Tax Tips for Travel Therapists
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Nothing makes you feel more like an adult than filing taxes every year. Like being an adult, it can make you feel overwhelmed and uncertain. Are you doing your taxes correctly, are you missing something? Here are few details every travel therapist should know when doing their taxes.
What is the difference between a tax home and a permanent residence?
A tax home exists for the purpose of deducting work-related travel expenses. The IRS defines it as the “entire city or general area” of your workplace. If your work is near a border, your tax home can even cross state lines. It depends on the region and not specifically the state. Your permanent residence is the address you maintain legal ties to. It’s the one you would use on your driver’s license, voter’s registration, or car registration. If you have multiple workplaces, as travel therapists often do, the IRS asks that you choose one as your tax home. These are the criteria that you should use tomake your decision.
- How much time you spend in each area
- How much money you make in each area
- How much work you do in each area
What paperwork should I keep throughout the year?
When it comes to paperwork, the more the better. It’s always best to have what you don’t need, rather than the other way around. You should keep copies of all your contracts. While we try to help with as much as possible, it’s always important to keep a copy just to be sure. You should also maintain a log of all your mileage. Keep a printout of the distances to and from each assignment and from your housing. We recommend keeping any receipts related to travel expenses. This may seem daunting, but if you document and keep receipts safe throughout the year, you’ll be much happier by the time tax season rolls around. You need receipts to justify certain travel expenses such as hotels during work-related travel or gas if you’re renting a car. Remember to also keep any receipts related to certifications and licenses. Here are a few other common items travel therapists may deduct:
- Association fees
- License fees
- Uniforms (that you had to provide) and upkeep, such as dry cleaning
- Business supplies and medical equipment
- Cell phone and internet services
In which state do I pay my income taxes?
You are responsible for paying taxes in the state that you work. Of course if you work in more than one state throughout the year, it can be a little complicated. Income tax generally depends on if and where you have a tax home, how long you were in the state and how much you earned. Keep in mind that some states have agreements where they don’t tax each other’s residents. If you’re looking for states with no income tax, these would be: Alaska, Nevada, Wyoming, Texas, Florida, Tennessee, New Hampshire, and South Dakota.
As always, if you have any questions or concerns you should contact your recruiter. They’ll be happy to explain anything covered here and can help you out if you have a particular situation. Are you looking to start your travel therapy career? Apply below!