Year-End Tax Tips for Travel Nurses
By Linda Beattie, contributor
As the year comes to a close and we look forward to holiday celebrations with friends and family, the last thing on our mind is income taxes. After all, April 15 is a long time away, right?
While this is true, there are some simple steps you can take now - as you close out the tax year - that will not only make tax preparation easier, but can save you some money, as well.
Here are six tips to help you end the tax year well:
1. Decide on who or how you will do your taxes. This is a great time to find a tax professional who understands your employment situation and has experience with multi-state returns. Even if you don’t use an accountant every year, an occasional meeting with an experienced tax preparer can save you money in the long run. Feel free to ask how you can maximize year-end deductions and what he or she will need when it comes time to file your taxes. If you are a dedicated do-it-yourselfer, this is also a good time to pick up your 2014 tax software or forms. The IRS and your state tax agencies also have forms and several publications available online or in print that can highlight this year’s tax changes and answer questions.
2. Contribute to retirement funds. Consider paying a lump sum toward a tax-deferred plan such as your staffing agency’s 401K or an IRA. Although the IRS will allow you to make these contributions up until the date you file, making a contribution now will ensure you don’t forget. Even a few hundred dollars can lower your taxable income and save you money.
3. Purchase or pay for work-related items now. Out-of-pocket expenses for work-related items that are not covered by your employer, such as work clothing, shoes, uniforms, education, job training, license fees, etc., can be used as a tax deduction. If you know that you will need something in the next few weeks, purchase it before December 31 and enjoy the savings come tax day.
4. Make charitable donations. If you have clothes you haven’t worn in a year, items you haven’t used for awhile, or some things you simply don’t want to take on your next assignment, consider donating them to an organization like Goodwill, the Salvation Army or a local charity before month’s end. This can help you get in the spirit of the holidays and lower your taxable income. Cash donations to churches and other nonprofit groups are also deductible. Be sure to get receipts, keep records of items or cash that were donated and find a reliable pricing guide to assess the value of any donated items.
5. Pay it forward. It you’re looking for a tax break now instead of later, consider paying some tax-deductible items in advance such as real estate taxes, the January payment on your mortgage, nursing school loans or even your child’s college expenses for the coming year.
6. Organize your receipts and paperwork. Although tedious, this task is the key to completing your taxes accurately and making sure you get all of the deductions you have coming. Along with keeping records for your permanent tax home and other non-reimbursed expenses, Joseph Smith, owner of TravelTax, LLC, a firm specializing in the mobile professional, reminds travelers to keep accurate records of their travel-related expenses. These include such things as a mileage log (you can use the standard IRS mileage allowance), gas receipts if you rent a car, copies of your employment contracts which spell out what you will be reimbursed for, receipts for expenses like hotels, and a log to record expenses under $25 for things like laundry while you are away from home. He also recommends separating your paperwork by assignment to facilitate filing your state tax returns.
Please note that many of these tips are based on the assumption that you itemize your deductions. This information is not intended to take the place of professional tax advice.
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