Healthcare Traveler - July 2008 - (Page 57)

 Tax Facts I S S U E S A N D A N S W E R S F O R T R AV E L E R S May I deduct expenses for trips home during or between extensions of assignments? Joseph Smith ften, travelers return home during their contracts or between extensions of assignments in the same area. These trips can be expensive, and—contrary to popular belief—are not always deductible in full. The Internal Revenue Code (e.g., tax law) allows deductions for travel only when directly related to the business of a taxpayer. Trips home do not fall under this rule and are considered personal in nature. Therefore, deductions for these excursions are limited to the expenses of lodging and meals a traveler would deduct had he or she stayed at the assignment and not returned home. O The costs to consider To illustrate the point, suppose you normally spend $100 a day for lodging at your contract location, and the meal allowance in your assignment area is $50 per day. If you take a trip home that lasts 3 days, only $450 can be deducted for that trip. If lodging is provided for you, or you have a 7-day rental, then the costs incurred during your journey are only deductible up to the total meal allowance or $150 (3 x $50) since your lodging expenses do not change. Finally, if you are receiving company-provided housing and a meal allowance, the meal allowance for the days at home is added back to wages less any expenses incurred for the trip. There are other possible situations to consider, as well, but the law prevents deductions for trips home that exceed the lesser expense of staying put at the assignment location. Otherwise, deductions could be abused and tax benefits reaped for trips that are personal in nature. HT REFERENCES CCH Incorporated. (2008). Duane v. Commissioner. T.C. Memo. 1983-255. CCH Incorporated. (2008). Revenue Ruling 54-497, 1954-2 CB 75. Any tax advice contained is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Joseph Smith, RRT, EA, is an enrolled agent and owner of TravelTax LLC (TravelTax.com), based in Norfolk, Nebraska. July 2008 Healthcare Traveler 57 http://www.cirrusmedicalstaffing.com http://www.cirrusmedicalstaffing.com http://www.baycarejobs.com http://www.baycare.org/mobilepool http://www.baycarejobs.com http://TravelTax.com

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Healthcare Traveler - July 2008 Editor's Desk Contents By the Numbers Paws for Thought In a Flash Field Notes California Love Affair Taking Your Home on the Road Drug Update Clinical Tips Cityscape Advertisers' Index Name It When In... Good for You Big Deals Tax Facts Going the Distance Contest Rules Starter's Kit Allied Corner Classifieds Tales from the Road

Healthcare Traveler - July 2008

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