Everything Nurses Should Know Before Filing Their Taxes
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 2017 tax tips, then take a deep breath and get to prepping!
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Look at your tax return from last year
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 2017 taxes. However, it will likely affect what you can deduct for 2018, 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 in 2017 to see how you fared. If your circumstances remained similar from 2016 to 2017, 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 2017 taxes. Sometimes getting your head in the tax game is half the battle!
Check the IRS website for tax tips for nurses
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.
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Which itemized deductions am I eligible for?
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:
- Items purchased for your job. Good news! You can deduct items necessary to do your job, like scrubs, shoes, or specific equipment. According to the IRS, “work clothes and uniforms” are eligible for deduction “if required and not suitable for everyday use.” It’s important to note that you are not eligible for tax deductions on a nursing uniform or scrubs if your employer paid you back for these items. Double check with your employer to make sure, and read Publication 529: Miscellaneous Deductions and Topic No. 514: Employee Business Expenses for more!
- Licensure and union dues. Renewing your nursing licenses and your union dues is generally eligible for deduction.
Education. Claiming educational expenses on your taxes can be tricky. If you completed your RN–BSN degree last year or continued on to your MSN or received a certification, you may be eligible for a tax credit or deduction. You may fit into a few different categories:
- Educational credit
- Tuition and fees deduction
- Student loan interest deduction
- Qualified student loan
- Qualified education expenses
- Business deductions for work-related education
- Qualifying work-related education
- Education required by employer or by law
- Education to maintain or improve skills
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.
- Travel expenses. Travel nurses, take note! If you were required to travel for business-related conferences, meetings, seminars, patient care, and so on, you might be eligible for a travel tax deduction. This might include parking costs, mileage, tolls, and public transportation as well. If you drive for your job (commuting doesn’t count), it’s a good idea to keep track of your mileage. Keep a notepad in your car or use a handy app. MileIQ has some great information on what you can and can’t deduct. Check it out!
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Itemized versus a standard deduction
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. Happy filing!