Many taxpayers are in for a big surprise when they file their returns this year. At the end of 2017, Congress passed one of the most dramatic reforms of the tax code since the 1980s. Which took effect in the 2018 tax year. Many travel nurses have not kept up with the changes or assume the changes will start in 2019. Learn more.
Here is a link to the webinar we did with Nomadicare discussing tax reform and the changes ahead for travelers in all industries
See attached newsletter
As I mentioned before, the US tax cuts are going to create a wave of similar cuts around the globe. Here is one of the first in Nova Scotia.
We have loaded a review of the proposed tax reform Bill and its effect on Travelers. There is a short version and a more detailed version found on our website: Click here to go to the report Tax Reform Report
The tax reform bill (linked below) was released this week and it is really a zinger. An effort to simplify taxes for the average person is truly evident but it comes at a cost for many families and creates a number of incentives for cheating the system.
The bill eliminates nearly every foundational tax principal and expectation that our nation has operated under for decades. Gone are medical deductions (grandma’s nursing home / assisted living costs), state / local income tax deductions (a double tax event), student loan interest (school is bad for you), employment expenses (stick it to the unions and those working two jobs), casualty losses (the hurricanes, floods, earthquakes and tornadoes are your fault existing and your human privilege), adoption credits (leave the kids in other countries in a rotting orphanage while we place every barrier possible to adopt one domestically), personal exemptions (God forbid you have more kids – lets be like China and only have one!). After the carnage there is only one narrow education credit (did I say that school is bad for you?), a much deflated mortgage interest benefit (lets all be renters and not give a hoot when we tear the place up), a limited real estate tax deduction (let’s really tear the place up) and a severely shrunk charitable deduction (giving to the United Way or your church is heresy!).
Yes there is a bigger standard deduction but that is more of a dose of short acting Versed to mask the destruction. When you wake up, you will feel the pain……
My largest concern is the elimination of the employee business expense. Most of my clients live by this as their staffing agencies don’t pay for all their expenses for licenses, education, travel and meals etc.. That 2000 mile drive to work that 13 week assignment at a critically low staffed hospital under the proposed law is NOT deductible and good luck prying the reimbursement out of your agency. Seasonal assignments in the southern states to care for the snowbirds are going to suffer – now you cannot deducted the housing costs. This will also encourage some less than desirable agencies to REALLY drop the taxable rate – once a traveler realizes that their professional memberships, licenses, uniforms and seminars are NOT deductible, they will begin to demand reimbursements. Then we can really have a Social Security funding problem once more people get tax free monies to cover all these employment expenses.
Working as a contractor is now more appealing since its the ONLY way to write off business expenses. Talk about the workers classification issues to follow.
I have one solution- make employee business expenses an above the line deduction with the same 2% of AGI (or some sort of MAGI calculation) threshold that they have always had. Or even a 25% of AGI threshold is fine. That way there is no disparate treatment of employees vs contractors for the same expenses.
I realize that this is just the first salvo and the bill may meet the same fate that the Obamacare repeal did OR look like something completely different when finally passed. For now, I’m a bit bewildered at a Republican Congress that is scraping the system for the sake of scrapping the system. We may wipe the table clean, but the next administration will begin putting plates back on the table because the table is so empty and inviting!