W-2s and beyond: The healthcare traveler's guide to tax-related paperwork

With tax season in full swing, if you haven't already done so, you will soon be preparing your return. Of course—whether you're tackling the task yourself or using the services of a tax professional—you'll need your Wage and Tax Statement, the document more commonly referred to as a W-2. But, since you are a traveler, you'll need to gather up additional paperwork that's equally important. Read on to learn about some of the other, not-so-obvious documents and information you may need to understand your taxes and file your return.

Hang onto your contracts

Lodging/housing, meal allowance, and transportation allowance are reimbursement categories commonly found in contracts. Now and again, you may see licensure re-imbursement, uniform allowance, and other miscellaneous categories listed, as well. By law, your company is required to specify the purpose and amount of each. Simply calling a combination of two or more categories an allowance, stipend, or per diem without an itemization is not appropriate because each category has its own reporting rules.

First, it is important to note there are only two types of reimbursements that can be paid on a per diem basis—meals/incidentals and lodging. These are standard allowances set by the U.S. General Services Administration (GSA), broken down by location. They are what the government often provides to its own employees for lodging and meals while they're on assignment on the road. As long as an employer has a reasonable belief that its employee will be working away from home, it can give that person any amount up to the maximum per diem as a reimbursement or forward payment, without the burden of exchanging receipts. (Amounts may be found in IRS Publication 1542, Per Diem Rates, or at the GSA website, http://www.gsa.gov/.)

Meals and incidentals. Meal per diems must be recorded separately as they are only 50% deductible to the company and combining a meal allowance into a non-specified category could be viewed as an attempt to work around the limited deduction. You can use the per diem tables as the basis for your meal deduction if your staffing agency does not provide an allowance. However, if your company offers a meal allowance, you cannot deduct it, unless there is proof of a greater expenditure. Furthermore, you may not use the per diem tables to claim the difference between the company allowance and the published per diem.

Lodging/housing. Lodging may also be paid on a per diem basis or, as is common in the healthcare travel industry, the housing is provided by the company. Similar to the meal per diem, if your staffing firm pays less than the published rate, you cannot claim the difference unless you have proof of the expense.

An incorrect use of the lodging per diem would be the practice of a company providing you with housing and paying a lodging per diem reduced by the agency's housing expense. A company that provides lodging or structures a lodging arrangement with another party procures a receipt. Because per diems function in a receiptless environment as a standard allowance, they cannot be used when there is a known cost. In these situations, any supplemental housing allowances are taxable income, and you would be required to report them, specifically on Line 7 of Form 2106, Employee Business Expenses, where all reimbursements for employment expenses are recorded.

Transportation allowances. Travel pay, car allowances, or transportation allowances have no established per diem tables, so they are reimbursed on a receipt or reporting basis. The standard mileage allowance of 48.5 cents per mile (50.5 cents per mile next year, for 2008 returns) can be used to measure your deduction, but when filing your tax return, you must include any employer reimbursements on Line 7 of Form 2106. Usually, agencies provide travel allowances that are much lower than a traveler's expense, and there is a net deduction. Even though most transportation allowances are not reported on the W-2, they still should be reported on your return. Your contract or pay stubs will identify the amounts.

Save your pay stubs

Your pay stub should be a reflection of the terms of your contract. When you receive the first check for an assignment, compare the items to the stipulations outlined in your contract. Also, make sure tax is being withheld for the state in which you're working, unless there is a reciprocity rule that would alter this condition. A few agencies incorrectly report state wages to their travelers' home states, the state where the agency is located, or no state at all! If you see that any of these scenarios applies to your first check, call your company's payroll department and have them correct it immediately.

Keep the final pay stub of each assignment in your files. It specifies the entire amount of compensation and tax withholding for the contract. Plus, in the event there is a discrepancy, pay stubs can serve as proof of the withholdings.