Nursing is an attractive career for those who want to serve others while enjoying challenging work, competitive pay, and the opportunity for professional growth. If you’re a nurse, keep in mind these tax tips to maximize your potential refund.
Itemizing your tax deductions can potentially reduce your tax burden compared to taking the standard deduction, depending on the total amount of your deductions. Nurses might be unaware of certain professional deductions they can claim on their tax returns, including:
The U.S. recently passed the most comprehensive tax law changes in 30 years. Here’s what nurses need to know about how their taxes will be affected. Per diem rates and stipends are not treated differently under the Act. Travel nurses can still receive stipends for meals and other reimbursements.
However, because the standard deduction has been raised to $24,000 from $12,500 in 2017, many nurses may no longer be able to itemize deductions. For this reason, consider negotiating higher pay rates and higher reimbursements if you take on a new job assignment.
If you are one of the few nurses who works as an independent contractor, you will now receive a 20% deduction on income that is subject to self-employment tax (also called pass-through income). This may include agency income paid with a Form 1099. If you’re not sure how much of your income is taxable or how you are classified as an employee, check with the staffing agency to confirm.
Whether you are an LPN studying to become a registered nurse, a registered nurse pursuing your bachelor’s degree, or on the path to a career as a nurse practitioner by earning a master’s degree, you can deduct all or part of your education expenses, depending on how your employer reimburses these costs.
Coursework is tax deductible as long as it supports your current line of work and does not qualify you for a new line of work. This means that if you are working toward a higher-level nursing position, you can write off tuition, books, fees, and other costs associated with earning your degree.
Travel nurses have a few complexities when it comes to filing annual income taxes. Some considerations to keep in mind include the following:
To maximize your tax deductions, make sure you save every receipt associated with nursing job expenses. This includes everything from a cup of coffee at the airport while traveling to your next assignment to cab fare when traveling from one patient’s house to the next. With smartphone apps, it’s easier than ever to track your work expenses. These allow you to snap a picture of the receipt and tag or label it, so it’s easy to find when tax time rolls around. Some programs even allow you to send the digital files directly to your CPA.
The bottom line? If you’re overwhelmed by tax preparation, consult with a professional about your income, expenses, and deductions.
If you’re a nurse who is struggling with back taxes, credit card bills, or student loan payments, seek assistance from Solvable today. We can match you with back tax assistance programs with great reviews that will help you get ahead of overwhelming payments.