You may already know you can deduct your away-from-home overnight travel expenses. However, what tax rules do you need to know if you want to travel, or need to travel, to an out-of-town business location for an extended period?
First, your travel to and expenses of living in this out-of-town location are deductible only if this is a temporary work location, which the IRS defines as a location where you expect to spend less than one year.
Second, you have to travel away from your tax home. Your tax home is not your personal home. Your tax home is the location of your principal place of business.
You can run into these rules when you create a second business location in a second state.
For example, a business owner who has an operation in Wisconsin creates a second business location in Florida. One of the two locations is going to be the principal place of business. Traveling to and living in the second location is going to create tax deductions for travel.
If you meet the requirements listed above, you can deduct all of your out-of-town travel expenses to the extent they were not reimbursed by your employer.
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Stay tuned for more tax tips from Corvino and Verwys.
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