Travelers!! A Q for you

[raindrop]

I contacted a very reputable traveling agency. The recruiter was very helpful and seemed to be honest, but I just want to make certain that I have got it right as this seems too good to be true.

The recruiter to told me that if I accept a contract away from home, that the agency will either

1) place me in their housing close to the hospital I will be working at - for free

2) Give me an allowance which will pretty much be enough to pay for my hotel room or an apartment.

She said this is all an allowance, and it will not be reported at the end of the year to uncle Sam, therefore I won't have to report it either. She did tell me that any bonuses that I get will have to be reported, though.

Now, A friend of mine said that she heard that I won't have to report the traveling/housing allowance either, as long as I can prove that I have a permanent addy elsewhere. If I can't prove it, I will have to pay high tax amount at the end of the year.

Now, if my friend is right, how will this affect me - I still live at home with my parents. I can still use their addy as my "permanent" addy, but I'm not paying rent or anything now.

[js142430, BSN, RN]

I'm not a tax professional and I don't play one on TV but I work for a physician group that frequently uses traveling nurses. As far as I know, unless the "allowance" is paid directly to the hotel/temporary housing vendor instead of directly to you, you will have to report the allowance as income. Anything paid to you above $500 that isn't taxed via regular payroll, the agency will have to submit a 1099 (like a W-2) to you for. Which means you could be stuck with taxes. I'm not sure what the business expense deductions would equate to but I would consult a professional on this one. Start by researching http://www.irs.gov or even call a GOOD accountant. There are quacks out there, like in every profession. If you plan to travel full time, the taxes you'll be "stuck" with could add up. I'm not saying that the agency is lying to you but it doesn't sound right and your best bet in this situation would be to consult the experts.