If you’re a nurse working per diem as an independent contractor and you need to file your taxes, you’ve come to the right place.
You’re in good company. Tax time is the most nationally-dreaded time of the year. And, for first-time independent contractor nurses, filing taxes can be a little stressful and very intimidating.
In this article, we’ve done the research and brought you a side-by-side comparison of the biggest names in tax preparation.
We’re comparing for you the top three platforms: TaxAct, H&R Block, and TurboTax. Price breakdowns, feature comparisons, and reviews were all taken into consideration when selecting our winners for easiest, cheapest, premier, and expense tracking-tax filing bundle platforms for independent contractor nurses.
Tax Guide for Beginners
If this is your first time filing taxes as an independent contractor (aka self-employed), we recommend you check out this article by the kind people at Intuit: Beginner’s Tax Guide for the Self-Employed. Here you’ll find the definitions to key terms, like sole proprietor (Schedule C), partnership, an S-corporation, C-corporation, plus how to get a tax ID number and whether it makes sense for you.
For a detailed, but easy-to-understand breakdown of how expenses are categorized and reported on the official tax forms, check out Reporting Self-Employment Business Income and Deductions.
Tax Deductions for Nurses
The opportunities here abound. Most nurses are wholly unaware of the many day-to-day expenses that are tax-deductible for self-employed nurses. For example, you can write-off liability insurance, professional services like tax preparation, and even your personal health insurance.
We’ll share with you here the most common write-offs for contractor nurses, but for a complete list of deductions especially for nurses, check out Intuit’s industry-specific tax deductions (select Nursing from the drop-down).
For most individuals, putting aside money for retirement is the best way to plan for the future and save on taxes. For independent contractors, it’s doubly so. Self-employed filers can put away even more money toward their retirement than standard employees. Learn more.
Continuing education is tax-deductible. So if you were trying to maximize those free CEU sessions, you don’t have to. You can attend the CEU sessions you want and add them to your deductible expenses. You can even attend nursing workshops and conferences and write off the costs.
License, Certifications, and Memberships
Are your nursing license fees and certification fees (like BLS, ACLS, PALS, etc.) tax-deductible? Yes, absolutely. You can even deduct membership fees to professional organizations like the ANA.
Communication and Transportation
Less known to some nurses, you can deduct the cost of your cell phone and internet services, as well as transportation costs (car insurance, mileage, gas, parking fees, etc).
The possible deductions here are broad, from disposable everyday items to long-lasting medical devices. The ones that nurses most commonly list are cleaning supplies (disinfectant, hand sanitizer, paper towels, etc.), educational materials and reference guides, protective gear (PPE, scrubs, etc.), small medical tools (blood pressure monitor, stethoscope, etc.), and occasionally equipment rental. Some of these items may feel petty to document, but they can add up in your deductions.
No doubt the best way to make tax time quick, easy, and get the largest deduction possible is to track your expenses year-round.
There are many personal finance tools (some free) out there that can help you categorize your expenses for your deductions, and track them quickly and easily, like Expensify (Android, iOS) or Freshbooks (Android, iOS). You can also download a separate mileage tracker, like MileIQ (Android, iOS).
Quickbooks is worth mentioning, not because of their automatic mileage tracker, but because it’s an Intuit product and is fully integrated with TurboTax. Your expenses are already categorized correctly and easily imported into TurboTax for year-end tax returns as well as quarterly estimates.
If you’ve done your due diligence all year-long tracking your expenses and keeping them categorized, tax time can be a breeze.
What is Form 1099-NEC?
Form 1099-NEC replaces the old 1099-MISC. So, if you had been self-employed in the past, and you’re wondering why you didn’t get a 1099-MISC this year, now you know: it’s no longer in use and you’re all set with the new 1099-NEC.
Am I eligible for Coronavirus Relief?
The Tax Prep Comparison for Nurses
When it comes to filing taxes, we don’t want to make any mistakes. We want our taxes to be done right and get the most deductions we can.
So, for this comparison, we only considered platforms that offer assistance in the case of an audit and a money-back guarantee if another company can get you a higher deduction. All these companies stand by their product and guarantee you’re getting the maximum deduction and your taxes are filed correctly.
As an added bonus, all these companies provide online filing, which means not only can you track your refund, you also get your refund as quickly as possible, deposited straight in your account, if you choose.
What are people saying about the different software options? We did the research, ran the numbers, and read the reviews. Here are the winners.
Easiest TurboTax (by Intuit)
TurboTax is by far the leader in easy-to-use tax filing platforms. With easy questions in plain English and an interface that’s simple and clear, you don’t need to zoom in to read any fine print. This platform is a breath of fresh air and a site for sore eyes.
TurboTax also guides you through your deductions, with industry-specific expenses, including a list of deductions just for nurses.
Of all the big names in tax preparation, TaxAct is the most affordable. If you didn’t work much this year or your budget is tight, TaxAct might be the best option for you.
Let a Professional Do My Taxes H&R Block
Both H&R and Intuit offer full-service tax professionals to do your taxes for you. H&R goes above and beyond to match you with a tax professional who will meet your needs the way you want it: in-person, on the phone, or online.
Best Expense Tracking-Tax Filing Bundle Quickbooks-Turbotax Bundle
Of all the options we’ve looked at, this is our favorite for busy independent nurses. You get an automatic mileage tracker, easy tracking of all expenses, quarterly estimates, and year-end tax preparation and filing, all with the basic package. For an extra $5 per month, Intuit offers on-demand online assistance with chat and screen sharing.
How do the tax software compare?
Here’s our breakdown of the top three companies and what they offer for independent contractors (or self-employed) nurses.
Both Intuit and H&R Block offer on-demand online assistance with a tax-preparer, as a premium service. Although the service is more costly, if you’re uneasy about your taxes, you might want to pay a little extra for this service. Both company’s online assistance goes beyond basic chat. You’ll undoubtedly find that it’s nice to have someone with whom you can share your screen and walk you through everything at any time.
|TurboTax||TurboTax Live||H&R Block|
Old Tax Returns
|Tax Expert||On-Demand + Final Review|
|Cost per State|
Federal & State
We hope this breakdown was helpful and that you’ll be getting your taxes on time and easily.
We just brushed the surface of some of the deductions you can make as a nurse who works as an independent contractor. To see a more detailed list of deductions, see this invaluable resource and select Nursing from the drop-down list.