Whether you’re a seasoned medical traveler or this is your first year out in the field, you likely feel tax season looming over you. You probably didn’t get onto this career path because you love complicated taxes, but alas, it comes with the territory.
You may have to manage taxes in multiple states and face circumstances the average non-traveling worker doesn’t have to deal with. Maybe you’ve made some mistakes on your taxes in past tax seasons, but don’t worry—you weren’t the first and won’t be the last.
We can learn from the mistakes of the travel nurses who came before us. Moving forward, keep these common missteps in mind so you don’t have a headache come April 15.
Mistake 1: Not establishing a tax home.
The cool thing about medical travel is that we get to explore all different parts of the country and call lots of cities home. As much as we travel, though, it is helpful to maintain a home base for tax purposes. If you have one city where you make one-quarter of your salary in or have a permanent residence or return to frequently, then you can claim to have a tax home. You just need to prove you have strong financial ties to one place.
What happens if you don’t have a tax home? Well, you can probably say goodbye to your tax return. If you want to qualify for any kind of deductions, then you need to prove you have a home base. You can only really deduct your travel expenses if you have a place to call home, even if it’s a looser definition than most.
Mistake 2: Not traveling enough.
The other side of the tax home coin is not traveling enough. You may totally fall in love with a place not established as your tax home. Be wary though—if you start to spend too much time in one place away from home, it could undermine your tax home claim.
It’s difficult to define how long is too long to spend in one place, but the rule of thumb is to make sure you work in your tax home more than anywhere else.
Mistake 3: Not reading your contracts.
Your contracts are the one place you’ll find your exact compensation and where that payment is coming from. Pay close attention to your contracts before you sign them and be sure to keep them on hand throughout the year so you have a record of exactly how much money you’re making.
Each contract is a piece in your financial puzzle,detailing where you worked, how you were paid, where the money came from and how much you made. It can be extremely useful to know all of this about your finances because you don’t want to get caught without proof of your income.
Mistake 4: Forgetting to file in every state you worked in.
Wherever you earn income, state taxes will be due—tax home or not.. Your medical travel agency also can pay some taxes for travelers like you, so it can seem like a lot to be so thorough with your filings.
Still, you have to file your taxes in every single state you worked in for the past year. What you pay in each state will vary by how long you were there and their laws. Filing in multiple states doesn’t have to be intimidating—with plenty of services available to help you, handling your taxes now is much simpler than having several states knocking on your door later.
Tax season may not always be a breeze when you travel for a living, but it doesn’t have to be scary. With the lessons learned by medical travelers of the past, you can manage your taxes like a champ.