Travel Nurse Employment: Tax Advantages of Per Diem Deductions

Travel Nurse Employment: Tax Advantages of Per Diem Deductions



Savvy travel nurses know that they are eligible to save hundreds, if not thousands of dollars by understanding that they can take per diem deductions for every day that they are on temporary assignment away from their tax home.


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When you are a travel nurse, then you need to have a pretty good understanding of per diem rates and how they might lower your taxes. Many travel nurses believe that per diem is only a tax benefit that staffing agencies offer and yet, surprisingly, others do not. This misunderstanding about what per diem is and how it may affect your taxes is an essential financial issue that you need to understand. How you report, your per diem earnings could mean the difference in thousands of dollars in tax savings.


Whether you are looking to maximize deductions, reduce taxes, or increase your returns, travel nurses should take the time to learn as much as possible about the IRS per diem tax rules. Indeed, one way to learn is to go to the IRS home page, download publication 463 and read the rules so that you have a working idea of what to expect by tax time next year. Another great resource, especially, nowadays is to do your taxes yourself if you have a personal computer or laptop. Turbo Tax is a great software program. Not only is it inexpensive and tax-deductible itself, but it is straightforward to work when you use the step-by-step wizard. You can walk through your entire tax return, and file it electronically. You can get your refund deposited directly into your checking account in a matter of days.


A couple of travel expenses to have a heads up about include:

  • The travel nurse has a permanent tax home.
  • The travel nurse takes a temporary (less than 12 months) assignment away from their tax home.


Any travel nurse meeting the requirements outlined by the IRS can claim deductions for certain travel expenses or receive tax-free reimbursements and tax-free per diem allowance payments. These tax benefits are one of the great perks of being a travel nurse.


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Unfortunately, one of the most common tax mistakes that a travel nurse makes is not being educated or even aware of the tax advantages to per diem deductions. Now that you are aware that savvy travel nurses are eligible for per diem deductions for every day that they are on temporary assignment away from their tax home, pass on the work to your co-workers, or email them this article so that they can bookmark this overview and take advantage of these tax benefits themselves.


It is essential to be aware that some companies don’t pay per diem allowance, pay too little per diem, or only pay per diem as a function of hourly pay. You can learn what these scenarios mean for your tax situation by consulting with a tax advisor or researching the IRS rules. You deserve to get every dollar of per diem related deductions that you are entitled to, and we hope that this article has helped you.


Note: while much care has been taken to make this article accurate, tax rules do change. Please be sure that you are up-to-date on the latest IRS rules. This article is meant for informational purposes only and is not intended to replace the advice of a skilled tax advisor.


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