In this article, we want to answer some commonly asked questions about the changes coming with the new tax plan enacted by the Trump Administration on December 22, 2017.
The plan was created by the “Tax Cuts and Jobs Act”, which was signed into law with a final tally of 224-201. These changes went into effect January 2018 and are applied to the 2018 tax year.
The main change that everyone is talking about is the update to federal income tax brackets. The updated brackets look like this:
Travel nursing often comes with a number of benefits that may be affected by this new tax law. Let’s answer some of the questions you might have about them.
As we mentioned before, the biggest change is that many of the deductibles you could once declare are no longer deductible. This means things like travel-related expenses, licensing costs, or continued education costs cannot be considered a deductible on your tax return. We recommend reading this in-depth article looking at the major changes introduced if you want to learn more.
No - the new law doesn’t affect per diems and stipends. Your employer can still give you allotted stipends for housing, meals, travel pay, incidentals, and other reimbursements you would normally receive from the employer.
The main change is you will no longer be able to deduct expenses for extra miles traveled beyond your stipend or expenses for meals or housing that exceed your per diem.
These changes do not mean you no longer need to keep detailed records going forward. Because employers can still give you housing stipends, meal allowances, travel pay and other reimbursements it’s important to keep all records related to these allowances to cover all your bases.
That’s up to your employer to decide. Your employer may decide to adjust the structure of your pay package to help accommodate for travel, licensing or CEU costs. Since these are no longer covered by deductibles, your employer may reduce the amount given for housing or meal allowance to help pay for other areas.
There are a few things you can do depending on where you find you’re spending more than you can afford for your travel assignments.
Here are a few helpful resources to reference to learn more about how to do your taxes as a travel nurse:
There you have it! The new tax law is complex and there are many changes that were made, but hopefully you feel a little more informed going into the new tax year.
Important Disclaimer: We aren’t CPAs or by any means experts on this subject. We strongly suggest talking with a CPA who has experience working with travel nurses to help you find the best rates for your specific situation. This article is intended to give you a place to start thinking about this very important part of your career.
Best of luck!
The Nomad Team