Away From Home on Business - IRS Rules
Learn what the IRS considers being "away from home on business." This is an important tax topic to understand if you travel for your job in any capacity, as the rules can be somewhat subjective. Make sure you speak to a qualified local tax professional if you have questions.
There is no specific mileage definition for being away from home. It is based upon what constitutes the individual’s tax home.
“Tax home” is generally the location of a taxpayer’s main place of business (not necessarily the place he/she lives). If taxpayers work regularly in more than one area, the main work location controls--look at such factors as total time, amount of work, and relative income at each location to determine main business place (amount of income is first in order of importance).
For a taxpayer with no main business location, residence may be considered their tax home if a taxpayer:
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Does some business around his/her residence and uses it for lodging while doing business;
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Duplicates living expenses at his/her residence because the job requires being away from home;
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Has not left the area of his/her traditional home, close family resides there, or taxpayer often uses the home for lodging.
If all three factors apply to the taxpayer, tax home is where the taxpayer’s home is. If only two factors apply, facts and circumstances determine. If only one factor applies, the taxpayer is an itinerant and no away-from-home expenses are deductible.
Example - Determining Tax Home - Tom, an outside salesperson whose territory covers the western U.S., is employed by a firm whose main office is in Denver. Tom spends about one month a year in Denver for both business and non business purposes, but most of the time he is on the road for his sales job.
- Determining Tax Home Example
He owns a home in Denver where his wife lived all year; the home has been the couple’s residence for several years. Tom’s tax home is Denver because he meets all three factors listed above.