By Joseph Smith @ Travel Tax

April 3, 2019

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Travel Nurse Taxes: The Case for Extensions

travel nurse tax extensionBy the time you read this, April 15 will be fast approaching. Travel nurses do not have a sedate lifestyle and the constants of travel make it hard to assemble the necessary documents to file their taxes by the deadline without rushing through the process. Fortunately, the IRS and state revenue agencies allow extensions to file returns – something most travel nurses should consider par for the course.

Travel Nurse Tax Extension

For travel nurses, a tax extension can be a life-saver. A tax extension give you an additional 6 months to file your tax return, making your new deadline October 15. It is not an extension of time to pay your tax bill. E-file or file IRS Form 4868 to obtain an extension.

What Extensions Do

Extensions delay the filing deadline of the return. For the IRS and most states, the standard extension lengthens the filing deadline to October 15. For travelers working overseas, a separate extension is allowed for longer periods if it is necessary to satisfy tests for foreign residence.

What Extensions Don’t Do

Extensions do not extend payment deadlines. If taxes are due, it is best to post payments ahead of the April 15 deadline. If balances are due and unpaid after the 15th, penalties and interest will apply which are discussed below.

Extensions do not increase the chance of an audit. With the complexity of our financial system, more taxpayers find themselves waiting for critical documents well past April 15. Better to file later and right than to rush and be wrong.

Extensions do not cost anything. The IRS charges a fee to set up payment plans for delinquent tax balances but there is no fee for filing extensions. Your tax professional may charge a fee for preparing and filing the return for your.

Penalties and Interest

If you have a refund due to you, you do not need to file an extension for the IRS. However, many taxpayers file extensions because they don’t have all of the information available to them (or the time to do the return). One can simply enter W2 data into a return without deductions to assess a worst case scenario, but deductions can cause a significant swing in the results at the state level so it is not foolproof.

Penalties and interest apply to unpaid balances. The IRS and State Tax agencies have a host of specific penalty charges but the most severe is called the “Failure to File” penalty. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline. The failure-to-file penalty is generally more than the failure-to-pay penalty. … The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. By filing an extension, the Failure to File penalty is avoided if you need additional time to file and find that you owe.

Final Benefits

Travelers who work in the ER or outpatient clinics know what it is like to have a large number of patients arrive at the same time especially toward the end of the shift. The stress levels are higher both for the provider and the patient and it is a recipe for disaster when the temptation to cut corners emerges.

By filing an extension you will have the luxury of engaging a tax professional when they are not in a hurry. You will also be able to choose the best advisor for your needs than to settle with anyone who is available. Most preparers that are available at the deadline are more focused on volume than advising clients. For the traveler, that’s worth an extension.


Would you like to learn more?

TOP 10 Questions for Travel Nurses on Taxes.


 

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