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It’s tax season, so it’s the perfect time to talk about the top 5 tax advantages that a travel nursing career can bring to your life. Travel nursing not only offers an opportunity to explore new places and advance your career, but it can also provide significant tax advantages. Understanding and taking advantage of these tax benefits can make a huge difference in your overall financial health while on assignment. Let’s dive into the top 5 tax advantages of travel nursing and how you can make the most of them:
Top 5 Tax Advantages of Travel Nursing
1.) Tax-free housing stipends
Many consider the most significant tax advantage of travel nursing to be the tax-free housing stipends travel nurses get when they arrive at their new destination. Instead of receiving traditional housing benefits, travel nurses can receive a stipend to cover housing expenses while on assignment. These stipends are typically tax-free if specific criteria are met. Utilizing tax-free housing stipends can help travel nurses reduce taxable income and increase their take-home pay.
2.) Per diems for meals and incidentals
In addition to housing stipends, travel nurses may receive per diems (daily allowances) for meals and other expenses. Similar to housing stipends, per diems are often tax-free if certain requirements are met. With per diems, you can offset your living expenses while on assignment and potentially further reduce your taxable income.
3.) Travel reimbursements
Another tax advantage of travel nursing is travel reimbursements. Travel nurses can be reimbursed for travel-related expenses related to their transportation and traveling to and from their assignments. These reimbursements may include airfare, lodging during travel, gas mileage, and other transportation expenses. Depending on the specific terms of your contract and tax regulations (consult a tax professional with any questions you might have), travel reimbursements may be partially or fully tax-free.
4.) Deductible work-related expenses
When it comes to travel nursing, travelers often incur work-related expenses that may be tax-deductible. These expenses can include license and certification fees, uniforms, continuing education courses, and professional association memberships. Additionally, travel nurses may be able to deduct the costs of things like rent or mortgage payments, utilities, and home office expenses. By keeping detailed records and consulting with a tax professional, travel nurses can identify and maximize their eligible deductions.
5.) Retirement savings opportunities
Travel nurses can take advantage of retirement savings opportunities through employer-sponsored retirement plans like 401(k) plans. Some travel nursing agencies even offer retirement plan matching contributions, providing an extra incentive for nurses to allocate some of their paychecks for their retirement plan while on assignment.
Travel nursing presents many tax advantages that can help you improve your financial health while you’re on the road. From tax-free housing stipends and per diems to deductible work-related expenses and retirement savings opportunities, travel nurses can consult a tax professional to see what kinds of tax advantages they have at their disposal to minimize their tax liability and maximize their savings. By understanding these tax benefits, you can make the most of your earning potential and reap the financial rewards of a travel nursing career.
Note: Medely does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only.
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