Just what are travel expenses? According to the IRS in publication 463 it is
defined as, “the ordinary and necessary expenses of travelling away from home for
your business, profession, or job. An
ordinary expense is one that is common and accepted in your field of trade, business, or
profession. A necessary expense is one that
is helpful and appropriate for your business. An
expense does not have to be required to be considered necessary.”
First you need to establish a tax home. This is generally the place where you permanent
house is, if you have a permanent house, or your permanent address, if you use a
mail-forwarding system. Keep in mind also
that if you do not have a regular place of doing business or a conventional home, then you
are considered a transient and your tax home is wherever you work. This has a drawback also in the fact that you
cannot declare travel costs as a deduction for the reason that you are never considered to
be travelling away from home.
You are travelling away from home is your duties require you to
be away from the general area of your tax home for longer than an ordinary day’s work
(like three months) or that you are required to sleep or rest to full the requirements of
your job.
You can also deduct the expense of meals if it is necessary for
you to stop for substantial sleep, or that the meal is business related. These meals cannot be lavish or extravagant. A standard meal allowance is provided to you
based on where your business away from your home is conducted. You are then paid back at 50% of the total cost of
meals.
The standard meal allowance in the year of 2002 was anywhere
from $30 to $40 per day in most metropolitan area of the United States. The standard meal allowance for your locality can
be found at http://www.gsa.gov/
Transportation expenses can be taken on expenses related to
getting from your home to a temporary workplace when you have one or more regular places
of work. If you have one or more regular
work locations away from you home and you commute to a temporary work location in the same
profession, you can deduct the expenses of the daily round-trip transportation between
your home and the temporary location, regardless of distance.
Remember also, that a temporary work assignment is considered
an assignment that is expected to last less than one year, the employment is temporary
unless there are facts that would indicate otherwise. As
a travel nurse, all assignments are considered temporary, unless you decide to stay at the
location that you “travelled” to.
You may also take out a mileage expense. The standard mileage rate for 2002 is 36.5 cents a
mile. This rate is adjusted every one or two
years to concur with the greater cost of living factor.
Taken in account with the standard mileage rate is not only the amount that you
spend on gas, but the upkeep and “wear and tear” on your vehicle.
As a travel nurse, you will soon be responsible for keeping track
of all your expenditures related to your travel. Lack
of organization throughout the year, in this business, is considered a medical emergency! You MUST keep track of things. You MUST plan atleast one day every week or two
weeks to write everything down in a journal or enter it into a computer program such as
QuickenTM or MoneyTM. You
can also do things the “old fashion” way and log everything into a journal.
The program that I use allows me to keep track of everything
taxable and non-taxable. It helps me keep
track of all the money I have going in and coming out.
I even have a table set up on a spreadsheet program that helps me keep track of my
mileage, since I am travelling every two weeks to and from my assignment and my residence. In fact, the new version of Quicken 2004, report
to also being able to keep track of your mileage!
Along with keeping track of receipts for everything is also
very important. The best way to do this is to
purchase one of those plastic hanging file folder storage systems. In fact, I have four of these that I travel with. One with my online business papers, one with my
travel nursing papers, one with personal business papers, and one for all my craft and
sewing patterns. Organization is the key to
successful travel nursing!
Hopefully this article will help you answer some of your
questions concerning travel taxes. I would
also strongly suggest that you go to the IRS’ website and download the latest copy of
Publication 463. This is your “Travel
Tax Bible” and could save you thousands of dollars every year. |
