With the start of the new year comes the start of — you guessed it — tax season. As a travel nurse, you’re entitled to several tax benefits, but you’ll need to save receipts when preparing your returns so you can include itemized deductions. Here’s what you need to know about saving receipts and a list of the ones you need to hang onto.
Keep only what you need
“Many travelers save everything, including receipts for gas and food, creating a mountain that is insurmountable — and they give up come tax time,” Daina says. “My hope is that they only save what is needed, and that pile should actually fit in one envelope for the entire year.”
Hang onto itemized receipts for auditing purposes
Travelers can use credit card statements for preparing tax returns because they’ll be able to see which companies they purchased items from (such as scrubs or medical supplies) and break it down that way. However, Daina cautions, the IRS usually requires an actual itemized receipt, which is why you need to keep everything.
Save receipts for at least six years
“The IRS has up to three years to audit a return, and usually they notify taxpayers about two years into that time period,” Daina says. “If the IRS suspects major issues with unreported income — and travelers do have a lot of income tied up in unreported reimbursements — they can then open the audit up to six years. Therefore, anything used to obtain the numbers put on the tax return needs to be kept six years, and you can stretch it to seven for a one-year overlap.”
Note: If you don’t want to save a paper trail for years, photos or PDFs of your receipts are also acceptable. Be sure to save these copies on a hard drive or cloud so they aren’t lost if your computer or phone stop working.
Use a receipt checklist
Here is a list of receipts the Travel Tax team recommends saving each year:
- Job physicals
- Fingerprints and verifications
- Professional memberships
- Professional insurance
- Uniforms and work clothing
- Work boots and safety footwear
- Safety and protective equipment
- Industry-related books, journals and magazines
- Union dues
- Job-related supplies and equipment
- Job-related legal fees
- Security clearance
- Computer costs
- Hotel stays
- Plane and train fares
- Parking fees
- Car rentals (and a mileage log)
- Gas receipts (only for a rented vehicle)
- Public transit fares
- Postage, fax and mailing costs
- Laundry costs
- ATM fees
- Contract housing expenses
- Impairment-related work expenses (for handicapped)
- Cell phone bills (up to three months with minute usage)
- Pager costs (at least one bill indicating monthly costs)
- Internet (at least one bill indicating monthly costs)
- CEU expenses
While you don’t need to save every receipt from your travel assignments, keeping the ones Daina of TravelTax.com recommends will ensure you’re prepared when April 15 rolls around again.
Check out our post Four Things Travel Nurses Should Know About Filing Taxes for more suggestions as you start working on your returns, and make sure you understand all the tax benefits you’re entitled to as a travel nurse.