What's with this Tax Advantage?

NurseWeasel · Apr 15, 2007

From the little I understand about this, the difference between TA and not doing TA is whether or not you claim deductions for your travel expenses (etc) on your taxes at the end of the year. You still end up paying the appropriate amount of tax, it's just a matter of having the money in your pocket vs. getting a refund... or, depending on how well you estimated your taxes, having to pay a whole bunch of taxes or not so much.

Anyone else?

robbsrn · Apr 15, 2007

I am starting my first travel assignment next month. Any suggestions where to get more information about this tax stuff?

Medic15251 · Apr 16, 2007

"I am starting my first travel assignment next month. Any suggestions where to get more information about this tax stuff?"

robbsrn:

Yeah, a CPA! You can also check out the irs' website.

maritimegirl · Apr 21, 2007

I too was a bit unsure of all this at first, but it is legit. If you were to not take the tax advantage, at the end of the year, lets say you show you made $60,000. You could then probably deduct $25000 for the expenses you incurred for housing, food, gas, mileage, etc., and you'd get a big chunk of money back. By taking the tax advantage, you can skip this step, and pretty much just break even. Just keep all of your receipts so that if you ever do get audited, you can prove that you did spend all that tax free money on what you were supposed to.

AU-RN1969 · Apr 22, 2007

That's how it works. You have to itemize to make it worth your while, but it all "works out in the wash". I know a nurse who has done this for 13 years with TA and has never been audited.

LadyNASDAQ · Apr 25, 2007

You do realize that if you became disabled and needed social security disability you would receive it based on your $10/hr. Also, you will be paying in a heck of a lot less in social security. You can't write off anything. All you're getting is your own money up front.

The word is REFUSE those jobs. A higher possibility of being audited by the IRS anyway.

Medic15251 · Apr 26, 2007

You do realize that if you became disabled and needed social security disability you would receive it based on your $10/hr. Also, you will be paying in a heck of a lot less in social security. You can't write off anything. All you're getting is your own money up front.

I would have to disagree. I would ask your company if they offer long term disability insurance if the $10 hr bothered you. Also, I don't know your age, but I'm 23 and have no expectation of receiving any social "insecurity". If there was a way to, I would love to not even pay it. I would much rather receive "my own money up front" instead of giving the irs a interest free loan for a year!

LadyNASDAQ · Apr 27, 2007

I used to be 23 y/o, too lol. That saying has been around a very long time. At age 48 y/o, I definitely pay attention to those Social Security guestamate yearly forms they send out. I am aware that your thoughts are that you won't receive a dime later on. That isn't true and when you add 20 years to your age and start looking at what age can I retire if I had to, you will think twice about that Tax Advantage Plan. It robs you of tomorrow's ss# earnings. Travel pay is a good $10/hr. lower than it used to be. To take Tax Advantage is really no advantage in years ahead . The worst part is being a potential targe for auditing by IRS. My Tax Accountant won't do my taxes if I were to work like that since she won't represent me. She calls it the lie that snowballs. I called IRS and asked them what they thought. Evidently they are doing audits all the time because if you don't have receipts to show every dime of your per diems you received you will pay them back with penalties and interest. Truly not worth my time, troubles or concerns. The more I hear about the disadvantahes the more I dislike the whole concept and personally stay clear of those companies that insist on paying this way.

Learn to invest your money well. I've carried a diability insurance policy since age 20. As time moved forward, I bought a second and a third one. I also learned the power of the stock and bond markets. I think that Tax Advantage will find you problems in the long run and you should think again IMHO. You're young enough to get into trouble with this early in your career and be audited year after year for a long, long time.

aberrn · Apr 27, 2007

Thanks for all the comments and input.The company I have taken an assignment with does the TA.. It will only be for 13 weeks,so you can believe I will be keeping ALL reciepts and paperwork [i usually do anyway for tax time] And I only intend to do the one assignment.

ljb · Apr 28, 2007

This thread has been helpful, but has raised some new questions for me on the topic.

The agency I just signed with (first assignment--excited!) does NOT do the TA program. Does that mean then, that I should be saving all of my receipts (food--ie groceries, dinners out?, gas, shipping costs, etc) so that I may take them all as deductions at year end? Someone earlier in the thread mentioned that (rather than get the tax-free pay), you submit receipts and take upwards of $25K in deductions...that much?

I guess my question is, as a new traveler (not getting any "TA" pay), what kinds of receipts should I be saving? What is deductable? What not? I know...contact a tax preparer. Will do... But what your thoughts/experiences on this as fellow travel nurses?

MrChicagoRN, RN · Apr 29, 2007

Have you tried checking out the IRS website?

They put out very detailed examples of what is allowable & what isn't.

You can even call up the IRS & ask them.

Sure, they might give you the wrong answer, but it's a start >LOL