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2024 Travel Nurse Tax Tips

Hey there, fellow Travel RN!

Taxes—no one loves ’em, but everyone has to deal with ’em. But don’t worry, we’re here to guide you through the maze of tax deductions and savings your tax accountant should be working on for you.

At Insogna CPA, we get the unique challenges travel nurses like you face. You’re not just a nurse; you’re running a business as a 1099 contractor, and that requires more than just number crunching. Our Austin, TX-based tax preparation team is here to help you maximize your tax savings while keeping things straightforward.

💡 Tax Prep

Let’s dive into the world of tax preparation specifically tailored for travel nurses. Picture this: you’re hopping from one assignment to another, providing top-notch care to patients. Along the way, you’re racking up expenses like lodging, meals, and transportation. The good news? Many of these expenses can be deducted from your taxes, meaning more money back in your pocket.

But there’s more! As a travel nurse, you’re constantly investing in your professional development. Whether it’s renewing licenses, attending conferences, or taking courses to boost your skills, these costs can also be deducted. That’s right—your commitment to lifelong learning not only benefits your career but your wallet, too.

And let’s not forget those snazzy uniforms—scrubs, lab coats, and any specialized attire required for your assignments. The costs to keep up your professional appearance? Yep, they can be claimed as deductions.

❓Business Tax?

Now, I know what you’re thinking—business taxes can be overwhelming. But don’t stress! That’s where our tax accountant team comes in. We specialize in tax services for travel nurses, helping you navigate the complex tax laws and ensuring you’re taking advantage of every deduction available. We handle the paperwork so you can focus on what you do best—providing exceptional care.

Choosing Insogna CPA means choosing peace of mind. We’re not just your tax accountant; we’re your financial success partners. With our tax preparation expertise, you can rest easy knowing your business taxes are in good hands.

Now that you’re a successful travel nurse making bank as a 1099 contractor, let’s make tax preparation rewarding by keeping more of your hard-earned money where it belongs—in your pocket.

Ready to keep more of your hard-earned cash?

Let’s chat about how our tax preparation services can make 2024 and 2025 your most financially rewarding year yet. Reach out to us today!

5 Common Mistakes Your Bookkeeper Can Make (and How to Fix Them)

As your small business probably knows, anyone can perform basic bookkeeping tasks. Categorizing synced transactions from the bank isn’t rocket science. But it’s not just about finding someone who can handle these responsibilities—it’s about finding an experienced bookkeeper who gets it right, on time, and works cohesively with your CPA. If your bookkeeper made these accounting mistakes last year, it might be time to rethink your business’s accounting strategy.

🚩 Didn’t Collaborate with Your CPA

Having a bookkeeper and a separate tax person can prove to be an issue, as they are not incentivized to communicate with one another. Consider hiring a licensed Certified Public Accounting Firm that specializes in helping small businesses bridge the gap between transactional work and providing ongoing tax strategy planning.

You will miss opportunities to legally save money on your taxes if your financial efforts are not ongoing and cohesive. If your bookkeeper doesn’t do their job correctly on a daily basis, your CPA will have to clean up messes later on in order to correctly prepare your business’s taxes. Bringing in an integrated CPA team will ensure a seamless financial experience throughout the year as the same group of licensed CPAs sees your business through from the beginning of the fiscal year through to the end.

🚩 Missed Opportunities to Legally Save on Taxes

Your business could take a significant hit thanks to a financial disconnect between your CPA and bookkeeper. Is your bookkeeper only equipped to take care of your straightforward and transactional daily financial tasks? Don’t skimp in this area; what you might save by hiring an inexperienced bookkeeper that makes accounting mistakes you will likely spend when paying taxes and then some.

Enlisting the expertise of an integrated CPA team guarantees that you are getting high-quality service from a group of CPAs that work together to benefit your organization.

🚩 Didn’t Provide Year-Round Advisory and Planning

To truly thrive, your company needs year-round, customized financial expertise from an industry professional that has been trained to help business owners like you. Trusting an unqualified bookkeeper that works in total separation from your CPA will not do the trick.

A strategy that was established at the beginning of the year might need to be altered if your bookkeeper reports that day-to-day conditions have changed since the strategy was put into place. A communicative, collaborative relationship between these two is crucial for your organization’s success.

🚩 Risked an Audit with Mis-Reporting

You will be a likely auditing target if your bookkeeper continually makes mistakes—even small ones. Rounding to the nearest whole number, simple math errors, incorrectly categorizing expenses, neglecting to track reimbursable expenses, and more can catch the attention of the IRS and put your business in a vulnerable position.

If errors of this nature don’t trigger an audit for your company, your CPA will either have to allocate extra time and effort to rectify these mistakes later on or your business will simply miss out on opportunities to save money.

🚩 Didn’t Get to Know Your Business

Your bookkeeper should have an in-depth familiarity with your business, its problem areas, its long-term goals, etc. in order to help you save money. Ask yourself the following questions:

❓ Can my bookkeeper help identify problem areas?
❓ Opportunities to increase profits?
❓ Do they understand my goals to grow my business?
❓ Do they help me figure out ways to cut costs?

If the answer is no, and your bookkeeper makes accounting mistakes, consider how upgrading to an integrated CPA team might improve the financial aspects of your business.

💡 What Can Be Done?

As mentioned earlier, there are straightforward solutions to these costly mistakes. At Insogna CPA, we specialize in bridging the gap between transactional bookkeeping and ongoing tax strategy planning, so your business doesn’t suffer from poor financial management:

✅ Small business bookkeeping that helps your company save as much as legally possible on taxes.
✅ Identifying problem areas, maximizing profits, and advising on how to cut costs—looking beyond just the numbers to see the full picture.
✅ Preventing unnecessary audits by maintaining accurate records and avoiding common reporting mistakes.

Is your small business’s bookkeeping more of a headache than a help?

Let’s chat about how we can help you take control of your financial future. Reach out today—we’re here to make sure your books aren’t just balanced, but that your business is too.

Can You Pay Taxes with a Credit Card?

With tax season behind us, the next big worry is paying off those remaining tax bills. If you’re considering your options, paying your taxes with a credit card might have crossed your mind. It’s an alternative to IRS payment plans and could even offer some tempting rewards if your card has the right perks.

But before you swipe, it’s important to weigh the pros and cons. Depending on your tax bill and your credit card’s terms, this decision could either save you some stress or cost you more in the long run.

💵 Processing Fees

Since the IRS can’t accept credit card payments directly, they work with three approved payment processors. Currently, the processor with the lowest fee is pay1040.com, charging 1.87% of your balance, with a minimum fee of $2.59. So, if you owe $2,000 in taxes, you’ll be charged a total of $2,037.40.

Remember, these fees get steeper the larger your outstanding balance, and you’ll need to pay them on top of any interest. If you go with an IRS payment plan and pay by direct debit or check, you’ll only owe the IRS interest rate and any applicable penalties, with no processing fees.

📌 Interest Rates and Balance Transfers

Interest rates vary by credit card, but the average is about 15.07%. According to the IRS, the rate for overpayments and underpayments is currently 6% per year, compounded daily.

If you plan to pay your balance off over time, you’ll likely pay more interest with a credit card, even if it’s simpler to calculate than the IRS interest rates, which change frequently. However, if you open a new credit card with a balance transfer offer and have good credit, you could get several months to a year to pay off your balance at a 0% interest rate, which can save you money and buy you some time. But if you miss payments or your credit isn’t great, this might not be an option for you.

💡 Credit Card Rewards

Credit card rewards, like cash rebates and frequent flyer miles, often make the extra fees and interest tempting when paying your taxes by credit card. Why not earn a free vacation while paying your taxes?

However, financial experts estimate that most credit card rewards only net you about 1% back on what you purchase. It’s worth sitting down and doing the math on how much you could save by sticking with the IRS interest rates and avoiding processing fees—you might be able to fund that vacation out of pocket instead. Unless you plan to pay off your entire balance immediately and the rewards are worth the fees, using a credit card for your taxes might not be the best financial move.

📃Tax Bills and Your Credit Report

If you need extra time to pay your taxes, an IRS installment or short-term payment agreement is usually a better option, as these don’t appear on your credit report. However, carrying a balance will appear once you shift the responsibility from the IRS to your credit card company.

In addition to affecting your available credit, it also impacts your credit utilization score based on how much of your available credit is being used.

If you’re looking for housing, more credit, or other situations that involve a credit check, you’ll want to avoid paying your taxes with a credit card.

✅ Weigh the Risks and Benefits of Paying Your Taxes by Credit Card

Ultimately, the decision to use a credit card to pay your taxes is a personal one. If you’re planning to take a longer-term approach, an IRS installment agreement is likely to cost you less both upfront and in the long run.

Need Help?

Not sure which payment option suits your situation best? Let’s connect and figure out the smartest way to handle your tax bill—without sacrificing your financial goals.

What Is The Penalty For Not Filing Taxes? Penalties and More in 2024

We’ve all heard the saying about death and taxes, but it’s surprising how many people still skip filing their tax returns. If you’re one of them, thinking you can fly under the radar, it’s time to rethink that strategy. Even if you can’t pay your taxes right now, filing a return is non-negotiable. Skipping this step can set off a chain reaction of unpleasant consequences that you definitely want to avoid.

Despite what you may have heard about the IRS being too busy to notice, the reality is quite different. The IRS has a job to do, and not filing your tax return could come back to haunt you in more ways than one. Let’s break down the key tax filing rules and what happens if you ignore them.

💡 Most People Are Required to File Tax Returns

If your income is less than the standard deduction and you don’t owe self-employment taxes, ACA penalties, or qualify for certain credits, you might think you don’t have to file a tax return. But with health and family assistance tied to tax returns, the number of people not required to file is shrinking. So, nearly all individuals, estates, and trusts need to file a return, and they may have to pay taxes. These are two different things, and there are penalties involved with ignoring either one. Even if you don’t have the money to pay the tax you owe, you’re better off filing a return rather than skipping the process. Here’s why:

The IRS imposes a fee for not paying your taxes and a separate fee for not filing. The larger penalty is for not filing—it’s 4.5% per month, compared to just 0.5% for not paying, and that fee gets charged every single month. You could end up paying up to 22.5% for failing to file and 25% for not paying (plus interest on unpaid taxes, which accrues from the return’s due date until you pay). The bottom line is that whether you can pay or not, you’ll save yourself big fees by submitting the required paperwork.

In addition to incurring fees, consider the actions the IRS takes when they don’t receive a tax return from you. The process involves preparing a substitute return, which will be completed without consideration of tax advantages, deductions, or write-offs. This leads to a higher amount owed than if you had prepared and filed your return yourself.

The IRS is limited by a rule known as the “statute of limitations,” which gives them just three years from the date you file to perform an audit. The three-year clock starts when you file a return, so the sooner you get the paperwork in, the sooner your risk of being audited expires. That statute also applies to any refund you might have coming—after three years from the date of filing, you forfeit any refund. Beyond the audit, if the IRS lets ten years from your filing date go by without pursuing the taxes you owe, they lose their ability to collect those taxes, penalties, or interest. The same is true for your ability to include your tax debt, interest, or penalty debt in a Chapter 7 Bankruptcy discharge, which is based on the date of your tax filing (generally two to four years after you file your tax return).

❓ What If You Can’t Pay Your Taxes?

What happens if you file your return without submitting the money you owe?

Once the IRS processes a return that isn’t accompanied by payment, or discovers a taxpayer’s failure to file and pay taxes, they issue a Notice of Tax Due and Demand for Payment detailing how much you owe in taxes, interest, and penalties. You can submit payment via cash, money order, credit card, check, or electronic funds transfer, and the sooner you pay, the better, as penalties and interest will continue to accumulate. If you don’t have the funds available, it’s better to contact the IRS and discuss your problem with them than to ignore the notification. Options for resolving your payment issue include:

✅ Allowing a temporary delay: This is generally offered after a review of your situation, during which time the agency may file a Notice of Federal Tax Lien. This document allows the government to place a claim on what you owe until you can pay.
✅ Setting up an installment agreement: This allows you to make smaller monthly payments based on what you can afford.
✅ Settling through an Offer in Compromise: This is an agreement that’s possible only after all other options have been exhausted, allowing you to pay a lower amount than what’s owed. It’s issued after a complete review of your financial situation and addresses penalties and interest along with the original tax amount. Reaching an Offer in Compromise requires filing an application that costs $150.

It’s important to remember that if you receive a tax bill you think is incorrect, ignoring it is just as big a mistake as not filing a return. Instead, take positive action by contacting your local IRS office and bringing all pertinent documentation to prove your case.

Need Help?

Beyond the financial penalties, failing to file a tax return when you owe money can lead to more severe consequences, including potential criminal charges and a whole lot of stress. Stay on top of the tax filing rules, communicate with the IRS, and save yourself a world of trouble—and money.

Don’t let tax deadlines and penalties get the best of you. Reach out to our team today to help you file back taxes and stay up to date with current tax filing rules and deadlines in 2024. Let’s tackle this together and keep you in the IRS’s good graces!

Egg Donation & Taxes: What Egg Donors Need to Know in 2024

Egg donation is a generous act that can help families achieve their dreams of parenthood. However, if you’re considering becoming an egg donor, it’s important to understand the financial implications—especially when it comes to taxes.

Whether you’re new to the process or already familiar, this guide will walk you through what you need to know about the taxation of egg donor compensation in 2024.

❓ Can you deduct egg donor fees on taxes?

Yes, according to the Internal Revenue Code Section 213(a), the cost of donor eggs is deductible as medical expenses. The Code states, “Section 213(a) allows a deduction for uncompensated expenses for medical care of an individual, his spouse or a dependent to the extent the expenses exceed 7.5 percent of adjusted gross income.”

❓ How much can an egg donor deduct from taxes?

According to the Pacific Fertility Center, “The fee paid to egg donors for completing a donor cycle is $10,000. If you have any questions regarding the fee paid to egg donors, please do not hesitate to contact us. There are many reasons for a woman to choose to become an egg donor. For many egg donors, the fee paid is not the main reason for egg donation. Rather, the satisfaction of participating in the miracle of life is the greatest compensation paid to egg donors.”

❓ Is the compensation received taxable?

Yes. Compensation for egg donation is considered taxable income by the Internal Revenue Service and the egg donor agency is obligated to report this income to the IRS. You will receive a Form 1099 at the beginning of the year after your egg donation so you can report your earnings and pay the appropriate taxes.

Depending on your tax bracket, that is how much you will get taxed on your income from this donation. For example, if you got paid $10,000 and were taxed at the self-employment rate of 30.3%, you only make $6,970.00.

Planning on egg donation in 2024?

Whether you’re a first-time egg donor or a seasoned pro, navigating the tax implications can be tricky. Understanding how much you’ll owe and when can make a significant difference in your financial planning. If you have questions about your specific situation, don’t hesitate to reach out to us—we’re here to help.

Give us a call today—we’ll help you make sure that your generosity doesn’t come with any unwelcome surprises at tax time.

What if I can’t pay my taxes?

It’s a common problem: You want to file your taxes on time, but you already know you’ll owe more than you can afford right now. So, you’re tempted to delay filing, thinking the IRS won’t come knocking until they have that latest tax return in hand.

Spoiler alert: You should still file your taxes, even if your wallet’s feeling a little light.

Am I Required to File a Tax Return?

📌 The Gross Income Filing Requirement
You may want to file a tax return, but you are not actually required to. Generally, the gross income filing requirement is based on the standard deduction plus personal exemption for your filing status. The IRS has a tool to determine if you are required to file a tax return based on your income alone. Notably, taxpayers who are married and filing separately have a gross income filing requirement.

Other situations in which you must file a tax return Regardless of the total reported income on your tax return, there are other situations in which you must file a tax return.

📌 Self-employment
If you owe self-employment tax on net self-employment income of $400 or more, you are obligated to file a tax return. It’s easy to go past this amount if you drive for Lyft or Uber, are giving freelance work a try, or have any other form of self-employment income that nets out to $400 or more after your deductible expenses.

📌 Affordable Care Act
You also must file a tax return if you receive Affordable Care Act subsidies for your health insurance and if you have any recapture payments such as the First-Time Homebuyer Credit. Any early distributions taken against an IRA or 401(k) also require you to file a tax return even if you had no other income, and the same is true if you reach age 70 1/2 during the tax year and were required to make the required minimum distributions (RMDs) from your retirement plan, but did not actually start these payments yet.

📌 To get a tax refund
Even if you are not mandated to file a tax return, you may still want to file one to get a tax refund. If you aren’t due a tax refund, it’s still a good idea to have a tax return on file with the IRS. Tax returns are commonly requested when applying for a lease or mortgage, or to show proof of income and demonstrate the ability (or inability) to pay for higher education and other important aspects of life that may arise.

📌 Filing a Tax Return vs. Paying Your Actual Tax Bill
A common misconception is that you need to pay all taxes due when you file your tax return. While it’s prudent to do so, you are not actually required to. Filing your actual tax return is still the very first thing you should do no matter how much you owe, even if you’re filing it late. Doing so will prevent steep penalties from being incurred if you were required to file a tax return. Additionally, suppose you put off filing your tax return for too long. In that case, the IRS can file a substitute return that won’t apply for any tax benefits and will make their assessment against you larger than it actually should be.

📌 Even if you can’t afford to pay you should still file
Even if you can’t afford to put anything toward your tax bill right now, the very least you should do is file your tax return before the deadline every year. If you want to file your taxes despite being unable to pay your bill right now, you can still do so.

📌 Receiving an Automated Tax Bill From the IRS
If you cannot pay your taxes, you should still file a tax return without including payment. You can also include a partial payment of any size, even if it’s a small amount like $20. The IRS will not issue a judgment that quickly after you file your return, and even a small payment can help you save some money on interest.

The IRS will send an automated bill by mail if you do not pay your entire tax bill upon filing your return. You can pay your balance before the bill arrives if you have the money to do so, but getting the bill in the mail doesn’t mean you are facing a lien against your bank account.

Interest will accrue on the unpaid balance as long as it goes unpaid, but owing money is a separate concept from filing your tax return on time, so you can and should file even if you can’t pay.

Need Help?

If your tax bill is giving you sleepless nights, let’s work together to find a solution. Whether it’s setting up an IRS payment plan or exploring IRS installment options, we’re here to help you navigate 2024 with confidence. Reach out today—peace of mind is just a conversation away.