Claiming the Right Per Diem Nurse Tax Deductions
It’s officially tax season, which means you may be filing your taxes as a 1099 contractor for the first time. We want to make this tax season as hassle-free as possible by helping you claim the right per diem nurse tax deductions on your 1099 form.
Not only does being a 1099 healthcare professional create more job independence and flexibility, but it also allows for you to claim certain deductions that W-2 employees cannot.
Here, we’ll help you discover how to get the most out of your deductions as a 1099 nurse or clinician.
What Is a Tax Deduction?
A tax deduction will lower your taxable income, which means you will owe fewer taxes. The lower your taxable income is, the lower your tax bill will be, which is why claiming the right deductions is extremely important.
What Per Diem Nurse Tax Deductions Should You Take?
Receiving a tax refund can make tax season worth the headache. The most effective way to ease the angst of giving away your hard-earned money is to understand the deductions that help whittle away your tax bill. For NurseDash users, deducting the following expenses from your income can help put more money into your pocket this tax season.
Uniform
As a 1099 clinician, you can write off expenses for scrubs, lab coats, and shoes. Make sure you take advantage of this deduction by keeping track of these expenses throughout the year.
Phone and Internet
Your phone and internet service may also be considered eligible deductions. It’s important that you claim only the portion you are using for work. To do this, you’ll need to estimate the percentage of time you use your phone and internet for work. If you happen to have a phone line entirely designated for work, you can deduct 100% of the bill.
For NurseDash clinicians, you can include the time you are on the platform viewing and responding to shift assignments. You can also include any time you are corresponding with others related to your assignments.
Travel
You can expect to work at a variety of healthcare facilities, which means you may put more miles on your car. The federal income tax code permits 1099 contractors to deduct travel expenses from their income tax forms. Keeping a meticulous record of the miles you travel to and from the facilities you’re working in will make it easy to write off this expense when filing.
Parking and toll fees are also considered an eligible deduction. If you are paying either of these during your work commute, keep your receipts handy for when it’s time to file.
Medical Tests
You may have paid out of pocket for medical tests related to your job, such as a physical exam or flu shot. If this is the case, these can be deducted as a professional expense.
Licenses
As a clinician, it’s your responsibility to keep your license up to date by paying any renewal fees necessary. If you paid a fee to renew your license this year, you can deduct that expense from your 1099 form.
Education
Healthcare professionals often pay for continuing education units (CEUs) out of pocket. This expense is an eligible education deduction and claiming it as a deduction is an effective way to get back some of this money.
If you are currently in your first four years of college, you may also be able to claim the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit.
The American Opportunity Tax Credit is available to those who are in their first four years of post-secondary school. You can potentially claim a $2,500 credit per year. There are some stipulations to claiming this credit like being enrolled “at least half time for at least one academic period beginning in the tax year”.
The Lifetime Learning Credit (LLC) can help eligible students enrolled in undergraduate, graduate, and professional programs. Unlike the AOTC, there is no limit on the number of years you can claim this credit. If you’re currently working with NurseDash and continuing your education there is a good chance you will be eligible to claim this credit, worth up to $2,000 per tax year.
Retirement Plan Contributions
As an independent contractor, you may have the option of contributing to a retirement plan such as SEP-IRA’s, SIMPLE IRA’s, and solo 401(k)’s. These contributions will lower your tax bills and help cushion your retirement years.
Because the tax-deductible portion of your contribution depends on the plan you have, it’s important to speak with your financial advisor before claiming any amount as an eligible deduction.
Tax Tips for 1099 NurseDash Users
Maximizing the amount of money that you save by taking advantage of tax deductions is an important part of a NurseDash user’s financial management plan. Here are a couple of tips to help you maximize your 1099 per diem nurse tax deductions.
Save Every Document
Clinicians working as 1099 contractors play by different tax rules than those followed by W-2 nursing employees. As an independent contractor, you must save every receipt to show the IRS you spent the money you claim to have spent.
Make sure to save receipts for the following expenses:
- Licenses
- Education
- Phone and Internet costs
- Uniforms
- Travel expenses
Keeping track of your receipts and expenses will make it much easier to claim your deductions at tax time. You may choose to keep your receipts together in a file, or use an expense tracking software like Wave, which hosts a free plan perfect for tracking expenses.
Report Income Accurately
Although an IRS audit spends a considerable amount of time examining claimed deductions for a 1099 nurse, the tax agency also wants to ensure clinicians report all the income received throughout a calendar year. Not only do you have to report the wages earned while working at a medical facility, but you also have to account for any income from writing and consulting to present an accurate total income figure.
Still Have Questions About Filing Your 1099?
By using the NurseDash platform, you can work as often or as little as you want. As an independent contractor, it’s important to put the income you generate to good use by claiming the right tax deductions on your 1099 form.
If you’re still struggling with the idea of filing your taxes, consider speaking to your CPA or tax preparer. You can also visit the IRS website for an explanation of expenses you may be able to write off this year.
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