Writing off travel expenses
I was on temporary assignment in Houston for six months. While there,
I rented an apartment. Can I use the standard per diem tables for
both lodging and miscellaneous and incidental expenses to calculate
my business expenses on Form 2106? Or, since I rented an apartment,
can I only deduct the rent, utilities, etc.? I am a W-2 employee
and was not reimbursed for any out-of-pocket expenses.
You can deduct your travel expenses
when away from home on a temporary work assignment. Your travel expenses have
to otherwise qualify for deduction, such as be reasonable and ordinary. Generally,
a temporary assignment in a single location is one that is realistically expected
to last (and does in fact last) for one year or less.
if your assignment or job is indefinite, the location of the assignment or job
becomes your new tax home and you cannot deduct your travel expenses while there.
An assignment or job in a single location is considered indefinite if it is realistically
expected to last for more than one year, whether or not it actually lasts for
more than one year.
The per diem rate applies only to meals
and not lodging. To deduct your lodging expenses you must use your actual costs
such as your rent and utilities. Generally, you can use the "standard meal
allowance" method as an alternative to the actual cost of your meals. It
allows you to use a set amount for your daily meals and incidental expenses (M&IE),
instead of keeping records of your actual costs. The set amount varies depending
on where and when you travel.
The term "incidental expenses"
• Fees and tips given to porters,
baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on
ships, and hotel servants in foreign countries.
• Transportation between
places of lodging or business and places where meals are taken, if suitable meals
can be obtained at the temporary duty site.
• Mailing costs associated
with filing travel vouchers and payment of employer-sponsored charge card billings.
Incidental expenses do not include expenses
for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of
telegrams or telephone calls.
Most major cities and many other
localities in the United States are designated as high-cost areas, qualifying
for higher standard meal allowances. These rates are listed in Publication