Travel nursing, tax free stipend/per Diem, and tax home

[Troypreiss]

Hey everyone

 so I recently took just one travel nursing job away from my apartment that I have lived in for 3 years and worked as a nurse at the local hospital, I went 10 hours away. The travel company I was with explained and preached about the tax free stipends I can get since I am away from my apartment and I got excited, I didn’t do a lot of research until someone brought it to my attention lately, so what happens if the IRS determines that it’s not my tax home, do I pay taxes on those tax free stipends? Also I signed another contract down here so I will be here until my lease is done in April, that’s considered abandonment correct? So what do I do? I am super stressed out and I didn’t know all of these details because my recruiter did not explain all of this to me. 

[xmasbaby0]

Are you a W-2 employee?  Or will you be treated as an independent contractor who gets a 1099Misc?  That makes a big difference in the answers to your questions.  Please clarify that for us first.

[Troypreiss]

I am a W2 employee they said 

[Troypreiss]

I am a W-2 employee is what they told me when I contacted them

[xmasbaby0]

If you are a W-2 employee then you cannot deduct any job-related expenses like mileage, etc. on your federal tax return.  The tax law that passed for 2018 eliminated job-related expenses as deductions for W-2 employees.

You had better be asking plenty of questions about anything they are calling a "tax-free" stipend.   That does not sound right.  Why would any of your compensation be tax-free?  Get it in writing ahead of time from them if something they are paying you is supposed to be "tax free."

Moving expenses are not deductible on your federal return.  Moving expenses are only deductible for certain active duty members of the military.  Your living expenses will not be deductible if you re-locate for this job.  There will not be anything deductible about breaking your lease.

Proceed with caution.  You have not mentioned what states are involved so we cannot tell you if you will be in a state that has a state income tax you will have to pay.  

[Troypreiss]

The stipends are per Diem not labeled tax free

[xmasbaby0]

I see that you have another thread going too.  And not sure what you mean --or think you mean -- by "tax abandonment?"   What exactly are you asking about?  Are you asking about breaking your lease?  The IRS does not care one way or the other if you break your lease.  Nor does the IRS care if you move from one state to another.  People move all the time.    If you live in a state that has state income tax for part of a year and then move to another state--you pay State #1 tax for the part of the year that you lived there, and you pay state tax to State #2 for the part of the year that you live in that state.  So it is possible that you would file two part-year tax returns in the same year, one for each state.

[Troypreiss]

I am sorry I must have said it wrong. So as travel nurses we get per Diem according to the GSA rate which I received in this contract. And to receive that I have read you have to have a tax home, which I have. But according to the IRS there are 3 stipulations to having a tax hike. I was just getting super confused with this. Like how do I claim per Diem pay 

[xmasbaby0]

@Critter--would you like to weigh in on this one?

[Critter]

I highly suggest you take your contract and any other paperwork you have and sit down with a local tax professional to get educated on your specific situation ... this forum is not really a good way to address this situation ... for your own piece of mind talk to someone in person.