Taxes on housing

bagladyrn, RN · Aug 22, 2007

What is the deal with being taxed on my housing. Ive been in san diego since last october. Ive been with the same facility since jan. Am I going to start getting taxed in october cause thats a big chunk out of my paycheck. Anybody know how to get around this?

Yes you will start getting taxed on the housing costs whenyou sign the extension that takes you over a year in one location (metro area, not individual hospital). At that point the IRS considers that your new permanent location for tax purposes. The only way to avoid it is not to stay in the area a year. If you tried, or your agency agreed not to take taxes out, you could be in big trouble with the IRS - and no way to hide it from them as all of your tax income papers would have the same location on them for the year.

naskippy · Aug 23, 2007

Yes you will start getting taxed on the housing costs whenyou sign the extension that takes you over a year in one location (metro area, not individual hospital). At that point the IRS considers that your new permanent location for tax purposes. The only way to avoid it is not to stay in the area a year. If you tried, or your agency agreed not to take taxes out, you could be in big trouble with the IRS - and no way to hide it from them as all of your tax income papers would have the same location on them for the year.

True what she says about the one year deal....but here is the loop hole. Don't sign an extention that will take you over the one year mark. Even you want to continue working in that metro area or with that same hospital take a couple of weeks vacation and go back to your perminent residence and after a couple of weeks sign a NEW contract with your agency. You could maybe even pick up a couple of per diem shifts while at your perminent residence which would prove you were at home. Yes...your right its another nursing game they make us play.

Thanks

bagladyrn, RN · Aug 24, 2007

True what she says about the one year deal....but here is the loop hole. Don't sign an extention that will take you over the one year mark. Even you want to continue working in that metro area or with that same hospital take a couple of weeks vacation and go back to your perminent residence and after a couple of weeks sign a NEW contract with your agency. You could maybe even pick up a couple of per diem shifts while at your perminent residence which would prove you were at home. Yes...your right its another nursing game they make us play.
Thanks

Whoops! Be careful with that! Leaving the area for a short time and returning for another contract does NOT reset the clock in the eyes of the IRS. There is a tax professional who specializes in taxes for travelers who has researched this and was emphatic that this isn't going to work. He answers a lot of questions on the delphiforums Travel Nurses board.

a21chdchic · Sep 8, 2007

So, if you take paid housing and utilities, are you taxed on that if you stay in the same area for less than a year?

a21chdchic

bagladyrn, RN · Sep 8, 2007

So, if you take paid housing and utilities, are you taxed on that if you stay in the same area for less than a year?
a21chdchic

You are taxed on it IF you do not have a legal "tax home". This is different than legal residence, requres that you pay costs associated with your tax home (rent, mortgage, utilities, etc.) as well as return to the area regularly, and have other ties to the area. The whole idea is that then the costs for your housing at the assignment would represent "duplication of expenses". You don't have duplication if you do not have a tax home.