Understanding Pay (Wage) vs. Per Diem

hotdemos · Mar 14, 2013

Presumably you are just playing devil's advocate? You already have a mortgage?

I do not have a mortgage. My house is paid for. But you are giving working travel nurses awful tax advice. The tax advantage plan only benefits the agency. The IRS is targeting companies that offer the tax advantage plan. Nurses' Taxes & Accounting - Centurion Tax Resolution

hotdemos · Mar 14, 2013

If there are no profits left in a corporation (zero-balancing it), there are no corporate taxes.

So your business does not make any profits??? Who goes in to business not to make a profit??

hotdemos · Mar 14, 2013

But I can tell you that I don't put blind faith in labels such as RN, MD, or CPA. Nor do I put a lot of credence in some random internet poster who cannot cogently argue points that is copied and pasted from other sites and says that 99 percent of travelers and their agencies are doing something illegal, and that is more beneficial to trust your CPA despite not being able to counter any of the facts I have posted here.

Unlike you NedRN anything I copied or pasted from another site I stated the source. Unlike you NedRN I am a real travel nurse and you are an imposter. I am not a radom internet poster I am a real person. Thanks, Steven Smith BSN, RN, CCRN, CEN

hotdemos · Mar 14, 2013

Interesting that every agency offers so-called Tax Advantage.

info from real tax pros Nurses' Taxes & Accounting - Centurion Tax Resolution

hotdemos · Mar 14, 2013

Interesting that every agency offers so-called Tax Advantage.
info from real tax pros Nurses' Taxes & Accounting - Centurion Tax Resolution

BluntForceTrauma · Mar 15, 2013

info from real tax pros Nurses' Taxes & Accounting - Centurion Tax Resolution
Can you please tell me what you have deducted that is over $6100 while traveling for a year?

FutureCRNA?, BSN, RN · Mar 15, 2013

Well I've never been a travel nurse, but have been self-employed for 90% of my adult life (in LLC's, partnerships and a sole proprietorship). I didn't really see anything Ned said that seemed wrong or inappropriate.

Not making a profit doesn't mean a company isn't viable. Specific tax breaks exist that companies or small businesses can take which reduce profit, whereas an individual can't.

You may not look like you make much as a self-employed individual, but banks know how to work with you and how to add income back in that was deducted for tax purposes. It's obviously not as easy or as straightforward as a regular paycheck and not all banks will work with self-employed individuals. But if you can show documentation of additional income, even if its written off, of course you can get a mortgage on what looks like $24,000/year ($12/hour) or even much less, depending on your financial statement.

And again, Ned is correct, you aren't necessarily taxed twice, for instance an LLC, partnership or a sole proprietor (which is what I'm familiar with) is only taxed on their share of profits, of which is considered their income and the business isn't taxed at all, it flows through to the partners.

Unless you consider paying double social security and double Medicare being taxed twice (as an individual you will pay your half as well as the company's half whereas normally the company you are employed by pays that half instead). I haven't been self-employed since tax year 2010, but if I remember correctly isn't the percentage 7.5%??? But if a lot of your income is written off, it doesn't about to a ridiculous number.

Regardless, there are great tax benefits to being self-employed and as a travel nurse, it sounds like there are a lot of legitimate write-offs. Who cares if it only looks like you make $24,000 a year?? Is it pride or what? If its a loan, shop around, there are some great banks out there, for instance we have a long-term relationship with one that we used exclusively during self-employment an still today. We have developed a great relationship and they know us by name.

FutureCRNA?, BSN, RN · Mar 15, 2013

Oh and I'll also say that in the early days of self-employment, we hired an accountant to do our taxes. As time went on though, I got smart and learned how to do them myself, what deductions are perfectly legal to take and how to legitimately decrease our gross income to show the least possible. I think people should be familiar with profit & loss of a business and know what kind of deductions they can take to optimize their tax rate to their benefit.

Why show $80K on your tax return when you could legally show $20,000 and pay WAY less taxes?! It's no scam, it's just smart business.

NedRN · Mar 15, 2013

info from real tax pros Nurses' Taxes & Accounting - Centurion Tax Resolution

Is there something in this link that supports your contentions? I don't see anything that disagrees with anything I said.

At the risk of feeding a troll, here is how business works: you have revenue, you have expenses. When they equal each other, you have zero business profits. That doesn't mean that you have not done well. At the end of the year, I figure out how much money is left over from my revenue after all my expenses, and pay myself the balance in retirement contributions and regular payroll. My payroll is a business expense so zero money left at the end of the year in the corporation. Zero balance, zero corporate taxes owed. Pretty simple math. Most folks have LLC's or S corps because that is too much work to avoid double taxation. Net result: either system avoids double taxation so the IRS doesn't care. I still have to pay income taxes and payroll taxes.

There is a bit more to the benefits of doing it the way that I do, but perhaps you get the basic idea.

NedRN · Mar 15, 2013

Why show $80K on your tax return when you could legally show $20,000 and pay WAY less taxes?! It's no scam, it's just smart business.

Thanks for the back up. It is unfair to ordinary employees, but Uncle Sam provides tax benefits to businesses.

Lots of CRNA's are 1099, so your prior experience as a sole proprietor should pay off. Do carry adequate malpractice insurance or work for someone who does! I doubt you will be allowed to, but just saying - don't cut corners there. You may or may not benefit from forming a business entity, but it seems like a lot of both anesthesiologists and CRNAs don't bother.

hotdemos · Mar 15, 2013

Well I've never been a travel nurse, but have been self-employed for 90% of my adult life (in LLC's, partnerships and a sole proprietorship). I didn't really see anything Ned said that seemed wrong or inappropriate.

Of course there is nothing wrong or inappropriate with what NedRN is stating if you are both the employer and employee. The tax advantage plan is great for NedRN because as he stated he is self employed. For Travel RNs who work for an agency and do not own the agency, the tax advantage plan is a disaster. You will net more income by being paid a higher wage and taking your deductions when you do your taxes.

hotdemos · Mar 15, 2013

But if you can show documentation of additional income, even if its written off, of course you can get a mortgage on what looks like $24,000/year ($12/hour) or even much less, depending on your financial statement.

The days of stated income and stated assets are gone. Most banks will only accept your taxable income. Of course you can include alimony, child support, but banks will not count per diem income. Please name a few banks that do business like that I will be glad to call them.