Travel Therapy: What is a “Tax Home”?

Picture of coins with text "Travel Therapy, What is a tax home?"

Authors: Travis Kemper, PT, DPT; Jared Casazza, PT, DPT; Whitney Eakin, PT, DPT, ATC

What is a Tax Home?

If you are just starting out in travel therapy you may not be familiar with the concept of a “tax home.”  Basically, a tax home is your primary residence, where you live and/or work. When you’re working as a travel therapist, having a tax home allows you to take housing and per diem stipends provided by travel therapy companies without having to pay taxes on them due to the stipends being a reimbursement for costs incurred at the travel assignment location.

This is a major benefit for you and greatly increases your potential total compensation, if housing costs are kept at a reasonable amount, when compared to a permanent job, where all your income is taxed. This is the main reason why “take-home” pay (otherwise known as your after-tax pay, the money that actually goes into your bank account) as a traveler is higher than pay in permanent jobs.

But, maintaining a proper tax home is a little more complicated than just saying you “have” a permanent residence.

The Basics of Maintaining a Tax Home

To be allowed to take the untaxed stipends, per IRS guidelines, you need to be able to demonstrate at least two of the following three criteria:

  1. You must maintain a place of permanent residence and pay expenses there (i.e. rent, own/mortgage, pay bills, pay taxes, etc.) while ALSO paying expenses at your travel location. This is called “duplicating expenses.”
  2. You must not abandon your tax home. Generally speaking, you should return there at least 30 days per year but these days don’t have to be consecutive.
  3. You must still conduct business in the area of your tax home. For example, you have a PRN job there or maintain some type of other business there.

The third criteria is a little vague, as some interpret “conducting business” as having bank accounts and credit cards, car registration and insurance, and voter registration associated with the tax home, not specifically working in the area.

Without meeting at least 2/3 of these requirements, you would be considered an “itinerant worker,” and all of your income will be taxed.

There is nothing wrong with having all of your income taxed, and you may still come out ahead this way as compared with a regular, permanent job. But, we like to keep as much of our money as possible, so qualifying for the tax free stipends is ideal provided that maintaining your tax home isn’t so expensive that it negates the benefit.

To find out more about tax homes and all things about travel taxes, we recommend you check out the website TravelTax.com. (Specifically, scroll down to the section “how to keep a tax home”). This is a wonderful website where we have all learned a significant amount over the years.

What Are Some Strategies to Keeping a Tax Home?

Of course if you already own a home/have a mortgage, or rent an apartment, these can be maintained as your tax home. But this method can be more costly and also more complicated since you may not have someone to look after your place while you’re away. You may be thinking you could rent out your house while you are gone, but this is not advisable unless you specifically state in the lease agreement that you would maintain at least one room in the house as your own and you stay in that room while in the area (at least 30 days per year as mentioned above).

Perhaps a better option is renting a room out from your parents or a friend, which in our opinion is great way to maintain your tax home. Go on Craigslist, see what a comparable room rents for, and pay your family/friend to rent the room in their house. It’s also recommended that you have a contract written and signed. They will have to claim it as income on their tax returns, but they can keep the extra income to help around the home. That is the simplest way, and that is what we have been doing since starting to travel. As mentioned by Joseph Smith at Travel Tax, you ideally would also want to work in this new area for a while before traveling in order to solidify this new area as your tax home.

A more unique strategy that Julia and I are considering doing next year is house hacking for our tax home. House hacking is simply performed by purchasing a multi-unit home (duplex, triplex, quadplex), and renting out the other units, while you live in one unit.  Your tenants can effectively pay your rent and pay down your mortgage at the same time, enabling you to live for free or dramatically reducing your housing costs. You can find more information on house hacking here.

Do you have a different creative way of keeping a tax home? Do you have questions about tax homes? Send us a message and we can chat!

Interview Tips for Travel Therapy Jobs

Woman holding iphone with text "Interview tips for travel therapy jobs"

Interview with the Facility

After you’ve been submitted for a job by your travel company, the next step is normally a phone interview with the facility (usually the Director of Rehab).

Interviews for travel jobs are a little different than permanent job interviews in our experience.  The interviewer typically does not ask you traditional interview questions, they just want to get a feel for who you are and make sure you would make a welcome addition to the team.  They also generally want to know a little about your past experience and qualifications.

Rarely are we asked normal interview questions, apart from “tell me about yourself.” Always be ready for that one in any interview.

What to Ask the Interviewer

Just as in a permanent job, you need to do a thorough interview of the company to make sure they are a good fit for you. Thirteen weeks is a relatively short time period, although it can feel very long if the position is wrong for you. Below is a list of questions we use in interviews that you can use too. Obviously we tailor these to the specific facility, and we always try to research the facility a little bit if possible so we can glean any information that may be readily available online.

  • What are the productivity standards?
    • How are non-billable tasks accounted for?
  • How much time do I have for an eval? Treatment?
  • What type of training/orientation is provided?
  • What is the average caseload? # evals, # treatments
    • Ramp up period? What does this look like?
  • How many hours per week? Overtime?
  • What is the schedule?
    • Weekends?  Holidays?
  • What does the team look like? # therapists, assistants, aides?
    • How many of each will I be supervising?
  • What is the general patient population? (Ortho, neuro, post op, etc.)
  • What is the average length of stay (for inpatient)?
  • What is the facility size/number of beds?
  • What EMR do you use?
    • Will I have my own computer or tablet?
    • Is documentation performed at point of service or is time allotted for documentation?
    • Will someone be able to train me on the documentation system?
  • What is the dress code?
  • What is the director/supervisor’s profession?
  • Is there any mentorship available?
  • What equipment is available at the facility for therapy?

This is hardly an exhaustive list and needs to be tailored to every interview and facility, but we keep this list with us for every interview and it serves us well for keeping our thoughts organized.

We hope this list is helpful as you prepare for your travel therapy job interview! If you have any questions for us, please feel free to send us a message!

 

Article written by Travis Kemper, PT, DPT

Edited by Whitney Eakin, PT, DPT, ATC