understanding tax homes

[Isabel NI]

Hello!

N00b to travel nursing, and I have questions about how tax homes work/filing taxes.

So I live in city X, but my parents live in city Z which is 60 miles away (I still receive DMV mail there and will occasionally sleep over), I still have a part time job near city Z (which is why I sleep over there). However, I was looking into contracts near city X. I was reading about tax homes and based on what I've read, it does not necessarily have to be the same as your permanent residence. Therefore, since I make at least 25% of my income in city Z and occasionally sleep in city Z, would I still qualify for tax free stipends if I take the contract near city X?

Also, how does this work when filing taxes? How do you declare your stipends? I usually file my own taxes online, but I'm thinking I might have to get a pro to file my taxes if I go ahead and take any contracts.

I've searched and read through several posts asking about the whole tax home issue. I've seen answers as simple as "just pay for anything, even meals/groceries" to more elaborate as changing the address, paying fair market rent, etc.

I don't plan on taking travel contracts on a consistent basis as working 2 jobs (1 full time and 1 part time would kill me), maybe twice a year, three tops if I have the energy

Thanks!

[NedRN]

Yes, fair market rent is a criteria for a tax home. I assume you are not paying anything now. It might be helpful to think of a business person on a trip away from home. He is paying fair rent or owns. Thus any expense occurred away from home is fully deductible as a "duplicated" expense (usually by the company). This is exactly the same basis as travel reimbursements. If you don't have a tax home, all housing and other stipend reimbursements are fully taxable. No, you cannot pay fair rent for just the two days a month you are at home, it has to be full time.

If you have a tax home and are legitimately working away from home, then all those stipends are technically reimbursements (an expense to the agency) and do not need to reported to the IRS. However, if you are audited, you do need proof that you have a tax home and incurred legitimate expenses while working away from home. Your travel contract seems like it should be enough, but receipts can be super helpful if you are audited for any reason. If you are couch surfing with a friend for free, then you have not incurred housing expenses and the housing stipend is taxable. If you are commuting to a travel contract from home, mileage is irrelevant, you do not qualify for any non-taxed compensation.