[suzanne4]

Originally Posted by fizz2Nurse

I respectfully disagree with the above. I have my taxes done by an IRS enrolled agent and there are specific rules.

If you are finding your own housing and the agency is paying you a stipend that is allowable under IRS Publication 1542, then you do not require receipts and your entire per diem amount is non-taxable. If you decide to find shared or skid row housing that is your own decision and does not affect the amount of taxable income. The stipend is paid in lieu of providing accomodation and is amended every year. Publication 1542 also sets the per diem reimbursement rates for meals and incidentals.

The IRS would more than likely question a ridiculously low taxable income. This might be a case where so much is considered per diem that you are only getting $10/hr taxable income. The IRS would compare that to "like" or similar people in the same line of work. If every nurse around you makes $30/hr then they probably won't think $10 is reasonable.



The other option is to receive your entire salary as taxable income and keep reciepts to deduct actual expenses. This requires a lot more record keeping.

I agree with what you have posted as well, but have seen thru the years people that have tried to get around things, and more importantly, agencies trying to do things that get the nurse in trouble with the IRS. IRS is always looking for red flags to tip them off with, and they expect receipts to back them up.

Lower than usualy pay is one, and the other is not having receipts. You still never know when they will ask for them, so always best to keep them and it is not hard to do that, they can be thrown in a box when you get home, then makes is easier for everyone around.

If you one does not have a tax home in another area, and they are getting the per diem, then it is not tax deductable and they will have to pay taxes on it as well as penalties and we are seeing more and more of this. Agencies promise anything and then people get caught in the middle. Also depends on how the agency sets up the housing payments as far as stipends.

Glad what works for you does just that, but it is not always the case and people need to be aware of it. That is what I am trying to get them to do and not just trust what their agency is necessarily telling them.

[fizz2Nurse]

Originally Posted by suzanne4

I agree with what you have posted as well, but have seen thru the years people that have tried to get around things, and more importantly, agencies trying to do things that get the nurse in trouble with the IRS. IRS is always looking for red flags to tip them off with, and they expect receipts to back them up.

Lower than usualy pay is one, and the other is not having receipts. You still never know when they will ask for them, so always best to keep them and it is not hard to do that, they can be thrown in a box when you get home, then makes is easier for everyone around.

If you one does not have a tax home in another area, and they are getting the per diem, then it is not tax deductable and they will have to pay taxes on it as well as penalties and we are seeing more and more of this. Agencies promise anything and then people get caught in the middle. Also depends on how the agency sets up the housing payments as far as stipends.

Glad what works for you does just that, but it is not always the case and people need to be aware of it. That is what I am trying to get them to do and not just trust what their agency is necessarily telling them.

Couldn't agree with you more. My last few assignments I've been shocked by the number of "travel" nurses taking tax free housing stipends that drive home every night. And they freely admit that it's a stipend but steadfastly refuse to believe that what they're doing leaves them open to a huge tax liability because some recruiter says they are ok.

Every travel nurse should consult a tax professional, not just a CPA, but a tax professional that understands the tax code and can keep them out of red flag or audit territory.

[suzanne4]

But still stand by what I did post above as well. The IRS still looks at what is customary for rents and costs of living in an area in determining what the per diem rates and the tax free stipends should be or could be. What a particular person decides to do with their money is one thing, but when things are not as they seem, then the government gets involved when one is trying not to pay their taxes.

If one is in a particular area and the average rent is $600 to $900 per month for an apt, and the agency is offering $5000 tax free for living expenses per month, they are going to have much explaining to do. On the other hand, if they are in the San Francisco area and a company is offering in the neighborhood of $3500 to $4000 per month, then that is within the ball park for the area when you add in utilities and the per diem. This is what I was talking about before and we see it all of the time, and the nurse is the one that gets into trouble, just as you have seen and have just posted about.

[fizz2Nurse]

Originally Posted by suzanne4

But still stand by what I did post above as well. The IRS still looks at what is customary for rents and costs of living in an area in determining what the per diem rates and the tax free stipends should be or could be. What a particular person decides to do with their money is one thing, but when things are not as they seem, then the government gets involved when one is trying not to pay their taxes.

If one is in a particular area and the average rent is $600 to $900 per month for an apt, and the agency is offering $5000 tax free for living expenses per month, they are going to have much explaining to do. On the other hand, if they are in the San Francisco area and a company is offering in the neighborhood of $3500 to $4000 per month, then that is within the ball park for the area when you add in utilities and the per diem. This is what I was talking about before and we see it all of the time, and the nurse is the one that gets into trouble, just as you have seen and have just posted about.

Again, the IRS publishes their acceptable rates. Therefore, they have already set that acceptable amount of reimbursement. It would be pretty hard for the IRS to argue that a "reasonable" amount is less than what they have already published as acceptable. The rules are clear.

Argueing that the IRS would suddenly say a smaller amount is appropriate doesn't make sense. Consider the mileage rate for 2007 was 48.5 cents/mile and your agency reimbursed you 48.5cents for the 500 mile trip. The IRS would not say that you were able to drive a Chevy Aveo there so you get less than the guy that drove his Ford 4x4.

Now if you are argueing the "big picture" scenario I wholly agree. Getting the max reimbursements and earning $7/hr as an RN is not reasonable. Thats when the decision to accept a stipend becomes a juggling act between what's a proper income and what's a tax dodge. The IRS would then look at your whole financial picture including the fact that you can't afford the $1400 month payment on your tax home and $500 car payment on $14 per hour.

[suzanne4]

I am arguing the big picture. Stipends that are completely out in left field can be checked by them and they are. Just as for the salaries that are no where near to what they should be.

I am speaking purely of reasonable amount in an area, and when I see nurses posting that they are getting a $3000 to $4000 stipend but only $12 or $13 in hourly pay, who is kidding who? The agency is happy with that as they have to pay less in taxes such as medicare portion or workmen's comp.,etc. Andf there are nurses that take their word for it that everything is just A okay. This is what I am trying to get them to stop accepting as being the right way to do things, and nothing more.

This thread was only started to give advice to new travel nurses what they should be aware of when getting a contract, and nothing more than that.

Rule One: if it sounds to good to be true, it usually is.

[suzanne4]

Per Diems and mileage reimbursments are published by the IRS; housing stipends are not posted. And there are those companies that will try and take advantage of someone.

[CardiacNP01]

A quick example to support the advice of this excellent post. In Jan of 1999, I had accepted my 2nd travel assignment with a "heart institute" in Miami Beach. (I'd be happy to tell you the name of the nationally known hospital organization if that's permitted...the company has changed their name since then) I was a CVICU nurse but of course agreed to float to any ICU...yet, I did not have the organzational skills for the floor...thus I was assured that their needs were in the ICU. My second night at work I was pulled to the floor....I promise, the following is absolutely true. The hospital's floor staff (we were told) had "walked out" or something along those lines. Thus, we had 4 travel RNs to provide total care for 48 pts per shift. No LPNs, No PCAs, No unit secretaries.... No joke. It gets better... although we were contracted to work 3 12hr shifts/week, we had two options.
1.) Work four shifts per week (and of course be paid). Two 16hr alternating with 2 12hr shifts OR
2.) Work every other night..split shifts.
I couldn't do the latter because my girlfriend was in Lakeland, Fl then on a travel assignment, which was about 4hrs from Miami Beach....(I was too stupid then to figure out the distance between the two cities before accepting the contract). Furthermore, even my young body then couldn't adjust to an every other night schedule...uuhhhh..
Now....what about the person who, over the phone, agreed to not being pulled to the floors?? Well, she was no longer employed there once I arrived.
As she said...GET IT IN WRITING. That experience on that assignment is the sole reason I was enrolled in graduate school the next spring.... and I LOVE being an NP!!

P.S. Excellent advice on the housing as well!

[CardiacNP01]

Suzanne wrote:
"If you one does not have a tax home in another area, and they are getting the per diem, then it is not tax deductable and they will have to pay taxes on it as well as penalties and we are seeing more and more of this. Agencies promise anything and then people get caught in the middle. Also depends on how the agency sets up the housing payments as far as stipends."


You are sooooooooo right about this Suzsanne.... I have a friend who has become a traveling nurse in recent months...prior to that she lived with her mother. Correct me if I'm wrong, but a tax home is one that you are paying a mortgage on (vs. living with your mother in her home free of rent)....am I wrong? The agency recruiter assured her that since she is living "in a home" (with her mother cost free) then her per diem is tax deductable. The assignment is out of state. I told her that the recruiter is either grossly misinformed or is lying to get her to sign on.... am I wrong about that? I'll gladly stand corrected if I am, but I would hate to have my friend get stuck with huge penalties.

Thanks!

[suzanne4]

A tax home is one that is where they list as having permanent residency, their driver's license is there, they are registered to vote with that address, etc. Banking is done with that address, etc. As long as the legal address is more than 50 miles from the work site and she is not commuting to the home at night, then she should be fine.

Many have homes that are already paid for, so a mortgage is not necessarily a requirement. Always best to check with a tax person.

The issue usually comes up when the nurse has purchased a home in one area and gets a travel job just a few miles away and the agency gives them the stipend for the housing, and states that it is tax free; that is where the bigger problems can occur and still see people believe all that is told to them.

[fizz2Nurse]

Originally Posted by suzanne4

Per Diems and mileage reimbursments are published by the IRS; housing stipends are not posted. And there are those companies that will try and take advantage of someone.

Uh, then what is the column under LODGING mean in the IRS publication?