much better understanding of tax laws and will accurately compute your tax bill or refund based on all current tax requirements. In addition, a good tax professional can advise you on how to minimize your taxes in the future.
Check-in with your Recruiter
A good healthcare recruiter does more than find jobs for travelers (as important as that is). They should also be extensively familiar with the travel healthcare industry – providing advice and info on filing your taxes on time and correctly.
At Focus Staff, we understand the ins and outs of traveling healthcare professionals and have access to a wide variety of excellent professional opportunities locally or around the country. To learn more, contact us today.