Business Deductions
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- Domestic Production Activities Deduction
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- Home Office Deduction
- Meal and Entertainment Expenses
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- Qualified Plan Awards
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- Section 197 Intangibles
- Should You Sell or Trade in Your Car?
- Start-up Costs
- Travel Expenses
More Tax Topics
- Business Structures
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- Retirement
- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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Updated for 2012
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Tax Terms You Need to Know-Continued
2) Tax Home Defined:
When the IRS says you must be away from home to deduct business-related travel expenses, they are referring to your so-called tax home. This may or may not be where you maintain your permanent residence.
Your tax home is your regular (fixed) place of business, employment, or post of duty, including the entire city or general area of your regular (fixed) place of business.
For travel expense purposes the IRS says:
- You must be away from your tax home, regardless of where you maintain your family residence.
For example:
- If you run your business out of your home, then your home, including the metropolitan area within which your home is located, is your tax home.
- If you operate your business outside of your residence, say at a retail store or office building, your store or office is your tax home.
- If your regular place of business is San Diego, California and you maintain your residence in Phoenix, Arizona, San Diego is your tax home even though your permanent residence is in Phoenix.
Your residence may be your tax home if...
- you see clients/customers/patients there regularly and exclusively, or
- you maintain a home office that qualifies as your principal place of business. This is possible if you satisfy the administrative and management test:
- Under the administrative and management rule, if you use your home office regularly and exclusively to perform administrative and management activities for your business (e.g., bookkeeping, appointment setting, follow-up calls to clients/customers, preparing financial reports) your home office will qualify as your principal place of business.
Next:
Travel Expenses: Tax Terms You Need to Know (Some Examples)
Related Links
- Domestic Per Diem Rates
- What Are Travel Expenses?
- Who May Deduct Travel Expenses?
- Items Included in Travel Expenses
- Tax Terms You Need to Know
- Tax Terms You Need to Know (Transient, Away From Home Test)
- Personal Expenses
- Expenses of a Spouse, Dependent, or Other Individual
- Entertainment Expenses of Non-Employees
- Entertainment Expenses of Non-Employees-Example
- Employee Travel Expenses
- Employer Error Reporting Travel Expense Reimbursement on Form W-2
- Employee Accountable Plan
- Commuting Costs
- When You May Deduct Commuting Costs
- Temporary Work Locations and Commuting Expenses
- Temporary Work Location-Example
- What if Your Expectations for the Length of Time to Work Changes?
- Professionals Traveling to Clients' Sites
- Business Conventions and Seminars
- Investment Conventions
- Video Tapes Received at a Business Discussion
- IRS Meal Allowance
- If Employer is a Relative
- Daily Meal Allowance Amount
- Travel Expense Records You Must Keep
- Transportation Industry Workers
- Claiming the IRS Meal Allowance
- Travel By Cruise Ship
- Business-Vacation Trips Inside the U.S.
- Business-Vacation Trips Outside the U.S.
Copyright © 2008-2013 Larry Villano. All rights reserved.