I recently bought a condo for dirt cheap and the HOA fees are only 150/month. I put a good amount down, and my monthly mortgage + taxes is only 250/mo + 150/mo HOA. The Hoa includes everything except electric and cable. Electric is an avg of 80/mo.
I just received an offer on a new assignment. I told the recruiter that I want the lowest hourly possible, so that I can get the rest in tax free. He then gave me a 10/hr quote. When the math was done, I figure I will be taking home 1700/week after taxes.
I'm scared of the IRS! Scared that they will say I got too much in tax free and will owe money. And scared that they will frown upon such a small mortgage payment.
i would like an answer to the low tax rate too.. i was worried about it but my recruiter told me not to worry? but i havent talked to an accountant about it and i dont have a accountant familiar with travel nursing..? i like the idea of low tax and high non tax, but will i get in trouble? irs doesnt know what your profession is right? i plan on doing travel nursing for a year or two and dont have crazy expenses so i guess im not worried about stuff like purchasing a new home or something...
thanks for the help!
Certainly your recruiter is not a tax expert, and they have competitive reasons to tell you not to worry. The main issue is that you have to be working away from a legitimate tax home to be eligible for tax-free reimbursements that often make up the bulk of your weekly compensation such as housing and per diems. You can just use your parent's address as many recruiters will tell you. Tax home maintenance is a big topic and there are many potential gotcha's. Even the original poster who owns her home could get into trouble. I recommend that you read the many articles available on the subject on PanTravelers and TravelTax and then consult a travel tax specialist if you have some edge case and need specific advise before you travel.
Generally nothing you do as a travel nurse specifically will trigger an audit, such as low rent or low wages. The problem usually arises if you get audited for any other reason and they examine your tax home carefully. I calculate the potential for back taxes, penalties, and interest could reach six figures after just three years of travel. That is too much risk to even consider trusting a recruiter for tax advice. They will not help you in an audit.
Yes, the IRS does know your profession - you put it on your tax return. And they know what your employers business is as well. Not that it matters really - generally nurses, while relatively high earners, are low risk for audits.
Well, I think I'm going to have someone from Travel Tax do my taxes this year. The CPA that I normally use has never heard of travel nursing and she doesn't seem to have an understanding of how the stipend works. Either that, or it's me who is confused. She said I will have to claim my stipend + MI as income. She also said I should be saving all receipts for meals, gas, etc. This makes my head spin.
Personally the risk isn't worth the savings. If your agency is recommending or even allowing travelers to take 10/hr then they are being extremely shady. My agency won't go below 18...in fact I think they just upped it to 19/hr. I think the tax savings from 10 to 18 is only like 60ish/week. Certainly not enough to risk a really hard hit if audited. Just my humble opinion though.
And Ned is right. Your CPA is wrong if they say you have to claim your housing or other stipends.
My first assignment had an hourly wage of $10/hr with a take home of $1300 a week (it was low). 1700/wk is a great rate. What does it matter what the taxable portion is? You have a tax home, you have mortgage and HOA fees you are paying and can prove. I don't see what the problem is.
NedRN
1 Article; 5,785 Posts
Correct. Only the work state can enforce their own minimum wages if higher than federal.