Tax Advantage Program
Are you asking the right questions?
Beware of large companies who tout Tax Advantage Programs as their own exclusive incentive program, that can "enhance your lifestyle" and "assist with investments." Tax law is tax law.
Tax Advantage programs allow travel nurses to receive tax-free reimbursements to cover the transient daily costs of doing their job away from their home base. To be eligible for tax advantage, you need to maintain a permanent residence (Permanent Tax Home as defined by the IRS) and be working and living temporarily away from this permanent residence.
Every travel company has their own version of tax advantage. But wait! That’s the issue, there are different versions of an IRS-based tax-free incentive program. This is where nurses are being thrown to the wolves without even knowing it.
A true tax-advantage program should be based solely on the "meals and incidentals," (rates) for the county the nurse is currently working in. That is the only thing the IRS allows the nurse to claim as a tax-free portion of total compensation. It’s vital that every traveler understand this. It is a fixed rate, based upon a daily allotment, multiplied by seven days/week with the understanding that you are staying at that assignment during the week and incorporating those expenses for the entire week.
Travel agencies that say a portion of your hourly rate is tax-free are hugely incorrect. The amount of hours you work does not correspond to the amount of tax-free income, you are allotted. Travel nursing companies that claim a “tax-free hourly rate” are not doing this to benefit their nurses. They’re doing it at the expense of their nurses. The less they report their nurses making, the less they pay in taxes. In the eyes of the IRS, nurses are just as liable as the multi-million dollar companies for tax evasion. So who will the IRS go after? The huge travel agencies with countless lawyers? Or the sitting ducks? That is, the individual travel nurses themselves.