Traveling without a tax home

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I am trying to figure out how tax advantages work exactly. I know the criteria for a tax home and do not plan on having one so no need to repeat what it takes to have one.

I planned on being on constant different assignments with agency placing me in extended stay/small apartment at each assignment.

Without tax advantage will it be just like making a normal wage, staying at one hospital, and paying taxes as I normally would? Is the pay any higher in this case or is travel nursing advantage entirely dependent on tax advantage? I was considering just purchasing a home and having a family member live there for half mortgage(much less than rent would be for them) but not claiming they pay anything.

Also when you have a tax home the agency still sets you up in extended stay/small apartment correct?

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Yes, if you are itinerant, your home is wherever you are, just as with most ordinary employees. So all compensation will be taxed, including housing. What you are currently making will determine whether a particular assignment pays more or less. Typically even taxed, you will take home more because the benefits are less. This is why hospital per diem pays more (or should) than full time staff because you are not receiving any benefits (about 30 percent of the cost of a full time employee).

Getting a roommate or family member to live in a house you buy is a good plan (it does preserve tax home status), but you have to report the rent as income. You may be able to depreciate your house to help offset that income, but in any case, you will have a mortgage interest deduction if you finance.

Having a tax home is irrelevant to an agency supplying housing or a stipend, only the taxation of the compensation (if you have a tax home, technically a stipend is a reimbursement).

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I am so glad you raised this question, because I am also having difficulty with this. I have been doing extensive research the past few weeks on travel nursing, and the thing that has stumped me the most is the concept of the "tax home" or lack thereof.

I plan to begin my travel nursing career this summer, but I do not plan on having a permanent address of my own. According to my recruiters, I can use a family member's address as my permanent one and still qualify for the tax benefits...this doesn't seem right to me. When I inquire further about it, my recruiter assures me that they are working with many nurses who are in my situation as well, and are all getting the tax free allowances.

Can anyone shed any light on this subject for me? I am truly stumped.

Do I use a family member's address and forward all mail to wherever I am living at the moment? Do I work as an itinerant worker and lose the benefit of tax free allowances?

Please help! Thanks in advance

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Yup, recruiters say that all the time. But recruiters are not at your audit, nor will agencies cover your back taxes, penalties, and interest. My rough calculation is that these could be as much as $50,000 after three years of full time travel. And yes, it is true that many travelers are doing this and have not been caught. The risk is that if you get audited for any reason, that you will have a life changing debt.

If you want to examine the risk/reword ration for you personally, the tax benefit is about $10,000 a year (in the bank) for most travelers. You can also examine the cost of maintaining a tax home versus that amount (rent, mortgage, utilities) to see if you come out ahead versus being itinerant.

You can do a lot more reading about tax homes and travel at PanTravelers and TravelTax.

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Thanks for the reply, Ned!

My recruiter seemed so surprised I was raising those questions and said that he had never heard of these issues before in all his 12 years of experience...hmmm.

What if I used a family members address but actually paid that family member in rent every month to rent out a room? Would that be legal and allow me to legitimately qualify for the tax free benefits?

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Yes, and you can be the primary home owner or renter and share your home with roommates and it will qualify. Mind you, a tax home has a lot of factors/variables and you can strengthen or weaken it with appropriate measures.

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I asked my tax guy about this last month or so. He said your tax home needs to be 50 miles from the hospital and that I should be OK without a residence because my car, DL, and car insurance are all registered in my home state, and I have my name on a PO box. He said having a storage unit would be good too. Fingers crossed and good luck!

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Wow! Completely worthless "tax guy". Every single word is wrong. Ask him if he covers malpractice if you are audited. You do not pay rent and you do not have a tax home. You are itinerant for tax purposes. A storage unit is not a home. Distance from a real tax home (not your PO box) has no bearing on the real criteria for deductible business expenses working away from home - the fundamental criteria is if the nature of the job requires an overnight stay. For example if you are on call and a 20 minute response time is required, then even 20 miles away won't cut it.

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Yeah, I completely agree with NedRN. Your tax guy doesn't know what he is talking about. Here is a link to a great website's FAQ page about travel taxes.

http://www.traveltax.com/html/TaxEdTravelling.html

If you do not have a real tax home (a permanent address that you either pay rent or a mortgage for) you will be in big trouble if you get audited. PO boxes don't work. If you want to legally receive tax free benefits from the travel company, you will need a permanent home. Otherwise, you will have to travel as an itinerant worker and be taxed on those allowances.

I plan to use a family member's address and write up a contract with that family member stating that I am renting out a room and will pay them a couple hundred dollars a month. This will allow me to use that address as a permanent address legally. If you do this as well, keep in mind that the person you are renting a room from will need to claim your rent as income on their taxes.

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If you do this as well, keep in mind that the person you are renting a room from will need to claim your rent as income on their taxes.

Just to add: reporting rent as income is the landlord's responsibility, not yours, and it does not affect tax home status. No doubt TravelTax points this out because otherwise some may believe that there are no tax consequences at all to doing this when they try to talk friends or family into participating.

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Right, it is definitely their responsibility. I just wanted to add it in there because if you are claiming a friend or family member's address as your tax home and you are paying them rent in order to qualify, you probably want to let them know about having to claim that rent as income on their taxes because you care about them and want them to fully understand what they are getting into by agreeing. :)

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Hey NedRN, correct me if I am wrong but I also read in my research that you are allowed to gift an individual up to $20,000...so if you are paying rent to a family member couldn't they gift that money back to you? Would this still qualify a person for the tax free allowances? I am just trying to figure out the best way to go about all of this. Thanks for your help!

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