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    Are local assignments a good idea for travelers with permanent tax homes?


    To continue to qualify for the tax-free benefits of so-called tax advantaged programs, travelers are required to go home on a regular basis, to live and practice. Still, it is important to note that working per diem through an organization other than your preferred staffing agency can result in a loss of insurance and pension benefits. What's a mobile provider to do? If you plan on traveling for more than a year, accepting local assignments through your travel company may be the perfect alternative.

    The definition of "going home"

    "Going home" does not equal practicing at a facility within your home state or visiting family for the holidays. Expressly, it means you will work at a setting in your tax home, which is the entire area within commuting distance of your permanent residence. This holds true whether the facility is actually situated in your home state or just across the state line.

    Do your homework

    Ensure your agency understands and complies with the tax requirements for local assignments. Since you will not be eligible for temporary living expenses while living at home, you will not be entitled to tax-free benefits. Thus, all compensation will be subject to tax and withholding—both federal and state.

    Also, even if you do go home to live and practice, staying away for too long and/or remaining at the same travel assignment for a year or more could cause your tax home to shift away from your permanent residence. What would occur as a result of this situation? You'd be disqualified for receipt of tax-free benefits.

    A practical option

    While it may, initially, seem unusual to sign up for a local commitment through your travel company, it is a practical option. If you maintain a tax home—as long as all of your income is taxed—it is a choice that many experienced, veteran travelers would highly recommend.

    The preceding discussion is general in nature, and should not be considered advice for any individual tax situation. You should consult with your personal tax planning professional for specific guidance relating to your unique circumstances.