Taxes for Travelers

[djdroc]

Feel free to post your tax questions here. Seems this thread fizzled out last May 

I'm a nukeworker who regularly travels away from home on temp assignments running anywhere from 2 wks to 3 mos and often a min of 75 miles away. I drive to each location, paying out of pocket for meals/lodging and receiving no per diem for either. I haven't been the best with keeping up with all my receipts.  For simplicity, can I take a tax deduction for lodging and meals using the fed per diem rates?  If not both, is it true that I can deduct actual lodging exps and take a standard meal deduction using the fed per diem meal rates instead? 

[traveltax]

I'm a nukeworker who regularly travels away from home on temp assignments running anywhere from 2 wks to 3 mos and often a min of 75 miles away. I drive to each location, paying out of pocket for meals/lodging and receiving no per diem for either. I haven't been the best with keeping up with all my receipts.  For simplicity, can I take a tax deduction for lodging and meals using the fed per diem rates?  If not both, is it true that I can deduct actual lodging exps and take a standard meal deduction using the fed per diem meal rates instead? 

Actual lodging expenses and the Federal per diem for meals.
This assumes that you have a tax home vs a permanent residence as those two things are different

[whitnanc]

I am being audited for mileage.  has anyone else gone thru it?

[traveltax]

I am being audited for mileage.  has anyone else gone thru it?

You will need to provide a log that identifies the miles, destination and purpose for the trip. Frequent trips to the same location can be summarized. They will also attemt to determine your tax residence to validate the deductiblity of the mileage

[BetaAnt]

Since medical insurance is mandatory under ObamaCare, is it tax deductible as it has been declared a tax by the SCOTUS? DOE sites pay a taxed Health & Welfare stipend (required by the Service Contract Act) - a taxed benefit. If the insurance requirement exceeds the H&W stipend, is the excess deductible?

Why are state income tax refunds from the previous year considered taxable income yet federal refunds are not?

Why are unemployment benefits taxable but EBT food stamps are not? Or subsidized housing vouchers? Or welfare disbursements?

Just filling in the 1040 blanks and getting depressed. 

BA

[traveltax]

Since medical insurance is mandatory under ObamaCare, is it tax deductible as it has been declared a tax by the SCOTUS? DOE sites pay a taxed Health & Welfare stipend (required by the Service Contract Act) - a taxed benefit. If the insurance requirement exceeds the H&W stipend, is the excess deductible?

Why are state income tax refunds from the previous year considered taxable income yet federal refunds are not?

Why are unemployment benefits taxable but EBT food stamps are not? Or subsidized housing vouchers? Or welfare disbursements?

Just filling in the 1040 blanks and getting depressed. 

BA

Health insurance premiums are tax deductible in the same way they always have been only they now must exceed 10% of adjusted gross income. For self employeds, its now part of business expenses

State tax refunds are taxable when received in relation to a year in which you itemized. State withholding is a component of itemized deuductions, so a refund is a recovery of that claim on your return. If you did not itemize, you would not have to report it

Unemployment is a substitute for wages. Wages (earned income) is taxable. Welfare is a supplement

[owsi84621]

Here's a question for you that I haven't been able to get the answer for. How long must you be unemployed from the same company to not have your per diem taxed. I had a 76 day break with my current company over the new year and now they are threatening to tax my per diem saying that it doesn't matter that I was unemployed for that 76 day period. What are the rules and where do I find them?

[traveltax]

Here's a question for you that I haven't been able to get the answer for. How long must you be unemployed from the same company to not have your per diem taxed. I had a 76 day break with my current company over the new year and now they are threatening to tax my per diem saying that it doesn't matter that I was unemployed for that 76 day period. What are the rules and where do I find them?

I think the question you are asking is how long do you have to be away from a metropolitan area to restart the 12 month clock? Were you working in one area and then was laid off and now considering a job at the same place?

If not, what triggered this? Staying with the same employer should not affect this. Its the length of service in one area that should

[GLW]

Here's a question for you that I haven't been able to get the answer for. How long must you be unemployed from the same company to not have your per diem taxed. I had a 76 day break with my current company over the new year and now they are threatening to tax my per diem saying that it doesn't matter that I was unemployed for that 76 day period. What are the rules and where do I find them?

I'm not following your timeline very well.

This is August.

76 days of unemployment over the new year is quite awhile ago.

So perhaps you could nail down the details of your employment and unemployment periodicities a bit better to help the SME and others get their heads wrapped around your circumstance.

If the current (or pending) term of employment is known from the beginning to be of greater than one year endurance, your employer may elect to tax per diem now to forego liability later. That circumstance is not uncommon.

[owsi84621]

Same employer with 76 days off for good behavior, accepted assignment to a different location, after the new year. Current contract with employer states 8 month contract at this site and the employer is now trying to say that I've been at the same place for a year or more. Because of this I am trying to figure out what signifies a significant break or any break for that matter. I've also wrote to my congressman, asking for clarification through official channels with page, paragraph and verse out of their own tax documents. If I can get the direct answer from their codes it will be a win for all of us. We would then know the rules and be able to cite them.

[traveltax]

Same employer with 76 days off for good behavior, accepted assignment to a different location, after the new year. Current contract with employer states 8 month contract at this site and the employer is now trying to say that I've been at the same place for a year or more. Because of this I am trying to figure out what signifies a significant break or any break for that matter. I've also wrote to my congressman, asking for clarification through official channels with page, paragraph and verse out of their own tax documents. If I can get the direct answer from their codes it will be a win for all of us. We would then know the rules and be able to cite them.

You are barking up the wrong tree if you are calling your congressman/woman. The rules are found in the administrative part of the IRS policies which follow the Code. See my blog that I have linked below. The 12 month rule is just ONE benchmark of a tax home shift. A tax home by definition is your principal place of INCOME (not your permanent residence). If you have repetitive, frequent or seasonal income in the same area that is significant in relation to any other location, we are done with the analysis- that place is your tax home regardless of where you choose to maintain your personal residence. IF you do NOT have a principal place of income going from site to site randomly nor have breached the 12 month rule, THEN your tax home can default to the place that you have significant expenses to maintain a dwelling

A Break in Service (BIS) should be significant. We try to keep our clients from spending > 12 out of 24 months in the same area AND avoid seasonality

https://traveltax.wordpress.com/references-and-citations-2/

I can also provide you a tax best practices policy from the healthcare staffing industry trade group which addresses BIS issues

[SloGlo]

Actual lodging expenses and the Federal per diem for meals.
This assumes that you have a tax home vs a permanent residence as those two things are different

what udder expenses can be deducted, personal care, laundry, entertainment?

[traveltax]

what udder expenses can be deducted, personal care, laundry, entertainment?

Since you are not in sales, entertainment is a personal expense
What specifically do you mean by "personal care"?
Laundry can be deducted for expenses on the road when away from your tax home

May want to look at our FAQ page on our website

[traveltax]

It's almost that time of year again.....and I'm wondering if anyone has a line on a good tax professional that is up on the per diem rules. Since Deb the Tax Lady retired last year, who are you going to use?

Feel free to contact us

[traveltax]

Feel free to post any tax questions

[UncaBuffalo]

Feel free to post any tax questions

Okay, not sure this is really a tax question, but... Concerning the reporting of a foreign bank account: how soon does it need to be done after the account is opened?

Just started a job in South Africa. Per Diem being paid into a South African bank. I know I have to tell IRS about the existence of the account, but...am I safe waiting until I file my 2022 taxes in 2023? (Account opened this month.)

Thanks for any pointers!

[traveltax]

If you opened it this year (2022) then you will report it next year

[UncaBuffalo]

If you opened it this year (2022) then you will report it next year

Thanks!