Where is Your Tax Home?

SEE ALSO >>> Business Tax

One particular aspect of business travel taxability that many companies struggle with is the concept of a “tax home.” In a nutshell, the IRS allows deductions for meals and lodging on business trips because these expenses are duplicative of costs normally incurred at employees’ homes and require them to spend more money while traveling. Consequently, a taxpayer can’t claim deductions for meals and lodging unless he or she has a home for tax purposes and travels away from it overnight.

A “tax home” —

that is, an employee’s home for purposes of the business-travel deduction rules — is located at either his or her regular or principal (if more than one regular) place of business, or regular place of abode in a real and substantial sense, if he or she has no regular or principal place of business.

If an employee has two or more work locations, his or her “main” place of work will be considered the tax home. In determining which location is the main place of work, the IRS looks at factors such as total time spent at, degree of business activity in, and amount of income derived from, each business location.

There may be situations, however, in which an employee has no permanent residence. For example, an itinerant salesperson who moves from place to place is only “home” wherever he or she stays at each location. Because the taxpayer doesn’t have duplicative expenses, there’s likely no deduction for meals and lodging.

Apply Now

Need Additional Information?

If you need more information, please contact us so we can connect you with one of our CPA advisors who will be committed to your business and personal success. BLS is here to help!