What would you do?

[ddoshan]

Client with a family and children lives in State A. His job is in State B where he rents a place year around and spends around 70% of his time working for his employer there. The other 30% of the time he is able to work from his home in State A. The nature of his work (done by phone, internet, etc) for his employer allows this, as it is not necessary for him to actually be or work from his employers business location at all times.

What travel expenses, if any, would you allow? Would you maintain that his tax home is in State B and, if so, allow him to deduct travel expenses while working from home such as his share of living expenses, food, lodging, etc.

Or not allow anything at all under the assumption that being able to do some work from home is basically for his, the employees, convenience and not necessarily for his employers convenience or requirement.

[Lion]

Tax Home

His tax home is state B. He has no travel expenses, unless his company sends him away from B on business and doesn't reimburse. When employee works from home to be with his family, it's for personal reasons. Company doesn't require him to live in state A.

[taxea]

If he does his job via telecommuting then why does he even need a location in the other state?
What kind of work does he do? Under what circumstances does he need to be in the other state? I think more info is needed before we can say there are no 2106 deductions that apply.

[ddoshan]

It's just that the majority of the time he has to be there at the office in the other State in person to do his work, meet with people, whatever. There are times when he can do his work from home and it is not necessary for him to be in the other State in the office there. He can handle what needs to be done via the internet and or over the phone. Client indicated that he does about 70% of his work at location in State B and the balance from his home in State A.

I thought maybe he at least had an out such as the example shown in Pub 17 page 177, example 2.

[BHoffman]

Hi ddoshan - will you take a look at TTB starting on page 8-11 to see if that info will help? It talks about tax homes and employee expenses, etc.

[ddoshan]

Hi ddoshan - will you take a look at TTB starting on page 8-11 to see if that info will help? It talks about tax homes and employee expenses, etc.

I have read everything under the sun about travel expenses, tax home, etc. numerous times over the years. Thing is at times I weaken, I guess, and try to justify some reason that the client would be allowed a travel expense that I feel probably does not meet the criteria for.

[BHoffman]

I don't know about you, but sometimes it's a real good idea to play hooky and relax for a day to clear the mind It is just beautiful outside here today and very hard to sit indoors!

[JG EA]

It's just that the majority of the time he has to be there at the office in the other State in person to do his work, meet with people, whatever. There are times when he can do his work from home and it is not necessary for him to be in the other State in the office there. He can handle what needs to be done via the internet and or over the phone. Client indicated that he does about 70% of his work at location in State B and the balance from his home in State A.

I thought maybe he at least had an out such as the example shown in Pub 17 page 177, example 2.

Yes, I have used this several times. Count his home as in the example as 2106 expenses. And the other city as his tax home. So, travel expense to go to home to work, a portion of families meal and lodging, etc.

[dan doshan]

I have never used that option. How on earth would you ever figure it out? If this option is used could one use the standard meal allowance?

[JG EA]

It says specifically a portion of the families food money so I don't think so, but it may be an option.As for the rest of it - just regular things that go on a 2106. You just have to wrap your mind around it as if TP lived in the other state.

[KathMorgan]

Go with your Gut!!

Go with your gut and not your heart! You said it all in the first post. he travels for his convienence not the employers. His tax home is in state B. I agree with Lion's original reply.