Business Deductions
- Amortization
- Business Losses and Net Operating Losses
- Car and Truck Expenses
- Day-Care Services
- Depreciating Business Property
- Depreciating Your Car
- Domestic Production Activities Deduction
- Health Insurance Deduction
- Home Office Deduction
- Meal and Entertainment Expenses
- Organizational Costs and Start-up Costs
- Qualified Plan Awards
- Schedule C Expenses
- Section 197 Intangibles
- Should You Sell or Trade in Your Car?
- Start-up Costs
- Travel Expenses
More Tax Topics
- Business Structures
- Hiring Workers
- 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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Need Some Deductions for 2011?
Don't overlook these!
Updated for 2011
Travel Expenses
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Example of Tax Home
You are self-employed:
- You live in Phoenix, AZ and maintain a home office there.
- Your home office qualifies as your principal place of business because you use it regularly and exclusively to conduct administrative and management activities (e.g., bookkeeping, appointment setting, follow-up on business calls).
Your residence is your tax home.
This means your transportation costs from your home to client locations and back home are deductible; they are not considered commuting expenses, which are generally not deductible.
Example:
You are an employee:
- You live in Phoenix, AZ but don't work there.
- You have a regular (fixed) place of employment in San Diego, CA where you work Monday thru Friday.
- You return home on week-ends.
Your tax home is San Diego because it is your regular place of business.
This means your costs for traveling between Phoenix and San Diego, lodging, and meals while there, are not deductible because they are considered personal expenses.
More than One Place of Business:
Your main business location is generally where you spend most of your time and earn most of your income and is generally considered your tax home.
To determine your main business location compare the time and income associated with each business location where you work.
Example:
- You live and work in Phoenix, AZ nine months of the year.
- You work in San Diego three months of the year.
- You earn most of your income in Phoenix.
- This arrangement has been going on for several years.
Phoenix is your tax home because it is your main place of business. Consequently, when you are in San Diego you are away from home.
This means your round-trip travel costs between Phoenix and San Diego and lodging in San Diego are fully (100%) deductible.
However, your meal costs while in San Diego are only 50% deductible (including taxes and tips).
Next:
Travel Expenses: Tax Terms You Need to Know (Transient, Away From Home Test)
Related Links
- Domestic Per Diem Rates
- Who May Deduct Travel Expenses?
- Items Included in Travel Expenses
- Tax Terms You Need to Know (Tax Home Defined)
- Tax Terms You Need to Know (Tax Home Defined)
- 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 © 2008-2012 Larry Villano. All rights reserved.