There has been a lot of curiosity and concern over the new tax law among travel healthcare workers. Since it is now passed and signed, it is very important to understand the changes.
Please understand that I am not a tax professional.
Below, I have gathered a few of the major points from Travel Tax to help outline the changes.
Over the coming weeks, I will continue to add to this as we all get more information. Please continue to follow.
This new tax law will be in effect immediately for your 2018 withholding. Your 2017 tax returns, which you will file this January-April, will not be affected.
Effect on stipends and reimbursements:
Travel companies can still give you tax-free allowances/reimbursements for food and housing. They can also still reimburse you for many things including travel expenses, licenses, CEUs, etc. This is GREAT news!
So, what actually changes?
Under the previous law, if your travel company paid you $35 per day for the food stipend and the GSA technically allowed $75 per day in that area, you were able to deduct the remaining amount. From now on, you cannot.
In addition, according to Travel Tax, travelers can no longer deduct expenses such as uniforms, shoes, license expenses, phone cost, computers, union dues, equipment, conference expenses, etc. However, if you are an independent contractor, you can still continue to deduct those expenses.
Lastly, you can no longer take advantage of the standard mileage deduction. Under the old law, if your travel company reimbursed $400 for travel expenses to your assignment and it ended up costing $800 to get there, you could deduct the remaining amount. Unfortunately, that ability is no more.
Currently, I do not have any speculation or facts as to how this will affect the way travel companies will do their reimbursements/stipends. As I get more information, I will pass it along!
Though there are some cuts on deductions, it is still important to realize that travel therapy is still an opportunity of a lifetime. One can still have the opportunity to visit places they could only imagine. Tax free reimbursements are still given to travelers. Pay is still generally more than full time permanent positions.
Ultimately, you have to evaluate if traveling is right for you!
Does this new law affect your decision to travel? Comment below!