NY contract vs CA contract

NedRN · Mar 1, 2016

Did you have a question?

DieselBurps · Mar 1, 2016

Who is this with and what speciality? Both look like good money

Wolf at the Door, BSN · Mar 1, 2016

Are they good contracts is my question? I was pulled away from the computer.

Both Adult ICU. NYC has multiple positions.

PM me for who they are with so I can get my bonus if you do it LOL.

NedRN · Mar 1, 2016

Do you have licenses in both places? They both will take some time. If you have worked in both places, which do you prefer? Have you looked at and considered how much the actual cost of housing will cut into your pay? Will the pay be better than where you work now? Are you traveling for the pay and insist on assignment one paying big bucks?

Personally, I'd take California. Your ratios will be better. Fully relieved breaks every four hours, and a meal.

Wolf at the Door, BSN · Mar 1, 2016

Do you have licenses in both places? They both will take some time. If you have worked in both places, which do you prefer? Have you looked at and considered how much the actual cost of housing will cut into your pay? Will the pay be better than where you work now? Are you traveling for the pay and insist on assignment one paying big bucks?
Personally, I'd take California. Your ratios will be better. Fully relieved breaks every four hours, and a meal.

I have heard about the ratios in Cali and the breaks. Yes, I have active licenses in Cali & NY. Housing is roughly the same 2500-4k. More choices in NY. Train to work instead of car.

Wolf at the Door, BSN · Mar 1, 2016

I have realized looking at temp housing the Cali job is just not enough money for housing. I am only going to actually pocket 800-950 a week.

8-ball, BSN · Mar 2, 2016

Just curious but wouldn't $15.03/hour in NYC raise some red flags for the IRS? It seems pretty low for the area, I don't know if this is a red flag for audit or not. So far my taxed hourly for this assignment in KY has been $26 which I know means I make less take home but I was told that way I don't get red flagged with the IRS...Am I being lied to?

NedRN · Mar 2, 2016

The IRS can flag returns based on large shifts of income, say 20K one year and 100K the next, but that is very unusual to do so in our income bracket. That would result in their auditing large numbers of unemployed or underemployed workers. The IRS cannot see our hourly rate, basically they see our W-2 annual income only. My own income has fluctuated widely over the range I mentioned in the 20 years I've been a traveler for a number of reasons and I've never been audited (anecdotally of course and knock on wood). The IRS does fewer audits every year, and they go for the best bang for their time, which is upper income earners who are practicing much more advanced forms of tax avoidance.

Let's say the worst happens and you are audited (almost certainly for another reason) and fair market pay comes up (it won't). The real question will be not working for fair market pay (none of their business), but whether you were eligible to legally receive tax free stipends (which is the real reason your taxable pay was low). If you were not (did not maintain a legitimate tax home, were not working away from home, didn't work in the same general area over a year, yada yada), then you are in deep trouble. That is where travelers get into big trouble with the IRS, shifting their tax homes to their parent's address at the same time as becoming a traveler.

From a big picture perspective, agencies can handle stipends wrong and be found in Tax Court guilty of recharacterizing wages. They could be found to do so by negotiating stipends (not paying travelers in a uniform manner), or by not doing due diligence on traveler eligibility, or even found to be coaching travelers to evade proper taxation. Other than perhaps follow up audits on the last group of travelers (who as above are in deep trouble if audited), the only ones hurt by bad practices here are the agencies.

If a traveler does everything right on their end when it comes to tax homes, you will suffer no tax liability if you are ever audited. It is highly to our advantage to seek out the highest tax free stipends and lowest taxable pay. In fact, our entire industry is based on just that.

8-ball, BSN · Mar 2, 2016

Thanks Ned, so basically my agency telling me that they pay out more in taxed income versus stipends for legal purposes is probably not true? I don't see how that would benefit them though, they are still getting the same bill rate plus their paying out just as much to me, just more of that pay is being taxed and therefore I am losing more $.

NedRN · Mar 2, 2016

That is probably correct, although there is a balance that agencies, especially larger agencies should meet for their own risk reduction. At least that is the gospel as taught by TravelTax to agencies. That risk of course is hard to quantify as the principles of Tax Advantage are rock solid.

Certainly agencies don't reduce stipends for your benefit. In fact, not paying maximum stipends puts them at a competitive disadvantage over agencies who do. To a certain extent, it is a race to the bottom, tempered only by some thought to risk reduction. From quotes posted online by large agencies like American Mobile (who have the most to lose from an adverse Tax Court ruling), even they are paying as low as $12 an hour taxable.

It is always in taxpayers best interest to decrease taxes versus net compensation.

Wolf at the Door, BSN · Mar 3, 2016

Thank you, Ned. I never understood why people think they would be audited for a low wage. When you file your taxes it is only your total gross and adjusted gross that is inputed. I have never reported my hourly wage. What sense would that make....when you think about it. I need the max in housing and a lower wage is alright with me.