Itinerant status, moving, and agency-related question on housing/moving

[sorensic, MSN, RN]

Hello,

This is a two part question:

1.)

I had a question about housing for someone who is itinerant. I was planning on taking an assignment and also moving to the area where the assignment is taken and then taking subsequent assignments after completing the 13-week assignment in the new home. I would be establishing a tax home in a zero income tax state afterward. I hope this makes sense.

I'll make up an example scenario to maintain anonymity. Let's say I'm moving from Vermont to take an agency assignment in Texas with the intent of moving from Vermont to Texas permanently.

While on my initial assignment in Texas, where I am both moving to and completing an assignment, I would be itinerant during those 13 weeks. Upon completing my assignment in Texas, I plan to keep my tax home there and take subsequent assignments in California. At that point I would no longer be itinerant as my tax home and primary residence (mailing address, drivers license, etc.) would be established in Texas.

Would that make sense and is that doable?

2.)

Now I have another question about what makes most economic sense to avoid high moving expenses. I have no intention to defraud the IRS, so I am completely okay with paying full taxes on the income I make given that I would technically be itinerant when moving to the area where I take the agency assignment.

My question is, are there situations wherein you could extend the lease at the agency-provided housing to make it a permanent home? I have not travelled as an agency nurse yet so that is why I'm seeking clarification from someone more experienced.

My thoughts are that rather than signing on a 12-month lease with only a 13-week assignment (I could see why some landlords would be weary), that I could simply take the agency-provided housing and then extend beyond the 3-months once moved in.... but I'm not quite sure if these short-term housing stock require people to leave after 3 months.

Thanks for any help and advice you have!

[NedRN]

It is fantastic that you are exploring solutions before you make your move. Frankly, you should explore them with a professional Travel Tax. He will give you (as will most tax guys) a free consult on your proposed details.

There are some possible problems with establishing a tax home the way you describe. Should you be audited for any reason, It looks like you made an artificial move and never established a real tax home and ties in your new locus. Thus you may not be working away from "home" for those subsequent assignments in CA, but still itinerant. Any lease would be irrelevant.

There are several ways around this issue. One is taking a staff job in TX immediately. That open ended job moves your tax home irregardless of intent if you also abandon your prior employment. It also has a possible advantage of getting a sign on bonus and/or moving expenses from your new employer. You may not want such extra money though as it usually requires a contract. You want to be able to quit at any time (say after three months). Now you have established ties sufficient to have a legitimate tax home.

Working at home is one of the three main pillars of a tax home. Only two of the three pillars are required to establish bona fides (I've never worked at home), but it makes your tax home rather solid (absent mistakes like only working in the San Francisco Bay area). So another way to go is to take an open ended per diem job (hospital or agency) and work a few shifts when you are home.

I'd strongly encourage you to buy a home if you can swing it. It means you are very unlikely to have a problem at an audit, showing strong ties to your home. It also makes traveling financially much better. Get a roommate to take care of your property and reduce your mortgage/tax/maintenance costs. Owning a home accounts for most American's wealth (often the total sum) and is one of the best savings plan invented as few of us are disciplined enough to save and invest otherwise. Buy in a desirable area and roommates will be easy, and your investment will at least maintain its value and could appreciate.

[sorensic, MSN, RN]

Thanks for all the info. I ultimately decided to go staff in a heavily unionized west coast region since the hourly rate was basically the same as the travel rate once you considered all the benefits included.