Tax Guide for Nurses
Disclaimer: This guide is for informational purposes only and is not tax, legal, or financial advice. Consult a qualified tax professional for advice specific to your situation. Tax laws change frequently, and your individual circumstances may differ from the general information presented here.
Taxes aren't glamorous, but understanding what you can and can't deduct is one of the easiest ways to keep more of your paycheck. Whether you're a staff nurse, travel nurse, or nursing student, here's what you need to know.
The big change: W-2 nurses lost most deductions
Here's the frustrating reality. The 2017 Tax Cuts and Jobs Act eliminated the ability for W-2 employees to deduct unreimbursed work expenses on their federal taxes. That means if you're a staff nurse on a W-2, you can no longer deduct scrubs, shoes, CEUs, or licensing fees on your federal return -- even though these are legitimate work expenses.
This isn't forever -- the provision is set to expire after 2025, and Congress may or may not extend it. But for now, most staff nurses are limited in what they can claim federally.
The state exception: Several states still allow unreimbursed employee expense deductions on state returns, including California, New York, New Jersey, Pennsylvania, Minnesota, and Arkansas. If you work in one of these states, you may be able to deduct work expenses on your state taxes even if you can't on your federal return. Check with a tax professional in your state.
Common nurse deductions (when they apply)
These deductions apply to self-employed nurses, 1099 contractors, and travel nurses who qualify. They may also apply to W-2 nurses on state returns in certain states.
Uniforms and scrubs
Scrubs, lab coats, and nursing shoes that are required for work and not suitable for everyday wear are generally deductible. Keep your receipts -- both for the purchase and for laundering costs if you wash them separately from regular clothes.
Continuing education (CEUs)
Courses, conferences, webinars, and certifications required to maintain your nursing license or improve skills in your current role are deductible. This includes registration fees, travel to conferences, and required textbooks. The education must maintain or improve skills for your current job -- it can't be for a new career entirely.
Licensing and certification fees
State nursing license renewal fees, national certification fees (ANCC, AACN), BLS/ACLS/PALS renewals, and specialty certification costs are all deductible when applicable.
Union dues
If you're a member of a nursing union, your dues may be deductible depending on your employment status and state.
Professional subscriptions and tools
Stethoscopes, hemostats, penlight batteries, nursing reference apps (UpToDate, Epocrates), and professional journal subscriptions can all qualify as deductible work expenses.
Mileage and transportation
If you drive between multiple work sites (not your regular commute), that mileage is deductible at the IRS standard rate of $0.67/mile for 2025. Travel nurses have additional mileage deductions for driving between their tax home and assignment locations.
Travel nurse taxes: The complicated part
Travel nursing pay is structured differently from staff nursing pay, and the tax implications catch many nurses off guard.
Tax home basics
Your tax home is the city or area where your permanent residence is located -- the place you return to between assignments. Maintaining a tax home is what makes your housing stipend and per diem payments tax-free. This is the single most important concept in travel nurse taxes.
To maintain a tax home, you generally need to: keep a permanent residence that you pay rent or mortgage on, return to that residence between assignments, and have regular income in that area or demonstrate that you intend to return.
What happens without a tax home
If you don't maintain a tax home (you gave up your apartment, you don't have a permanent address), the IRS considers you an "itinerant worker." Your housing stipend and per diems become fully taxable income, and your take-home pay drops dramatically. Many travel nurses don't realize this until they get an unexpected tax bill.
W-2 vs. 1099 travel nursing
Most travel nurse agencies classify you as a W-2 employee. This means the agency handles payroll taxes, and your pay package includes a taxable base rate plus non-taxable stipends (housing, meals, incidentals) -- assuming you maintain a tax home.
Some agencies offer 1099 positions, which give you more control over deductions but also make you responsible for self-employment tax (an additional 15.3% on top of income tax). The higher gross pay on a 1099 can be misleading once you account for self-employment taxes, health insurance costs, and the administrative burden of quarterly estimated payments.
State tax considerations
Travel nurses often work in multiple states in a single year, which means filing returns in every state where you earned income. Some states have no income tax (Texas, Florida, Nevada, Washington, Tennessee, and a few others), which is why these states are popular for travel nursing assignments and tax home locations.
If you maintain your tax home in a no-income-tax state and take assignments in taxable states, you'll still owe taxes to those work states. However, your total state tax burden will be lower because your home state won't tax you.
When to hire a CPA vs. DIY
DIY is fine if:
You're a W-2 staff nurse at one hospital, in one state, with no side income. Your taxes are relatively straightforward -- standard deduction, W-2 income, maybe student loan interest. Tax software handles this easily.
Hire a CPA if:
You're a travel nurse (multiple states, stipend calculations, tax home questions), you have 1099 income from per diem or agency work, you own rental property (including renting out your tax home between assignments), or you had a year with significant life changes (marriage, home purchase, new state).
Not just any CPA. Find one who specializes in travel nurse taxes. General CPAs often don't understand travel nurse pay structures and can cost you money by treating stipends incorrectly. Travel nurse-specific CPAs typically charge $300-500 for a return, and they'll usually save you far more than that in correctly applied deductions and properly structured income.
Tax software with nurse discounts
If you're doing your own taxes, these platforms offer discounts for healthcare workers.
TurboTax offers up to 20% off federal products for nurses and first responders through ID.me verification. TurboTax is the most popular option and handles multiple W-2s and state returns well. The interface walks you through deductions step by step, which is helpful if you're not tax-savvy.
TaxAct offers 25% off federal and state filing for military members, with periodic promotions for healthcare workers. TaxAct is a solid mid-range option -- less expensive than TurboTax, more capable than free filing options. Good for nurses with slightly more complex situations (multiple W-2s, student loan deductions).
Credit Karma Tax (now Cash App Taxes) is completely free for both federal and state returns. No nurse discount needed because there's nothing to discount. It handles W-2 income, standard deductions, and basic situations well. The tradeoff is less hand-holding and fewer features for complex situations.
Key dates to remember
- January 31: Deadline for employers to send W-2s and agencies to send 1099s
- April 15: Federal tax filing deadline (unless extended)
- Quarterly estimated payments (if self-employed): April 15, June 15, September 15, January 15
- State deadlines vary -- most match the federal deadline, but check your specific state
The bottom line
Most staff nurses on a single W-2 have simple taxes. Take the standard deduction, check if your state allows work expense deductions, and use tax software with a nurse discount. Travel nurses have more complexity and more opportunity -- a specialized CPA is almost always worth the investment. Either way, don't leave money on the table by ignoring deductions you're entitled to.