I am by no means an accountant, but based off of experience I wanted to list some benefits of being a locum tenens nurse practitioner for tax purposes.
As I have recommended before, it is usually best to mix up your locum tenens assignments by working with some W2 agencies and some 1099 agencies. The reason is because you can have some of your income deducted for federal taxes, while also having a job that considers you to be self-employed.
In my case, since I am single, do not have children, and make more than the ‘deductions cut off income ‘for W2 employees – I am unable to deduct many expenses as a W2 employee.
On the other side, by being a sole proprietor (1099)/self-employed, I am able to deduct many expenses related to my job.
This tax season I was able to deduct the following items from my income:
- Meals: as a traveler you are able to deduct $250/week on meals since you are away from home.
- Travel: Travel not reimbursed by agency. For instance if you were given mileage to drive to another state, you can still deduct hotel costs that were paid while making the expedition. Or if you needed to fly back home during an assignment you can deduct the cost of your flight etc.
I also include costs of luggage fees, shipping/storage costs, rental car fees (if not reimbursed) etc.
- Mileage: If you have to drive in between different clinics or are not compensated for mileage commuting from home to a new assignment.
- Car costs: If you decide to use your own car for the assignment you can deduct car payments, gas, tolls, car insurance, maintenance costs, and tag fees.
- Licenses: Sometimes you may obtain a license on your own and the agency does not technically “reimburse” you – they may give you a stipend or bonus instead. In this case you can deduct the cost of the state license or DEA certificate.
- Home: If you own your house at your state home you can deduct a percentage of the house used for your office.
Some other miscellaneous items you can deduct:
- Uniforms and laundry
- Office supplies and books
- Technology (including computer and phone if used for work – can be deducted if you ever chart at home or take after hours call)
- Health insurance
- Malpractice insurance
- Conferences and continuing education
- Professional Membership organizations
- Business credit card fees
- IRA/401k contributions
- Student loan interest fees
- House and child deductions
Deductions as a locum tenens nurse practitioner quickly accumulate. In the end it brought down my total gross income so my overall tax bracket is lowered and I am able to qualify for deductions I normally wouldn’t be able to.
Doing taxes can be time consuming when you have income from various states and a collection of deductions to claim, but it pays off to be meticulous. Just be sure to keep a record of receipts and expenses!