Sponsored by: Aya Healthcare
Written prior to tax reform 2017. Watch for future articles.
Before you sign on the dotted line and hit the open road, one of the things you should consider is travel reimbursements.
It’s unusual to get the entire trip covered but the following guidelines will help you get the most out of your reimbursement. Most companies will offer some sort of travel reimbursement to the traveler (you). This is varied from company to company. Below is a break-down of the most common types of travel reimbursements. There may be others but these are the options that I have encountered.
Flat rate reimbursement is the most common. What this typically involves is a flat rate to and from the contract. The amount of this can range anywhere on average from $250 – $500. Most of the time you will receive the contracted on amounts on your first and last pay-checks for the contract. This amount is non-taxable reimbursement. There will be no taxes taken from the contracted amount.
Per Mile reimbursements: There are other companies that will reimburse you via a specified mileage rate. This is generally lower than the GSA mileage rate and most times, the company will cap this.
In either of the above cases, the traveler will have to foot part of the bill for travel. For example: Traveler is currently in Cincinnati, OH and taking a contract in San Diego, CA. This is approximately 2164 miles. If the company offers you $0.45/mile up to a maximum of $250 or if you have a flat rate of even $500 you are going to come out quite short. 2164 x $0.45 = $973.80. Travel companies are NOT going to pay you this large of an amount for travel.
This doesn’t even take into consideration that you will have to have several overnight stays if driving this distance which will incur not only food but also lodging in transit. These expenses although not covered will be able to be taken as a deduction on your year-end tax return. Make certain that you keep good records.
Provided (flights): This method is not utilized frequently (except contracts in Alaska/Hawaii). Basically, you or the company will purchase an airline ticket (one-way) and the company will cover the cost.
Most generally, a rental car is not included. There are some cases where the company will cover a rental car (most generally in Alaska/Hawaii). In other cases, the company may offer to pay for a monthly public transportation pass (you may have to ask for this). You will need to consider the availability of public transit in the proposed location to determine if it is feasible to utilize a flight and public transportation.
Remember, the option that was the most beneficial for this contract may not be the most beneficial for EVERY contract. Explore your options for EACH contract. This is just one piece of the pie when it comes to Contract Negotiations.
Would you like to learn more?
Check out the TOP 10 Questions for Travel Nurses on Taxes.