Tax Tips for Healthcare Workers
As a healthcare worker, you’re constantly on the go. Long hours at work and a stressful job mean that taxes are likely the last thing on your mind. But knowing what deductions you can and cannot take, as well as what documents you should have in order, can make the difference between a healthy refund or none at all.
Here are a few helpful tips to make sure you max out your deductions and keep more of your money come tax time:
Just because you read up on tax law last year doesn’t mean nothing has changed. The IRS frequently updates, adds, and removes regulations, so you need to bring yourself up to date every year. Make sure you understand current deduction qualifications and credits you may be eligible to receive. Reviewing the most recent guidelines before you begin will ensure you don’t hit any snags along the way.
Gather Everything Before You Start
Before you open up your tax filing software or go see your accountant, make sure you have all of the materials that you need (including W2s, receipts, 1099s, etc.). It will save you a lot of time and headaches if you have everything ready before you get started (and it will ensure that nothing gets forgotten, helping to avoid any costly errors).
You’ve done your homework and you have all your papers ready to go, but are you really clear on what you can and cannot deduct? Here’s a quick cheat sheet, just in case:
Initial education: To be a healthcare professional requires a lot of education, whether you’re a nurse or an x-ray technician. The good news is, you can probably write a lot of that off. With the American Opportunity Credit (AOC), you can receive a credit of up to $2,500 a year for the first four years of your degree program. If you don’t qualify for the AOC, you may qualify for the Lifetime Learning Credit, which allows a tuition credit of 20% of tuition and fees paid to a college or trade school up to $2,000.
Continuing education: After you’ve earned your degree or certification, you will likely be required to take continuing education classes or seminars every year. Continuing Medical Education tuition, course materials, lab fees, and some travel expenses can be deducted. Note that if a course qualifies you for a new role or promotion it is not
Work-related expenses: You can typically deduct most work-related expenses that aren’t reimbursed by your employer, including:
Uniforms and shoes
Special tools like stethoscopes, penlights, or dressing scissors
Subscriptions to professional journals
Professional liability insurance
And much more
Special deductions for travel professionals: If you’re a travel healthcare worker, you have some special considerations that other healthcare professionals do not. Some things to note include:
If you worked in more than one state, you will have to file taxes in each of those states and they may all have different deadlines and regulations.
Some states allow you to receive a tax credit for taxes you paid in other states.
Several states, including New Hampshire and Florida, do not collect state income tax.
It is advisable to use a tax professional when you work in more than one state, as filing can get quite complicated.
Local assignments do NOT qualify for deductions such as meal reimbursements or tax-free housing.
Not confident in your tax-prep abilities? Contact a professional. Taxes are the one thing you don’t want to mess up on, as a mistake could end up costing you a lot of money.
Tell us – do you typically file your own taxes, or do you hire someone to do it for you?
If after doing your taxes, you need to increase your income – we have per diem shifts available! Contact us today.