What constitutes as "Travel Away From Home"?

What constitutes as "Travel Away From Home"?
When it comes to business travel, expenses, and deductions,
I am frequently asked "What constitutes travel away from
home and why is it important?"

In order for certain business travel expenses to be
deductible, you must be traveling "away from home." There
are actually two parts to this question. The first is,
"Where is my tax home?" The second is, "What constitutes
being 'away' from home?"

Your tax home is a facts and circumstances question. That
is, each person's tax home will be different, not just
depending on location of the person's residence, but
depending on the person's circumstances. For most of us,
our tax home is where we live full time. But there are many
circumstances where this is not clear. For example, where
is a full-time student's tax home? Is it his permanent
address with his parents or his temporary address while at
school nine months during the year?

Or, what happens if you don't really have a permanent
residence? This was the situation in a case several years
back where a traveling salesman traveled so much that the
IRS and the court concluded that he did not even have a tax
home.

Then, we have the question of how far do we have to travel
to be "away" from our tax home? Is an hour across town
sufficient? What about going 50 miles away to a neighboring
town? There are many court cases discussing this question.
One court suggested that a taxpayer had to go beyond the
metropolitan area in which he lived in order to be "away."
Another court said that the taxpayer had to go into another
county.

Finally, how long do you have to be away in order to
qualify as "away" for tax purposes? The courts and the IRS
generally have held that if you need to stay overnight to
rest because of the work and the distance, then you are
"away." But, if you can reasonably go to and from the
location in a single day without rest, you are not away
from home.

Why is this important? If you are away from home, your
meals and lodging are deductible so long as they are
ordinary and necessary to your business. Meals are always
deductible if you have a business purpose for the meal,
specifically if you are eating with a business associate or
client. But what if you are eating alone? Then, you have to
be traveling away from home for the meal to be deductible.
Even lodging is only deductible if you are away from home.

Since everyone's situation is different, if you have a
question about whether your trip is away from home, I
suggest you contact your tax coach to get help.

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Tom Wheelwright is not only the founder and CEO of
Provision, but he is the creative force behind Provision
Wealth Strategists. In addition to his management
responsibilities, Tom likes to coach clients on wealth,
business, and tax strategies. Along with his frequent
seminars on such strategies, Tom is an adjunct professor in
the Masters of Tax program at Arizona State University. For
more information, please visit
http://www.provisionwealth.com