New traveler tax questions: single and renting

[phluteloop]

Happy holiday weekend everyone,

I've spent the weekend doing my homework and researching information on becoming a travel nurse. I just want to say THANK YOU to this forum and all who have contributed! I've gained so much valuable information from extensive searches.

I'm hoping to get some updated information from single traveler's who started their journey leaving behind a rental apartment. I've read a great deal on TravelTax and PanTraveler's and have a couple questions. Any advice and insight would be a great help! I've also considered emailing TravelTax directly.

My background:

- Circulating nurse with 5 years experience in a large teaching hospital, 20 OR suites.

- Single with two kitties that I would like to take with me. Current rental apartment is $500/month + $30 for parking. Month-to-month option will be available to me in June 2015.

- My motivation to travel is to make extra money to help eliminate debt and to experience working in my birth state of California (I currently reside in Michigan). I would gladly work in other state's depending on the contract, but the west coast is calling me home.

Questions:

- As a first time traveler looking to increase my base pay, will traveling be financially beneficial if I continue to pay for my rental?

- Would you agree or disagree that keeping a "tax home" is practical for the first time traveler learning the ropes (to continue to keep as a back-up)?

- "A tax home and a permanent residence are separate items. Continue to keep your drivers license, registration, bank accounts, insurance and mail in one place. You may be able to find a place to move all of your legal ties to take advantage of lower fees."

"Although you have no tax home, it is still alright to have a primary home” where you can receive mail, register your car and so on. If this is a compact state for nurse licensure, you may still be legally allowed to have a compact license – check with your state board." - Pan Travelers

Would I use, say for example, my parent's address as my primary "home" address? I'm assuming I would forward my mail to my new address in my contract state, however, if I decide not to take my car with me (I'd rather not), that would have to sit at my parent's address. Would I keep my old address on my driver's license until I decide where my permanent residence will be again?

- Any experiences out there from new traveler's that decided to work without a tax home?

Thank you in advance for helping me to understand these situations. I want to go into this as prepared and as educated as possible so my experience is a happy one!

[NedRN]

Having a tax home is worth about $10,000 a year of bankable money for most travelers. If your expenses maintaining that tax home exceed that figure, then no, it is not worth it.

Having a defensible tax home in an audit is a matter of preponderance of evidence. Moving away from your current tax home (assuming your parents do not live in the same general area) at the exact time you change careers would be a tough sell in an audit. If you establish a new tax home, perhaps by taking a per diem job locally, it might work. You would also have to pay rent, and have a sleeping room of your own that is really yours. You also have to return "regularly" (the IRS guidance that is admittedly ambiguous). Yes, and you should have your vehicle and drivers license registered there, voter's registration, library card, physician and so on. Because you live there!

There are certainly ways to maximize your pay as a traveler. Low costs at a real tax home are one of them so you can take full advantage of tax benefits without worrying about tax consequences. You could consider buying a home if you can swing it with your debt load. Then much of your costs are going towards equity and not lost. Having a two bedroom rental (or home that you own) and having a roommate is another way to lower costs dramatically.

Consider what your options are, and put them to paper (or computer). Include your long term plans, and where you might like to end up. How long do you think you will travel? For peace of mind about tax homes, try calling TravelTax when you have a medium firm plan for a critique. Consultations are free, but it is good not to waste their time so focused questions are best. Feel free to follow up here and I will do my best but mind you, I'm a nurse! Not a tax professional.

[phluteloop]

Ned, this information will definitely give me something to work with as I think on my options. Thank you so much for your insight!