In an economy where every penny is highly valued, filing for an income tax refund can be high on the To Do list. So it’s time to dig out all those receipts and make a list of possible deductions.
Nurses have the potential for many different outright deductions as well as properties to depreciate, but these should be discussed with a tax advisor as they may not apply in all instances. Tax laws change almost yearly and what was once allowed may no longer be applicable so be sure to check each item.
Some of the items that should be considered include uniforms and cleaning costs. For example, some facilities require nurses to wear scrubs that they provide and they charge a periodic rental/cleaning fee. This cost may be deductible. The outright purchase of uniforms and any special shoes may be deductible as well. But if you wear those tennis shoes all the time, they may not be eligible.
Fees for continuing education courses (ceus) for license renewal, as well as any courses taken to improve your job skills or to allow you to advance your career may qualify as well. Some related expenses such as travel and meals may also qualify, but there are a lot of restrictions and you will really need professional advice on this one.
In the past, nurses could earn ceus while on a cruise and then these deductions came under strict scrutiny of the IRS. Travel excursions to foreign hospitals and clinics also got put under the microscope and the IRS clamped down, so beware if you have this kind of deduction to apply.
While it can be difficult to carve out the personal vacation experiences from the educational/business side, with careful record keeping, it can be done. Some expenses are considered too lavish and extravagant to be business deductions. Your tax advisor can help you.
Moving expenses and the costs related to looking for a new job can be considered deductions if they meet certain criteria. If your spouse took a new job in another state and you had to pay for a new nursing license and perhaps had to make a trip to the new area to interview for a job before you moved, these expenses could be deductible.
A professional library of books and trade journals may also qualify for deduction. The type of deduction may vary with the useful life of the items. Drug books for example need to be replaced every year due to updated information and so they wouldn’t be something to depreciate over time.
Equipment such as stethoscopes, PDAs, and all of the little items in your pocket like scissors and clamps can qualify for deduction, so if you purchased any in the past year, dig out those receipts. Other items such as digital cameras and cell phones may also qualify for deduction if used in the course of your business. The monthly fees for a telephone may be deductible as nurses have to take call or be available to be called in to work.
Home health nurses who use their digital camera or cell phone camera to photograph patients’ wounds and decubs could deduct a portion of the cost. You will need to be able to document how much of these items are used for business and how much for personal use. For example, if you have taken 1000 pictures with your new camera and 100 of them are business related, then the business usage would be 10%.
Travel nurses will have a variety of other deductions depending on their situations. The travel nurse agency may be able to advise you on some of the basics, but consulting a tax advisor is highly recommended. Accurate record keeping is an essential part of travel nursing right down to the tips you pay a porter to assist with your bags.
Organization is an essential tool for nurses, and keeping track of business expenses is just another aspect which needs organization. Your tax advisor may cringe when you come in carrying a shoebox full of receipts, but if that’s the best way you can keep track of these items, then at least have that. There are a number of software programs available to help keep track of expenses, mileage, and daily use of items such as cameras and cell phones for business purposes.
Don’t overlook all of the possible expenses you can deduct and set up an appointment with a tax advisor early on in tax season.
By Kathy Quan RN BSN. Kathy is the author of The Everything New Nurse Book and author/owner of TheNursingSite.com
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