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Employee Income Tax Deductions for Travel

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  • 09-13-2012, 10:16 PM
    SOCA
    Employee Income Tax Deductions for Travel
    I'm a CA homeowner. I'm considering a F/T employment opportunity with a major retailer over 100 miles from my home. Too far to commute. Therefore, taking this job would require that I live there 4 or 5 days per week and come home on my days off. The cost of doing this will take a big chunk out of my paycheck ( room rent, food, transportation, etc. ). Do the current Federal and / or CA state income tax laws provide any means by which I can deduct any of these work-related expenses ? Thanks much for any input.
  • 09-13-2012, 10:18 PM
    Disagreeable
    Re: Employee Income Tax Deductions
    Federal tax law does not.
  • 09-14-2012, 03:43 AM
    flyingron
    Re: Employee Income Tax Deductions
    I'm sorry, but I don't think so. You can only deduct travel expense when away from your tax home, which is where you are employed NOT where you are residing.
  • 09-14-2012, 08:26 PM
    mmoynes
    Re: Employee Income Tax Deductions
    Commuting expenses are not deductible. Would you be moving closer to the new job at some point?
  • 09-17-2012, 10:31 AM
    CPAlaw08
    Re: Employee Income Tax Deductions
    Hey, so there are three possibilities here:
    1. You can move permanently and claim your moving expense as a for AGI (above the line) adjustment. As long as you are more than 50 miles away and live there for more than half the year, you're good in the eyes of the IRS.
    2. You are not allowed to claim commuting costs from home to your first workplace as a deduction. However, you are allowed to claim commuting costs for a temporary work location. If you realistically expect the location to last for one year or less, you can possibly deduct commuting expenses between your home and the temporary work location. This could potentially be applied to your situation.
    3. By living away from home for a substantial part of the week in the name of business, you could argue that you are eligible to deduct expenses while away from home on business. In this case you could deduct travel expenses, lodging expenses, and 50% of the cost of meals, if they were business related.

    - The first position I know you could take without a problem. The second and third you would probably need to look into a bit more. I'm just writing this off of the top of my head, so in CA or in tax courts there might be specific legislation or rulings that provide for or against these positions. But that would be a good starting point for you.

    It's best to discuss these issues with your tax planner. S/he can describe the potential benefits and cons of taking such positions, as well as explain more fully the potential fines or penalties associated with an unsupported action, and how to guard against them.
  • 09-17-2012, 11:02 AM
    flyingron
    Re: Employee Income Tax Deductions
    Quote:

    Quoting CPAlaw08
    View Post
    1. You can move permanently and claim your moving expense as a for AGI (above the line) adjustment. As long as you are more than 50 miles away and live there for more than half the year, you're good in the eyes of the IRS.

    This is the ONLY legal advice you've given.
    Quote:

    2. You are not allowed to claim commuting costs from home to your first workplace as a deduction. However, you are allowed to claim commuting costs for a temporary work location. If you realistically expect the location to last for one year or less, you can possibly deduct commuting expenses between your home and the temporary work location. This could potentially be applied to your situation.
    Even if he only intends to work this job for less than a year, it's not deductible. It has to be have a resonable expectation that it will only last that long. If he was going to work there a as a seasonal employee (let's say now til Xmas) maybe, but otherwise no.
    Quote:

    3. By living away from home for a substantial part of the week in the name of business, you could argue that you are eligible to deduct expenses while away from home on business. In this case you could deduct travel expenses, lodging expenses, and 50% of the cost of meals, if they were business related.
    You could argue that, but you'd lose in any IRS action against you Such expenses are NOT deductible. If it were a temporary job location, yes, However again, this is not the case in the poster's proposed job.
  • 09-17-2012, 04:57 PM
    SOCA
    Re: Employee Income Tax Deductions
    Thanks to all for the input. It looks like the tax laws haven't changed in this regard. Really no tax help for people considering this type of employment opportunity. With the economy as it is plus being a homeowner plus having a family plus living in an " at will " employment state packing up and moving to the work location is so expensive and risky. I've noticed that " floater " positions in these isolated areas fill quickly as these positions usually provide a gas allowance and sometimes a lodging allowance. Not so with staff positions.
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