Tax Home Setup Checklist for the New Year

Happy New Year, travelers! If there's one resolution every travel therapist should make for 2025, it's this: get your tax home locked down before your first contract starts. A properly maintained tax home is the foundation of every tax-free stipend you'll collect this year — and the IRS has been paying closer attention to travel healthcare workers lately.

Whether you're a seasoned road warrior or heading out on your first assignment, this checklist will make sure you're covered. Let's walk through it step by step.

What Exactly Is a Tax Home?

Your tax home isn't necessarily where your family lives or where you grew up. According to IRS guidelines, your tax home is your regular place of business — the metro area where you earn the majority of your income. For travel therapists who don't work in any single location long enough to establish one, you need a permanent residence you maintain and return to between assignments.

Without a valid tax home, every dollar of your housing stipend, meals per diem, and travel reimbursement becomes taxable income. For most travelers, that's $20,000–$30,000 per year that could be reclassified. That's not a risk worth taking.

The 2025 Tax Home Checklist

1. Secure a Permanent Address You Actually Use

This means a house, apartment, or room you maintain year-round — not a P.O. box, not your parents' couch (unless you're paying fair-market rent). The IRS wants to see that you have a genuine residence you return to regularly. Fair-market rent is key: if your parents' spare room would rent for $600/month in your area, you should be paying close to that and documenting it.

2. Document Your Duplicate Expenses

The entire premise of tax-free stipends is that you're duplicating living expenses — paying for housing at your assignment AND maintaining a residence back home. Keep records of rent or mortgage payments, utility bills in your name, renter's or homeowner's insurance, and any maintenance costs. A folder in Google Drive labeled "Tax Home 2025" takes five minutes to set up and could save you thousands.

3. Maintain Ties to Your Tax Home Area

Beyond the physical residence, the IRS looks at whether you have genuine connections to the area. This includes voter registration, vehicle registration, your driver's license address, a local bank account, memberships at a local gym or club, and involvement in community organizations. The more ties you can demonstrate, the stronger your position in an audit.

4. Return Home Between Assignments

This is where many travelers slip up. You can't maintain a tax home you never visit. Make it a point to return home during breaks between contracts — even if it's just for a long weekend. Keep receipts from gas stations, restaurants, and stores near your tax home to prove you were physically present.

5. Don't Work in One Area for Too Long

If you stay in a single metro area for more than 12 months, the IRS may determine that area has become your new tax home. This is the "one-year rule," and it resets your eligibility for tax-free stipends. Plan your contracts strategically to avoid back-to-back assignments in the same city. Check out our Tax Home Checker tool to see if your situation qualifies.

6. Keep a Travel Log

A simple spreadsheet tracking your assignment locations, dates, and the dates you returned home is gold during an audit. Include the facility name, city, state, contract start and end dates, and notes about trips home. This doesn't need to be fancy — consistency matters more than format.

7. Work With a Travel-Savvy CPA

Not all accountants understand the nuances of travel healthcare tax situations. Find a CPA who specializes in — or at least has significant experience with — travel nurses and therapists. They'll help you structure everything correctly from day one rather than scrambling at tax time. We'll cover more on finding the right CPA and filing correctly in our April tax season issue.

Common Mistakes to Avoid in 2025

Every year, we see travelers make the same costly errors. Using a family member's address without paying rent is the most common — it's technically fraud if you're claiming duplicated expenses that don't exist. Another frequent mistake is letting your home lease lapse while on assignment, then scrambling to set something up before tax time. The IRS looks at the full year, not just April.

Some travelers also assume that owning property automatically creates a tax home. It doesn't — you still need to demonstrate regular use and return trips. A vacant investment property in another state won't cut it.

New for 2025: Updated Per Diem Rates

The GSA updated per diem rates for fiscal year 2025, and many popular travel therapy destinations saw increases. Higher per diem rates mean higher potential tax-free stipends, which makes maintaining your tax home even more valuable. Use our Pay Calculator to model what your take-home could look like with the new rates.

Your Action Plan This Week

Don't let this sit on your to-do list. Block out one hour this week to set up your tax home documentation folder, verify your permanent address is current on all registrations, confirm your rent or mortgage payments are documented, and schedule a call with a travel-savvy CPA if you don't already have one.

Your future self — the one who isn't stressed during tax season — will thank you.

Coming next month: The 5 Highest-Paying States for Travel PTs Right Now — we break down bill rates, cost of living, and real take-home pay by state.