For those without a taxhome

  1. My lease is up in april of next year, I wanted to know if its better to keep my stuff in a storage or get another apartment. This apt is costing me 1000 a month to keep and i am tired of it. If i dont have a tax home anymore, i would still have a permanent resident address but how will i be paid. Do you get a higher pay rate and forego the pier diem and stipend or do you take the stipend and have it taxed. I was trying to see which option would work better. thanks
  2. Visit sweetgurly25 profile page

    About sweetgurly25

    Joined: Jan '12; Posts: 205; Likes: 36


  3. by   NedRN
    Well, what do you get from the IRS if you have a tax home? Lets say you conservatively get $20,000 a year in tax free benefits in the form of housing, per diems, and travel pay. If you are in the 35% bracket (including state and federal taxes), that is $7,000 more a year in your bank account.Obviously, this math doesn't work well if you have to pay $12,000 a year to get this benefit. I suspect most experienced travelers get more like $30,000 a year in tax benefits from traveling, but that would still get you only close to breaking even.Itinerant status (no home) is certainly one solution. Another is buying a modest home and getting a roommate to cover the mortgage payments. Then your tax free stuff is fully to your benefit, and your home may appreciate as well. You can do the same thing with a 2 bedroom or larger apartment as well, you just lose any capital benefits from potential home appreciation.Obviously, if an agency will roll your tax free into your hourly, your OT will benefit. An agency that knows what they are doing will not do that for IRS reasons (as well as not paying you extra OT), but continue paying per diem and housing and taxing it. By the way, your total pay will probably drop a bit as the agency now has to pay their share of FICA, workers comp, and unemployment on your now taxable reimbursements. That is about 10 percent on that money. And of course so will you. So if you can preserve your tax home, and are a good money manager, you will probably come out ahead.
  4. by   ChristopherB
    Do you have a relative's house you can use as your "tax home" while you are traveling?
  5. by   sweetgurly25
    so its better to have a tax home. yes I do have relatives that I can use. I will think about it though. because I don't want to pay rent anymore.
  6. by   cosmicmama
    I have read that if you use a relative's address for your tax home, that it's best to send them a check every month for a few bucks to show you're paying "rent".
  7. by   NedRN
    An address change to a relative's home is unlikely to fly with the IRS who will think you are using an address of convenience and that you are still itinerant in an audit. You will have to prove that you are really living there, and paying nominal rent will not be enough.
  8. by   Lovelymo79
    NedRN, so is it better to be a it better to be a itinerant traveler with no home? I want to give up my apartment at the end of my lease and just stash my stuff in storage. Will my incidentals like housing, meals and all be non-taxable? Or would it be better like you said to get a roommate and use a permanent home address? I would prefer to not have to worry about an apartment and such. I do plan on returning to my present state (TX) in between assignments and stay with a friend..unless I change my mind. I also plan in keeping my TX driver's license and car with TX tags.
    I do have some time to decide but I was just wondering. Thanks.
  9. by   NYcDcG
    I am a similar boat and am wondering what to do. I have no desire to own a home, only rent which costs me $1400/mo. in a place that doesn't allow subletting. I was thinking of becoming itinerant, and taking the stipend/per diem as taxable all the time.

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  10. by   NedRN
    Better? Two things to consider: financial and personal. Both are multifactorial calculations. You can crunch the numbers for various scenarios and plug the results into your personal preferences. If you are lucky your decision will be easy.
  11. by   ChristopherB
    Quote from holisticRNcoach
    I have read that if you use a relative's address for your tax home, that it's best to send them a check every month for a few bucks to show you're paying "rent".
    If you use a relative's address, you need to legally chage your driver's license address, voter's registration, RN license address, banking, etc... and return to that address occasionally for it to be acceptable to the IRS.
  12. by   NedRN
    If you use a relative's address, you will have a big red flag if you get audited. You will have to demonstrate a quid pro quo relationship, i.e. fair rent paid, a room that is exclusively for your use, and genuine ties to the area. You probably need a counter balance to all that negativity, and working locally would be a big help (one of the three piers of a tax home - you need 2 out of three to qualify at all).
  13. by   mccoys25
    I am having the same issue. I had to turn down a travel position because I live alone and I dont want to have a lease and be responsible when I may be any where in the US. Im really interested in the replies. Subletting is not that easy to do.
  14. by   NedRN
    Subletting is giving up your tax home.