Discussion:Traveling Nurse
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Discussion Forum Index --> Advanced Tax Questions --> Traveling Nurse
Discussion Forum Index --> Tax Questions --> Traveling Nurse
| 5 December 2007 | |
| One of my clients just showed me his payroll stub which shows an hourly wage and an amount for allowance for meals and lodging. The company informed me today that they only report the wages and bonus not the allowance which is about double the wages paid. He does not have to account for any expense while away from home. Currently he is only working 20 miles from his permanent home. Anyone have this type of situation? | |
Death&Taxes (talk|edits) said: | 5 December 2007 |
| How to make yourself popular! If there is no reporting to the employer of how the monies were spent, this expense money is not an accountable plan and thus should be part of wages. | |
| 5 December 2007 | |
| D&T is right...for a good source on away form home expenses go to Rev. Proc. 2007-63. You have to scroll the page way down to get to the document. | |
| 5 December 2007 | |
| Thank you. I also interpret the allowance as reportable even though the representative of the company says it is not and that they have been handling it as not reportable for 23 years. My client does not want to get into any trouble with the IRS (and neither do I) so how does one report and pay the SS and Medicare tax under these circumstances? | |
Death&Taxes (talk|edits) said: | 6 December 2007 |
| While there is a new form this year (Form 8919) to be filed by taxpayers when in certain circumstances they disagree with treatment of income shown on Form 1099, this employer is not giving a Form 1099. Perhaps you could report the income on Form 4137, crossing out tips and inserting wages and paying the SS there. If you do report the income, be sure to deduct on Form 2106 the travel expenses you feel are legitimate and meet the qualifications explained in Publication 463. | |
| 6 December 2007 | |
| Perhaps the meals/lodging is based on a per diem that would not require reporting? I think in the travelling nurses program they probably assume that every day employed is travel away from home and thus eligible for a per diem. | |
| 6 December 2007 | |
| When I did my first return for a "traveling nurse” I assumed that the company that hired them, with all their big time CPA's and controllers, would make sure that the tax rules were being followed. The more questions I asked, the worse this assumption appeared. These folks are being hired by these companies and told that they qualify for all sorts of tax free benefits without going through any of the appropriate questions necessary to determine if they really do qualify. In this case, the taxpayer obviously does not qualify to take a deduction for temporary living expenses while away from their tax home.
Many of the ones I have run across are at least living away from their "home" but few know they need to keep up a home "back at home" and occasionally work there. All they know is what they are told: The job will last less than one year so yada yada yada yada... Good luck working with this situation. I would probably advise you to put the non-tax free fringe benefits on line 21 and not worry about the ss tax. The company that is paying their salary is the one making the mistake. | |
| 6 December 2007 | |
| I agree that since the "expense reimbursement" is probably taxable income because he doesn't qualify as "away from home", even if the income is a per diem. However, since he is being paid a fair wage in the W2 (and the reimbursement could be non-taxable if he were farther away from home), an argument could be made that the "reimbursement" is not wages and therefore simply Other Income (not subcect to FICA). The employer doesn't care where his home is...they pay wages and living expenses for everyone. | |
| 6 December 2007 | |
| Unless I find out anything else as I research this, I probably will report it as other income and advise him to file quarterly estimated taxes so he doesn't get hit hard at the end of the year. I have e-mailed other pros including instructors from classes I attend periodically. If they have anything new to add I will post their opinions. Thanks to all who responded. | |
Death&Taxes (talk|edits) said: | 6 December 2007 |
| The chart on Page 31 of Publication 463 sums up almost all you nned to know. | |
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