Traveling without a tax home

[B_OTT]

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?

[NedRN]

Sure, you can always give a gift without taxes. The problem would be tying a gift to another transaction to avoid taxes. That is illegal. Certainly you don't want to put it in writing. It also does not avoid taxes on events like receiving rent.

[hopefultraveler]

Is there a minimum rent payment one would need to have in order to qualify for tax free allowances on travel? For example, if I pay my aunt $100 a month to rent out a room and use her address as my permanent address and tax home, will that be enough to qualify me legally for the tax free benefits of traveling?

[NedRN]

TravelTax says fair market rent. I wouldn't go that far, but I don't think $100 a month looks like a legitimate bargain either, even if you are usually gone 90 percent of the time. There needs to be some reasonable payment, or services in lieu of, or perhaps historical or familiar reason. There are some nurses who have never lived away from home for example so a rent history may not be applicable. But those travelers are one percenters to be sure! Even if you pay $400 a month rent, you will be ahead in tax savings and that will be much more defensible in an audit. It would in fact be a good deal for both of you unless they need full fair market rent and don't mind a full time roommate.

[hopefultraveler]

Yeah that's true!! $400 a month would still save both parties money. I have an aunt who lives alone who would probably be willing to allow me to use her address, especially if I pay her $400 a month while not even being there. Even though she will have to report it to the IRS, she will still come out ahead. Awesome! Thanks!

[NedRN]

You do have to legitimately live there. At a minimum a room for your exclusive use that you can return to at any time. The IRS says you have to return home "regularly", which is not defined. I would return at least once a year, which of course you would do anyway if it was your home. If you are just purchasing an address, it is really no different than a post office box.

Depending on your resources and local property values, consider buying a starter home. With the help of a roommate your mortgage payments may not be so different from rent. Then you are building equity and may even have some investment potential.

[dutchie]

I also understand that you have to work when you're at home at your "tax home". Is there an amount you need to work, or make, to have it still considered tax home? My tax home would be about 70 miles from my home workplace when not traveling. Does that matter?

[NedRN]

You do not have to work at your tax home. It certainly helps to solidify it, but what do you do if there are no jobs? That is my situation, I have never worked at home for that very reason although I would like to.

I'm not following your tax home is 70 miles from home when not traveling. Do you commute, do you have two residences?

[Azariahjoe]

It has to be discussed with a professional i guess and they can actually give you the suggestion according to your needs becasue in the same way it is fine enough for me to see something which goes like this so yeah.

[morningland]

Do not take this as advice, ALWAYS SPEAK WITH A TAX PROFESSIONAL.

But, as it was explained to by a travel nurse tax company, one work around is to have mail delivered to a location and simply pay rent in your tax home. The company I was working with wouldn't even give your buisness if it wasn't legit and they said that this would have been legit. You just need to have lived there before, pay rent and come back for a period of time once a year.

Can someone validate if this is true?

[NedRN]

That is partly true but there are other factors involved in maintaining a valid tax home. Any agency has a vested interest in paying you with a tax home so their advice cannot be trusted.

You cannot trust any tax pro, they must have specific experience with healthcare travelers. That said, you can rely on the articles in PanTravelers and TravelTax. But you must read them carefully if you want to try something tricky without professional advice.