Top 5 Tax Questions for Nurses, Answered
Carlos Navarro | Scrubs Magazine
Tax prep is about as fun as getting a physical or renewing a driver’s license. Sorting through a year’s worth of receipts and paperwork can be confusing and leave you with the nagging feeling that you’ve missed out on meaty refund dollars or paid more than required.
Here are five insightful tax deduction tips from experts and fellow nurses that may reduce your tax pinch and ease your future filing events.
1. What the heck do I keep and what do I toss?
With taxes, “when in doubt, throw it out” loses to “unsure today, file it away.” Keeping receipts is key to end year results. “We keep everything tax-related” is the solution for Brenda Wilson, RN. You may not know until filing time which ways of filing best benefit you. Plus, you can’t predict what other “tax events” could occur during the year that may later change how you file your return.
2. Why does that nurse get travel deductions?
“My wife’s a nurse…uniforms and equipment are no question, but we debate over the cell phone expenses,” remarks Tony Montcalm, member of the Administration team at Tanner Health System. The deductions for which you may qualify are unique to your professional role and to your filing status. Travel nurse expenses, contract employment or required continuing education create very different tax landscapes than the school nurse interviewed in Montana with one W-2 and no professional expenses. Even if you don’t itemize deductions, some expenses may qualify for “unreimbursed employee expenses” (known in tax jargon as “2106s”). Tax forms are the only thing about filing that’s one size fits all. To discover what will work for you, spend some time at irs.gov. Check out IRS publications 529 and 463. Also search the “individual” and “small business” tabs from the IRS home page. You can learn and share at the tax blog: taxreturnsfornurses.wordpress.com. Put your specialty or designation into a search engine to find discover insights matching your role. You’ll find places with specific tax resources, like rnnetwork.com/travel_nursing/resources.
3. Why try to itemize if I never get past the base percentage?
You incur professional expenses year-round that may or may not benefit you, depending on your use of the Standard Deduction. “My expenses never get past the base percentage, so I never use them,” says Angie Esparza, CMA. Is this you, too? If you’re new to nursing, you may be surprised to find how much you actually spend to maintain your profession. Tip: If your expenses do not result in itemized deductions, the data may still help with the family budget or negotiating a raise.
4. Can someone please tell me how to list my education?
What about improvement education, like following up your BS degree with an MS? According to our sources at the IRS, education costs could either be an adjustment to income, a business expense, a credit or a deduction…or none of these. The starting advice on the education question: Check with your employer or review the terms of your contract. Nurse professionals need resources and research to get to your right answers. Give the “prep” part of tax preparation more energy to tailor those broad IRS Codes to your particular situation. Choose a tax prep system or service that uses an interview style or interrogative approach. They use your responses to direct your prep process through which of the many forms and categories benefit you most. Try out different scenarios before you actually file, like Nurse Wilson and her spouse did.
5. Why can’t doing taxes be fun? Or at least be less painful?
View your income tax management like a process rather than an event: Plan, make adjustments along the way, file, then tweak your plan again. Infinitely Recalculating Scenarios…sounds a little like your entire life!
Visit the online resource taxreturnsfornurses.com for comprehensive information and insight about the tax world of nurses. The site offers career-specific tax tips, a blog and ready access to expert advice year-round. You can file securely online right from the site. Many returns are free, and all of them are free to start!
More on ScrubsMag.com:• In Nurse Salaries: 4 Simple Tips for Nurses to Reduce Your Tax Burden This Year
• In Nurse Salaries: Essential Tax Advice for Travel Nurses
• In Career: Travel Nurse Tax Tips