Career Path > Tax Q&A
Permanent Positions are Never Temporary for Tax Purposes
traveltax:
--- Quote from: Rennhack on Feb 05, 2010, 11:20 ---I find the last sentence to be very interesting.
Your information is incredible. This is the first time I have had those questions answered for me in a manner that was believable. Ususally I get a "I heard this, or I heard that". This is the firs time I have been presented with facts to back up the explanation.
I might not like the answer, but I sure as heck believe it.
(Now to find a way to create a believable 4 week break in service that the IRS would buy into.)
--- End quote ---
If you are going to a new assignment location that is geographically distant from the original, then you do not need a "break in service". That starts a new clock for that area.
minerbl:
Joe,
I know this info was posted a long while ago, but I wanted to get your read on the same topic. I have been at my current contract for 20 months, which obviously made my per diem and other items taxable after the first 12 months. If I take a new contract with a different company in a geographically separate area for 2-6 months, and then if I returned on another contract to the original location, would that reset my tax home there? Is two months long enough to reset my tax home there or would I need to go for a longer period of time?
61nomad:
It's been over six years since Joe posted , so I am not sure if he is still listening. However, I have been a road tech for over 30 years and have never been audited. (we don't make enough money to bother with)
There is no hard and fast rule. I would say that 6 months is a lot safer than 2 months, but when you make the majority of your money in one location over a period of five, three, or even two years the IRS will logically think this is your tax home. Also, your per diem becomes taxable the moment that you know the job will last longer than one year (tough to prove I know). It is a good idea to get the one year duration in the offer letter.
Let's not even get into the discussion of whether someone is eligible for taxable per diem.
traveltax:
--- Quote from: minerbl on Mar 18, 2016, 12:08 ---Joe,
I know this info was posted a long while ago, but I wanted to get your read on the same topic. I have been at my current contract for 20 months, which obviously made my per diem and other items taxable after the first 12 months. If I take a new contract with a different company in a geographically separate area for 2-6 months, and then if I returned on another contract to the original location, would that reset my tax home there? Is two months long enough to reset my tax home there or would I need to go for a longer period of time?
--- End quote ---
The 12 month rule has another hurdle. Work in the same place every year and it will become your tax home (permanent job) unless there is income in another location that exceeds the income at the regularly recurring job location
I have a collection of citations on my blog
https://traveltax.wordpress.com/references-and-citations-2/
traveltax:
--- Quote from: 61nomad on Mar 18, 2016, 10:16 ---It's been over six years since Joe posted , so I am not sure if he is still listening. However, I have been a road tech for over 30 years and have never been audited. (we don't make enough money to bother with)
There is no hard and fast rule. I would say that 6 months is a lot safer than 2 months, but when you make the majority of your money in one location over a period of five, three, or even two years the IRS will logically think this is your tax home. Also, your per diem becomes taxable the moment that you know the job will last longer than one year (tough to prove I know). It is a good idea to get the one year duration in the offer letter.
Let's not even get into the discussion of whether someone is eligible for taxable per diem.
--- End quote ---
It has been 6 years ...... wow. Im still here checking in occasiaonally, but not a lot of tax questions to field :-\
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