Taxes — it’s the five-letter word everyone dreads come April. Chances are, if you’re a working registered nurse, you’ve graduated from the 1040EZ and have a few more steps you need to take when filing your taxes. (We wish we could go back to the single-page form, too!)
While there are the obvious deductions—student loan interest, dependents, or charitable donations, for example—did you know, given your occupation, there may be additional nursing tax deductions you could be missing? You should certainly consult a tax professional to make sure you’re maximizing your tax refund per the tax code (as we are certainly not CPAs), but it’s also good to be extra prepared before you take the plunge. Start with these tax tips, then take a deep breath and get to prepping!
If you’ve been following the news lately, you probably heard that at the end of 2017, Congress passed a major tax bill that will potentially have dramatic effects on how individuals file their taxes. That won’t change your upcoming filing, though. The law went into effect on January 1 of this year, but it won’t change your last year’s taxes. However, it will likely affect what you can deduct for this year, so keep an eye on changes for next year.
With that in mind, take a peek at the tax return you filed as a nurse last year to see how you fared. If your circumstances remained similar from the last two years, you can use it as a guide to help you prep for this tax season and to reacquaint yourself with the process. Look at the kind of documents and receipts you needed, and begin preparing those for your taxes.
Nurses travel. Nurses work per diem. Nurses own businesses. Every nurse is in a unique situation depending on their specialty, or even the state they live in, so you may be eligible for more tax deductions as a working nurse than you realize. Some of these will be on your form, but because rules change, it’s a good idea to always check the IRS website for a full list of allowable nursing tax deductions.
Remember that regulations change, so check the website thoroughly before you begin preparing to ensure you have the most accurate information. While your old tax return is a helpful guide, don’t rely on everything you did last year. Having all the new information you need before you start filing will greatly reduce the stress and panic involved.
We know you’d rather spend time scrubbed in for surgery than combing through your files looking for deductions, but it’s important to check every detail to maximize your refund. You also need to make sure you’re paying the correct amount if you owe, because no one likes overpaying! Again, each nurse’s tax deduction situation will differ, but here are some things to look out for. The following is a list of unreimbursed employee expenses that you, as a nurse, may be able to write off if you choose to itemize your deductions:
For the work-related deductions, check with your employer or in your contract first. Each of these have detailed eligibility criteria, so it’s very important to visit the Tax Benefits for Education section on the IRS website to see if you qualify.
Once you know which deductions you’re eligible for, it’s important to know the difference between an itemized and a standard deduction, because you need to choose between the two. You can’t claim itemized expenses for your work uniform, for example, and also claim the standardized deduction. First, add up all the deductions you qualify for (the ones we discussed here, if you qualify, plus any others). If that number is larger than the standard deduction, go the itemized route. The standard deduction can change year to year, so please visit the IRS website for the current number.
As nurses, we encourage people to seek healthcare advice from professionals when needed. And we encourage you to do the same with your taxes if you need help or have questions. Again, as a healthcare college, we do not give tax advice, so please consult with a tax professional before implementing any of these tips.