Travel Nursing Per Diem Pay

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I have been a travel nurse for just over a year now-after doing some tax research I was wondering if anyone can help with some questions regarding the per diem pay.Most jobs allow a per diem (lodging + meals and incidentals) if you travel a certain distance away from your tax home. Travel companies sometimes pay you for the meals and incidentals in a "tax advantage plan" into your check. My company pays $35/day but in the cities I've traveled the government rates are $71/day, so last year I was able to write off the difference in my taxes. My question is about per diem and lodging allowances-you can either take the company housing or stipend (which I take) and it is tax free. Since the lodging amounts are fairly high in some cities, could you decline housing or a stipend all together, have their amount be put back into your hourly rate so you can claim the high per diem rate at the end of the year? It may be a slightly higher tax bracket but the amount made off of claiming the high per diem outweighs the higher amount paid in taxes.For example:Hourly rate in Boston:$20/hrHousing stipend: $2400/monthMEI paid: $35/day So I make approx $5400/month after taxes. If I were to decline the tax free housing or stipend and have the $2400 put back into my hourly rate, it would be higher in taxes but I could claim the full per diem.Lodging per diem in Boston is $183/day for July...plus the $71/day for MEI = $254/day per diem maxMy hourly rate would change to $36.67 fully taxed with no housing so my checks would be approx $4900/month (with the $35/day MEI my company pays)So I would be able to write off the full per diem for lodging of $183/day x 91 days (for 13 week contract) = $16,600 plus the difference of the MEI 71-35 = $36/day x 91 days = $3276... that adds up to about $20,000...Is that even legal? Does anyone know if there are caps for how much lodging/per diem you could write off??Would a tax lawyer be able to answer those questions?Thanks!

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Specializes in PICU, Sedation/Radiology, PACU.

I found this link. It will be helpful to you.

Travel Nurse Taxes

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Specializes in Medical and general practice now LTC.

I think the best thing you can do is discuss this face to face with either tax lawyer or accountant in the state you work in as I am sure things will vary from state to state

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Contact http://www.traveltax.com. They are all over the travel nurse message boards. They specialize in the tax law for this industry

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Specializes in ICU, ER, EP,.

You need an accountant that is IRS CERTIFIED in travel allowances, and there are not plentifull. Be careful because one of the suggested places is someone who looks VERY qualified but is not even a CPA and the site looks VERY nurse traveler friendly.

For each state you work you will need to file a return, as well as keep good records, as well as copies of your contracts. You can even write off your mileage driven to and from work, but it needs to have specific details. The IRS website, although cumbersome, gives excellent examples of what they require for record keeping.

If you switch out assignments, one with housing included (lower hourly rate but lower taxes), and then take the housing stipend yourself on another, this will create more record keeping.

Also you need to satisfy two of the three criteria for a home base to even qualify for the lower housing tax, and many people do this wrong, by thinking using a family or friends address of residency covers them and it does NOT in the eyes of the IRS. So be VERY careful, as that 15% tax break you can claim, can be pulled from you if audited, and penalties apply. The IRS site is VERY clear on what satisfies a home base and what does not.

An example is that my husband and I live apart, although I am not on his lease, I pay him 500/month for housing costs in the form of a check. My bank is local to that address. I am a registered voter there and vote. My vehicle is registered and inspected to that address. So I can prove not only an address, but actual ties to it. So I prove two of the three requirements. The third is actually working in the "home state", which I do not. Not doing so once a year is a huge red flag, and I need those documents and proof to ensure a "home base" for the tax break for the IRS.

It is very detailed, and you need a certified CPA that is experienced in travel requirements. Not simply a company that says they are. Be very cautious! Keep a folder of your travel and assignment contract for each one, with receipts.

Good luck, hope this helped.

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Specializes in ICU, ER, EP,.

Forgot to add... many states require you to obtain an instate drivers license after 30 days residency. If you get pulled over by the cops, you need a copy of your travel contract with you in the car to prove that you haven't broken any local laws. I keep mine in the glove compartment, just in case.

You will have a "local address", when the cop asks and having that contract saves you time and tickets in the event you are pulled.

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Specializes in Medical and general practice now LTC.

I think this is something that really can not be helped with unless you have a face to face chat with someone with experience in this area. You have had some great responses

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