 Deducting travel expenses
|
 Dear
Tax Talk,
I have been on indefinite relocation from California to Florida since April 2005. My monthly per diem from my company is being taxed, and I want to know what, if any, of my expenses or taxes paid on the per diem is deductible from my 2006 tax bill.
-- Laurence
 Dear
Laurence,
What you think is relocation is actually considered a permanent
move by Internal Revenue Service standards. Generally, a temporary
assignment in another location is one that is realistically expected
to last (and does, in fact, last) for one year or less. You can
deduct various travel-related expenses (such as meals and lodging)
when you are temporarily away from your tax home. However, 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.
If your assignment is indefinite, you must include in your income
any amounts you receive from your employer for living expenses,
even if they are called travel allowances and you account to your
employer for them. An exception to the one-year rule exists for
federal employees investigating or prosecuting a crime. One bright
side is that since you relocated, you may be able to get out of
paying California income taxes (there are no individual income taxes
in Florida). You should check with a professional tax adviser.
To ask a question on Tax Talk, go to the "Ask
the Experts" page, and select "taxes" as the topic.
|
