Please Help, Confused New Traveler

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Hello Everyone,

I am a new traveler looking for my first assignment.

I am in need of some sound advice and education on the travel world. I'm having trouble understanding the entire tax home, stipend, taxable hourly rate talk.

From my initial understanding I thought if i let the company find housing for me then my pay would be from my taxable hourly rate and my perdiem for M&I. The taxable was usually in the 20's from what I been receiving from the recruiter. If I decide to take the stipend and find my own housing then I would pay for my housing on location AND my tax house at my permanent location? Ok if this is true I understand it but it still sounds difficult paying two seperate homes with a stipend and yet still have a low hourly rate.

On the other end a new recruiter from a different company stated a low hourly rate of around $18/hour, per diem of around 500/week which totaled about $990 after taxes. in this package they would provide housing for me but the recruiter stated I still would have to pay for my permanent tax home out of the $990/week, 2000/biweekly... How is that even worth while to travel? I feel like i'm getting low balled being a new traveler especially reading the pay online from various sites.

Lastly I also was told If I have the company find housing for me and do not have a permanent residence then my housing and everything else would be taxed. How when I won't even be receiving the stipend money?

So is this information correct? If I receive a stipend I'd pay for 2 homes, If I don't receive a stipend I still have to pay for 1 home?

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You have to pay for one home no matter what, right? You are paying for one now by working at home. And you are paying taxes on all your compensation.

If you give up your home to go travel, you will be down to one home (either via an agency housing stipend or agency provided housing), and will pay taxes on all your compensation (including housing), just as you doing now.

If you travel and keep your home, you will still pay for whatever costs you have to maintain your permanent home while you travel - although perhaps your costs are reduced as your utilities will be lower. And yes, you will need secondary housing at your assignment. The difference is that that housing (and meals or M&IE) is now a reimbursement of expenses away from home on business and not taxed.

Simple, right?

Well, perhaps not on first exposure. Try reading some articles on PanTravelers or TravelTax, the repetition and underlying tax theory may help it sink in.

Here is your bottom line though. For the average traveler, tax-free reimbursements are worth about $10,000 extra in the bank annually. If maintaining your tax home costs more than that, then a tax home not be worth it (other than the investment potential of your house increasing in value).

There are three ways around this simple math if you are on the negative side. Reduce your costs, perhaps by taking on a roommate. Or reduce your assignment housing costs, by getting shared housing, or perhaps an RV. Finally, earn more.

Unless you have a hot specialty, you may not make great money on your first assignment, nor should you try. A successful travel assignment on your resume will make you more valuable. The average traveler makes a base of 80 to 100K a year as figured by the PanTravelers Calculator (highly recommended if you want to compare two different agency quotes). That is about the same or a little more than the national average for a staff nurse (including the much better staff benefits).

No matter your specialty or what you might ultimately earn, don't travel unless the lifestyle appeals to you, or it is clearly more than you can make at home - as is true for many nurses in the South.

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Thank you for your reply. So am I wrong thinking that if they pay for my housing and I don't physically receive that money then my hourly and per diem would be mine and not used to pay for an additional housing back at home? I thought if you received the stipend money THEN you have to pay for a tax home. Please clarify for me.

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I work in the NICU

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Thank you for your reply. So am I wrong thinking that if they pay for my housing and I don't physically receive that money then my hourly and per diem would be mine and not used to pay for an additional housing back at home? I thought if you received the stipend money THEN you have to pay for a tax home. Please clarify for me.

I'm not sure of what you are asking. Travel companies usually quote several numbers per assignment. These include hourly pay, stipend (for housing and meals), and travel. If you have a tax home, the stipend and travel are not subject to income taxes. If you don't have a tax home, they are subject to income taxes. The gross compensation is the same, only the net pay will be changed by your tax status.

If you have a permanent home, you will pay for it regardless of travel or not. I don't know how you get out of maintaining it unless you give it up.

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My apologies let me clarify.

So option one for instance taxable hourly 18/hr, per diem meal 250/week, travel 600 round trip, hoisting 2000/ month.

Option 2. Hourly 18/hr, meals 250/week, travel 600 no housing stipend , company will pay for housing.

My question is do I need a tax home for option 2 since they are not giving me cash for housing? I thought tax free housing stipend was to pay for both homes. I can't imagine paying for a home with that low of a take home.

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Cash or provided housing is the same thing. If no tax home, you will pay income tax on the benefit provided. For simplicity, assume the provided housing costs exactly the same as the housing stipend. You will pay exactly the same tax as they are both taxable benefits. Touching the cash or having the agency pay for housing directly with it makes no difference.

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Oh ok I understand. How is the housing taxed out of that low hourly? The recruiter stated everything will be taxed so does that mean the hourly would be higher?

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Nope, hourly will stay the same. Only your take home pay will change.

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Would you recommend that I negotiate a higher hourly? I'm trying to make it worth it. The location is Texas so nice read about the low pay . Not thrilled about that

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Sure, you can always ask for more money. You can also shop around with other agencies. Negotiating works better if you have other offers and a Plan B.

You will find getting more money may be easier on your second assignment once you are a proven traveler.

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Specializes in ICU,CVICU.

Legally, in order for the housing stipend to be tax free you should be paying a mortgage on a home. If you are not paying a mortgage and your housing stipend is tax free, if you are audited by the IRS you could owe Uncle Sam a huge chunk of money at the end of the year. You have the option to let them tax your stipend if this is the case. Bottom line, you don't have to have a mortgage to take the agency's housing, only the tax free stipend.

To answer your other question - If you take the agency's housing (they find a place for you to live) then you won't get a housing stipend ($$$). You have to choose which one you need/want.

Hope this helps, good luck!

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