“How could this happen. I owe thousands of dollars in taxes!”
By January 31 of every year, your W-2 is in the mail. And, every year we hear and read about travel nurses who are in panic mode because the taxes taken out of their wages are not enough to cover what is owed.
Some are short thousands of dollars.
They accepted contracts with low hourly pay rates so they could get a lot of “tax-free” money, but now their accountant is telling them that they will have to pay taxes on what they thought was tax-free money.
How is this possible?
Simply put, there is a limit to what a company can pay in tax-free allowances. The federal government sets guidelines for travel, meals, etc. and anything that is over those guidelines will be taxed.
That is why when Fidelity On Call calculates a contract, we are extremely careful to make sure we are doing the best we can for our nurse – hourly rate, tax-free allowance, bonus – but also taking care of them in the long run when it comes to their taxes. No one wants to owe the tax man a bundle of money!
So, we just caution you . . . if it sounds too good to be true, it probably is!
For more truth telling for travel nurses, download our free guide: 10 Top Myths of Travel Nursing.