Living in an RV. Need tax help

[AshevilleRN]

Hi guys, first post here. I am an ER nurse of 7 years and want to start to travel next year. I am looking into an RV and truck to accomplish this. I am having a hard time understanding tax homes. I just want to know if I am going to be eligible for tax free housing stipends if I keep my primary residence in NC. I do pay mortgage on the home. I may or may not rent it out for a few months a year.

Also if I start traveling, do I have to come back to NC and work every year to maintain the tax home status? Can I work anywhere in the state or so I have to be near my tax home?

Any help would be greatly appreciated.

[nurse.ethel.RN]

I have a fantastic tax man whos given me invaluable information - you need a primary residence (albeit apartment, own home, or rental (even if you "rent" a space from a friend)). When you travel, most of the time they "require" yor primary resident address to be at least 50-60+ miles away from your assignment (I have known nurses who live and work in the same city because they used a relatives address in another city far enough away just so they can get the stipened - I know its not "legal", but some agencies dont delve that far into it because they need heads on a unit. SO, yes, you need to keep some primary resident address (even if you rent your house out), you are not technically required to go back and physically stay in that house - but I THINK you cannot be signed up on a travel assignment for 365 days a year, you have to be off for at least three months (thats the time youre assumed to be living in your permanent residence, even if you dont). So you could travel, take a few weeks off, travel, take a few more weeks off etc. and rent out your house year round if you want - no one knows the difference. ALL that being said, you qualify for housing and meal stipend :)

[NedRN]

Ethel, I know your intent is to be helpful, but your post is full of misinformation.

If you commute from where you live, you are not eligible for special tax treatment and all your compensation is taxable. Sure, the agency can pay you that way, but it doesn't mean a thing if you get audited and have to pay back taxes, penalties, and interest. You are responsible to pay all the taxes you owe. There are tons of people who commute more than fifty miles and they don't get special tax treatment as they are not working away from home. What makes travel nurses special?

Agencies can have internal policies to protect them during an IRS audit, but that doesn't protect you. A 50 mile policy can qualify as minimal due diligence on their part - note they don't even verify the address you give them. They will not be present at your audit, nor will they pay your back taxes. It is between you and the IRS.

Fifty miles appears nowhere in IRS rules and is not a criteria for anything. What the rules actually say is that if the nature of your job requires an overnight stay to rest, and you get local housing (which "duplicates" your tax home residence), you are eligible to deduct the extra cost of working away from home, or to receive tax free stipends from your employers to pay for those duplicated expenses. The workplace may be much less than fifty miles away and you still need local housing, picture call requirements of 30 minutes to the hospital for example.

There is no "off for three months" in IRS rules either, that is an agency rule, again for minimum due diligence. If all your income comes from just one location, that three months off does not change the fact that that location is your tax home.

Tax free housing and per diems is sort of a tax loophole, but there is nothing special about travel nursing that makes it work just because an agency says so. A recruiter coaching you to just use a family or friend's address as your tax home does not make it so with the IRS. You have to actually live there, return "frequently" (the IRS word), and incur reasonable expenses to maintain your residence - rent, mortgage, or property taxes and maintenance.

On the same note, if you own a house and rent it out, you no longer have a tax home. Everywhere you are is "home" and all your compensation is taxable. Who cares if the agency knows or not? It is the IRS audit that will kill you and the agency cannot protect you. In fact, the more lax an agency is in doing due diligence, the higher your risk of an audit will be as eventually they will be audited and will be auditing their travelers when they find poor policies.

[nurse.ethel.RN]

It is not misinformation - its what is happening. Period. Like it or not. If its done right, there is no reason at all for the IRS to get involved, and as many travelers I know (legit or not) not a one has been audited in 20 years. Everything I stated is a general rule of thumb, not from any travel agency, but the IRS or someone who works for them OR the people who literally travel 9 months of the year.

[NedRN]

Well OK then. Post a link to the IRS documents that support your position. I used actual IRS language in my post.

I'm in no way denying that many recruiters are turning many travelers into tax cheats, and it is difficult to believe travelers don't know it. Sounds like you know it. Posts like yours do not help those of us who are not committing fraud and paying our fair share. Just because people do it, doesn't make it right. Any ethics classes? Any patriotism? Sense of right and wrong? If back taxes, interest, and penalties don't scare you, how about the possibility of criminal prosecution? Not too likely but possible. All depends on your risk tolerance.

If you really want to know about audit rates of travelers, you will get a better idea from TravelTax who has probably done audit defense in hundreds of traveler audits by now. Sure, you can play the odds and you may not get audited, but if you have been traveling without a legitimate tax home for say several years, the financial consequences could be life altering. Can you afford a 6 figure audit result? Is the risk worth it?