Stipends? Taxes? IRS?

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Does anyone that does travel nursing knows how stipends? And how tax home works, and the IRS rule of not being able to stay in one city for a year?

That's not true.

The IRS guidelines are located here: Publication 463 (217), Travel, Entertainment, Gift, and Car Expenses | Internal Revenue Service

In it, there are specific definitions on what needs to be in place for a tax home, and your city of permanent residence IS NOT automatically your tax home.

Per the publication link you provided:

"If you don't have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live."

AND

"Factors used to determine tax home.

If you don't have a regular or main place of business or work, use the following three factors to determine where your tax home is.

  • You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.

  • You have living expenses at your main home that you duplicate because your business requires you to be away from that home.

  • You haven't abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.

If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you can't deduct travel expenses."

NedRN explained the three pillars above. I don't know why this is even still being debated.

OP, if you have specific questions as to whether or not the place where you regularly live would be considered your tax home for tax purposes, I would advise you to contact a tax professional.

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Specializes in Critical Care.
Per the publication link you provided:

"If you don't have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live."

What you left out was this

See No main place of business or work , later.

When you go to this section, It is headed with this

No main place of business or work. You may have a tax home even if you don't have a regular or main place of work. Your tax home may be the home where you regularly live.

The operative word here is MAY. MAY does not mean it is guaranteed, or even automatic.

In fact, that very section goes on to explain exactly what is used to determine where your tax home is.

The three factors are this:

1. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.

2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.

3.You haven't abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.

It then goes on to say

If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you can't deduct travel expenses.

Many travel nurses fulfill one or two points, not all three, because they read what you did, stop at that part of the page, and move out of their house/apartment, pack up everything and travel. Even if you keep your apartment/house, bank accounts, etc. at your permanent residence, you still may not be fulfilling the requirements to have tax exempt travel stipends, because many don't take assignments near their permanent home.

It's not as simple as you say it is. This is a very easy trap to fall into, and while if you meet two of the criteria, there is a preponderance of the evidence/facts to determine the status of your tax home, but that's not made by you. It's made by the IRS agent who is auditing you. I've had enough friends travel, not pay attention to the tax laws, only read the first sentence of the section, as you did, and assume they are good. Later, tax man comes knocking, because tax man always comes knocking, and then you owe back taxes, penalties, and interest on all of this income you neither reported, nor paid taxes on because

If you don't have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live.

Again, key word is MAY. It's not automatic.

They don't read any further, blindly trust the agency and don't do the research themselves, and get ******. No thanks. I'll pass.

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What you left out was this "See No main place of business or work , later."

When you go to this section, It is headed with this "No main place of business or work. You may have a tax home even if you don't have a regular or main place of work. Your tax home may be the home where you regularly live."

That's hardly automatic. In fact, that very section goes on to explain exactly what is used to determine where your tax home is.

The three factors are this:

"1. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.

2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.

3.You haven't abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging."

It then goes on to say

"If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you can't deduct travel expenses."

It's not as simple as you say it is. This is a very easy trap to fall into, and while if you meet two of the criteria, there is a preponderance of the evidence/facts to determine the status of your tax home, but that's not made by you. It's made by the IRS agent who is auditing you. I've had enough friends travel, not pay attention to the tax laws, only read the first sentence of the section, as you did, and assume they are good. Later, tax man comes knocking, because tax man always comes knocking, and then you owe back taxes, penalties, and interest on all of this income you neither reported, nor paid taxes on because

"If you don't have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live."

They don't read any further, blindly trust the agency and don't do the research themselves, and get ******. No thanks. I'll pass.

Congratulations, Captain Obvious.

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Specializes in Critical Care.

You said it was automatic. I was merely pointing out that it's not.

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You said it was automatic. I was merely pointing out that it's not.

I said:

"For workers (like traveling healthcare professionals) that have no fixed workplace and travel to numerous locations for work, the IRS considers their city of permanent residence or where they regularly live, to be their tax home."

I don't see the word "automatic" anywhere in that post.

Unravel your knickers, darling.

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Specializes in Peri-Op.

Ill take my tax attorney and CPAs advice on these matters. They both fall in line with Ned and ms interpret....

Also nothing has changed for me with the 'new' tax code since Idont itemize and wont as a paid employee traveling nurse. It probably has not changed for most travellers since the majority are not 1099.

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Specializes in Critical Care.
Ill take my tax attorney and CPAs advice on these matters. They both fall in line with Ned and ms interpret....

Also nothing has changed for me with the 'new' tax code since Idont itemize and wont as a paid employee traveling nurse. It probably has not changed for most travellers since the majority are not 1099.

As you should. I'm neither a lawyer, nor an accountant. I've just had some friends get audited by the IRS, which didn't end up going well for them. From how I read the rules, it seems to be very easy fall into a position where you're no longer eligible for the tax free stipends and not know it.

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There are certainly a lot of gotchas for the unsuspecting who do not understand the basic principles, many of them misled by their recruiters.

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