YOUR lifetime learning credit or LLC is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills, i.e. Continuing Education courses that are REQUIRED for your license renewal.
Lifelong / Lifetime Learning – There is no limit on the number of years you can claim your lifetime learning credit.
Annual Credit – Your lifetime learning credit is worth up to $2,000 per tax return.
Not Just For You – The eligible student is yourself, your spouse or a dependent you listed on your tax return.
Taking Care of You Series: Financial Health Tier 1 ($50)
“I love helping my clients reduce their tax liability to the government; it is one of my passions in producing measurable results that keep clients coming back, year after year.”
Fred Martin is a partner and the Chief Financial Officer at Winningham Becker & Company, LLP, and has been with the firm since 1991. Fred earned his Master’s degree in Taxation from Golden Gate University and his Bachelor’s degree in Accounting from the University of Maryland. He remains active in the industry as a contributing member of the American Institute of Certified Public Accountants and the California Society of Public Accountants.
Carly Chohon, CPA
Carly Chohon is a Tax Manager at Winningham Becker & Company, LLP. Carly specializes in business and individual taxation. She earned both her Master’s degree in Taxation and Bachelor’s degree in Accounting from the University of Miami – School of Business.
Tax Deductions for Nurses and Health Pros YOU TOO Likely Missed
What are Tax Deductions?
Simply put, they’re money that you take away from your earned income. They should lower the amount of money that you are taxed and/or tax that you owe.
Paying taxes should be seen as a citizen’s duty. Beyond that, there goes the legal aspect. Nurses and other health should keep in mind as licensed professionals, neglect of this duty could be grounds for suspension or even a possible revocation of licenses. Note: We’ve had students in the past who lost their licenses because of this mistake.
Starting in July 2012, every licensed professional (which includes health professionals) in California is subject to losing his or her license to practice his/her profession if he/she is included in California’s list of top five hundred (500) largest tax delinquents. Any license holder included in the said list faces denial or suspension of one’s license when the licensee reapplies for renewal of professional license. The licensee is given a maximum of ninety (90) days from the issuance of a preliminary notice of suspension to either satisfy all outstanding tax obligations or choose a payment installment program. Failure to comply with one of the two given options results in denial or suspension of license until the licensing board, commission, department or any other qualified agency acquires a release coming from state tax authorities.
Most state licenses can be suspended and placed on HHS’ Office of Inspector General (OIG) sanction list for failure to pay state/federal taxes, child support, federal student loans, etc. OIG has discretion to sanction individuals and entities on a number of grounds, including (but not limited to) misdemeanor convictions related to health care fraud other than Medicare or a State health program, fraud in a program (other than a health care program) funded by any Federal, State or local government agency; misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances; suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or FINANCIAL INTEGRITY; provision of unnecessary or substandard services; submission of false or fraudulent claims to a Federal health care program…
TRAVELING to your CEU Conference?
So… you can’t wait to complete a certification course or attend a certain CEU conference. You’re excited to hang out with your healthcare tribe, learn from exciting speakers, and participate in hands-on demonstrations. But what about those travel and lodging expenses, are they tax deductible?
Yes, they are! If you are traveling to a conference or continuing education event that is purely related to your practice, you may be able to write off your expenses. Here’s what you need to know:
Your Education Matters. If attending a class or conference benefits your job or business, or contributes to your continuing education, then you can write off your travel expenses. However, deductions don’t count if you are attending for other reasons (i.e., social, financial or political). According to Internal Revenue Service (IRS) guidelines, you can’t be gone for more than a week, and at least seventy-five percent (75%) of your trip needs to be devoted to continued education or business matters.
Separate Business Expenses from Pleasure. Lots of travelers extend their education and business trips to see the sights or tour local attractions, and the IRS knows that. It’s perfectly fine to tack on a day or two, but you can’t claim your personal expenses as part of your education and business write-offs.
Track Additional Expenses. When you go to a conference or attend a week-long class, you’ll need to get some sleep at some point, which means that you can write off your hotel as well as your travel expenses. This includes meals (as long as they’re not “lavish” – caviar, etc.). You can also deduct half (50%) of all those other things that you pay for, like tips, taxis, dry-cleaning, printing or faxing. Just make sure you save your RECEIPTS. If you travel with an associate or employee and pay for their expenses, you can also write off travel costs for them, too. But you can’t write off expenses for family members.
Claiming & Getting Credit. Here’s the crucial part: you’ll need to keep detailed records of expenditures and accurately calculate deductions. If you are an employee of a company, then you can deduct your conference costs that were not reimbursed. Employee spending is considered a Miscellaneous Expense. Make sure you get help with your conference tax-deductions from a qualified accountant and visit these IRS websites:
Healthcare is a fast-paced and generally stressful industry. Consequently, health professionals have little to no time at all to research or perhaps just contemplate about the process of filing tax returns. Hence, many of us pay taxes that could have been included in tax deductions.
Before anything else, you should know that you can only claim tax deductions for the following items if you have in your possession the RECEIPTS for these items.
Education, Continuing Education, Licensing and Certification
Correspondence Course Fees
Malpractice & Liability Insurance
Computer or Laptop
Referral Service for Equipment Repairs
Parking and Toll Fees
Total Miles Covered
Public Transport (e.g. bus, taxi, subway)
Tax Preparation Fees
Other services, e.g. Uniform Alteration, Cleaning, Laundry
Yes, donations given to recognized/licensed institutions are called tax-deductible donations.
Travel Nursing: A Tax Challenge
Living as a travel nurse is an awesome adventure. However, that freedom can be put on hold during tax season. All of a sudden, you’re going to become aware of how much the IRS prefers workers who do keep things nice and tidy.
Travel nurses have a more complicated tax situation compared to regular nine-to-fivers. These are the five most common tax challenges travel nurses face. In this section, we’ll show you how to handle them.
It’s a hassle, yes. Nonetheless, keeping records is essential if you are going to get the most out of your tax return and file accurately. Make sure to do the following:
Keep a copy of your travel contracts. They are necessary to prove where you worked and for how long.
Keep a mileage log. Record your odometer reading on January 1st and again on December 31st of the same year. Make sure to record additional mileage if you drive a second vehicle, a rental, or change vehicles during the year.
Save your receipts. While the IRS will give you a stipend with an upper limit for meal costs, you may need to document other areas where you exceed your stipend.
Maintaining a Tax Home
Tax homes aren’t necessarily what you officially call “home.” They’re more like an economic home-base that allows you to make sure the way you travel for work is accurately represented to the IRS. The IRS defines a tax home as “your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.”
Establishing a tax home allows you to take deductions for travel expenses to other cities or states while keeping the un-taxed income in your contract un-taxed. Travel nurses generally qualify for tax-free stipends if they meet two of the three requirements for tax homes, which are:
You earn a minimum of 25% of your income in the geographical area.
You have a permanent residence.
You have not abandoned your tax home.
What should you do?
Maintain a regular job in the same vicinity as your tax home (a PRN or agency job works well).
Establish a permanent residence in your tax home by paying rent or a mortgage.
Avoid working 12 months out of any consecutive 24 months in a location that is not your tax home. To the IRS, that looks like you’re abandoning your tax home.
Make sure you return to your tax home at least once a year between assignments. Document your trip.
Filing in Every State Where You Worked
A perk of being a travel nurse is you get to move all over! During tax season, however, you’ll face a downside: filing a return for every state. How much you’ll pay in each state depends on a lot of factors, including how long you worked in the state. States may also have special laws pertaining to traveling workers. Take a look at these 10 Tips for People Working and Living in Different States.
Facing Down Audits
You’re more likely to be audited as a professional traveler. You may catch the eye of the system if you have a high number of deductions or your wages seem unusually low. The good news is that even if you do get audited, you can take steps to make sure it goes smoothly.
Save your receipts, contracts and all other tax documentation for seven years. (The IRS can audit you for up to six years after you’ve filed a return.)
Stay above board. Don’t cut corners, make sure you understand tax laws, and take time preparing your returns. Always work with the mindset that you could be audited.
Get help. If you’re faced with an audit, consult a professional. They can help you comply with the audit, or, if needed, file an appeal.
Keeping Up with the Regular Things
One of the greatest challenges about being a travel nurse at tax time is remembering to see the forest through the trees. Don’t forget to take a step back and remind yourself of the other tax benefits you’re eligible to receive.
Take a look at this list of 20 popular deductions, like the child tax credit, medical expenses deduction, IRA contributions deductions, and mortgage interest deduction.
Employee vs. Independent Contractor
You will need the Form 1040 (IRS) to write off your expenses as a nurse or health professional. Your expenses will be placed inside the deductions area of this form. Form W-2
Wage and Tax Statement (Form W-2) is used to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. An employer must mail out the Form W-2 to employees on or before January 31. This deadline gives these taxpayers about 3 months to prepare their returns before the April 15 income tax due date.
Form W-2 includes wage and salary information as well as federal, state, and other taxes that were withheld. This information is used by the employee when they complete their individual tax return using Form 1040. Form 1040 Schedule C
An independent contractor is accountable for all of his tax payments and travel expenses. Use the IRS Form 1040 Schedule C if you need to itemize your deductions. An itemized deduction is only needed if your expenses are more than the set standard deduction dollar amount. If your total expenses do not exceed the dollar amount set by the IRS, only use the standard deduction. Form 1099-MISC
Form 1099-MISC is a variant of Form 1099 used to report miscellaneous income. One notable use of Form 1099-MISC is to report amounts paid by a business (including nonprofits) to a non-corporate US resident independent contractor for services (in IRS terminology, such payments are non-employee compensation).
MUST DOs When Preparing and Organizing Tax Documents
Keep possession of your Forms (W-2, 1099, etc.).
Keep track of expenses, i.e. using MS Excel or a dedicated bookkeeping software.
By now, we expect you to look at receipts in a totally different way. Keep, compile and store them in one place.
Have your tax preparation checklist completed.
Have a detailed tax deduction checklist.
All data and information provided in this course is for educational purposes only. Educate Simplify makes no absolute representation to the correctness, mistakes, omissions, delays, appropriateness, or legitimacy of any data or information provided in this course.
Each course participant/student has varying circumstances and consequently, consults will be on a case-by-case basis.