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About John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com.

Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Hidden Tax implications for the Traveling Physical Therapist

Tax Law (Questions About Taxes) - Hidden Tax implications for the Traveling Physical Therapist

Expert: John Stancil, CPA - 11/1/2009

Question
Dear John,

I have been a practicing Physical Therapist for 9 years working for a local hospital. I am considering a change to a traveling PT position. I am assured from the prospective Traveling Employer, that my hourly rate is tax exempt. This would equate to ~$70k per year. So, will my W-2 show $70k income and then will I be responsible to pay my own income tax at the end of each year? I understand the one-year-per-assignment rule for tax exempt housing, food, and travel expenses stipend. Is there any other hidden tax implications this prospective employer may not be revealing?

Thank you in advance for your advice for offering free advice,
Richard Logan, MPT

Answer
Richard,

Thanks for your question.

Several issues raise their ugly head here. First, I don't know how your prospective employer worded what he told you, but the income is not tax exempt. It may be that he is treating you as an independent contractor, meaning he will not withhold any taxes and give yo a 1099 at the end of the year. In this case, you would owe income tax plus self employment taxes (at 15.3% of your profit).

The one-year rule applies, as you have stated to an assignment lasting less than one year. However, if you are constantly traveling and have no regular place of business you may be considered an itinerant. In this situation, you are not considered to have a tax home and can deduct no travel, meal, or housing expenses.

This may not be your situation, but from your description, you may fit into this category.

Hope this helps.

John Stancil, CPA

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