Truck Driver and Tax Home

[tonia2021]

Does a truck driver have a tax home? I have a client that does over-the-road trucking across the country. Does he have a tax home, or is his truck his tax home. If the truck is his tax home does he qualify for the per diem for days away from his home (apartment)?

[DaveO]

Treat legal residence as tax home

Wherever his drivers license and apartment is would be his tax home.

[tonia2021]

I was at a CPE class and the speaker mentioned that for some truck drivers, their tax home might be their truck. Meaning they don't qualify for the per diem for the days away from home, since they aren't away from their tax home while they are driving. Any thoughts on this?

[dmj4]

Did he mention what might make this true for some truckers?

Thanks

[erchess]

Did you perhaps misunderstand?

I was at a CPE class and the speaker mentioned that for some truck drivers, their tax home might be their truck. Meaning they don't qualify for the per diem for the days away from home, since they aren't away from their tax home while they are driving. Any thoughts on this?

I don't believe that a tax home can be anything but a geographic area where the taxpayer derives the greater part of his or her income. It is possible to be a transient worker who has no tax home and I can see how a truck driver would end up in that situation but the truck would not be his tax home. However a person with no tax home would not be able to deduct the costs of meals or lodging while away from home and the per diem rates are one way those costs are often computed. Think of it this way. If you don't have something you can't be away from it. I do not own a Super Bowl Ring so it is impossible for me to go away from my Super Bowl Ring. See pages 8-10 and 8-11 starting in the right hand column of 8-10 under the heading Travel and Lodging?

Now I have a question for someone more learned than I. I am used to thinking that in order to have a tax home you had to have a qualified residence that could conceivably be a boat or campsite as long as there was some sort of toilet, some place to cook food, some place to eat, some place to sleep, and some sort of shelter. I find nothing about that in TTB so I wonder if I was just wrong or if things have changed.

[S T]

Always been a question

Erchess, thanks for posting that.

I have always had a problem with "Tax Home". So maybe we can somehow nail down the definition!

Sandy

[erchess]

Sandy, it's a slippery concept

A decent working definition of a taxpayer's tax home would be "the general area where he derives the greater part of his income". Two taxpayers could live in two halves of a duplex and have offices in the same building nearby but have very different tax homes. One guy normally drives half an hour to work where he earns most of his income. He could be out of his tax home when he drives a bit over an hour to another location and works long enough that it is reasonable for him to need food and rest before returning either to his office or his dwelling. Now let's say the other guy goes from home or the office to an airport and hops a private or commercial flight across the country where he does the activity that earns him most of his income. If he earns enough of his income on these long trips, he may be told that he has not left his tax home on any of them especially if he does not go to any one of them very often. If he flew to one location often enough and earned enough money there, the way I read TTB he could consider that location his tax home.

You have to understand that one of the principal reasons for our tax code is to permit tax lawyers to make money with endless debates over seemingly trivial details. Another principal reason for our tax code is that whenever a new provision is put in, some tax lawyer whether working for a taxpayer or working for the IRS puts on that provision an interpretation that makes Congress unhappy and that stands up in the courts. The Congress then tweaks the provision and the process is endlessly repeated.

[S T]

Tax Home More

So permanent residence has nothing to do with Tax Home?

There are lots of construction taxpayers, lets say live in Corona, Calif, and drive to outer Los Angeles, Ca where they have to report to work for a job assignment through their Employer. The Employer is based in Riverside, Calif which is approximately 10 miles from Corona, Calif. But the job assignment is in Los Angeles, Calif which is 80 miles one way from the t/p residence, and 90 miles away from the employer.

Some of these construction workers have job assignments in all varying areas away from their residences. some jobs last 30 days, some last 90 days or even 6 months. They go where the work is that their employer has accepted a contract.

The t/p tax home is not Corona, it is Los Angeles or could be Palm Springs, or Ventura or some other place. How do you define?

This doesn't seem right.

Sandy

[oceanlovin'ea]

Good question, Sandy

I have some people like that. For example, my brother does commercial insulation installation. He has worked during the past year for several different employers. One company has a contract for a job that last 2 months but when that job is done, he might not have another contract right then. So he will go to another company that does have work and work for them. So he has worked 50 west of where he lives, 40 miles east of where he lives, 100 miles east of where he lives, etc. He even took a job in Louisiana for about 3 months last year.
He has a home and most jobs he comes back to his house at night. Occasionally he might stay in a motel for a night but mostly comes back home.
I have always assumed his tax home is where he lives. He can't itemize so I have never used his travel expenses.
So we could use some enlightenment on this subject.

Linda

[solomon]

TC Memo 2003-65

From a truck driver case:

"...“home” generally refers to the
taxpayer’s principal place of employment, if he has one;
otherwise, he may treat as his tax home a permanent residence at
which he incurs substantial continuing living expenses."

From Pub. 463:

No main place of business or work. You may have a tax home even if you do not have a regular or main place of work. Your tax home may be the home where you regularly live.

Factors used to determine tax home. If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is.

1. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.

2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.

3. You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.

If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses.

[S T]

Solomon

Thank you for your post, that is a big help in determining tax home.

Sandy

[arlo]

Per Diem truck driver

Truck driver delivers mail 150 miles from his home. Over nite stay is provided. Next day he drives back home. The next the same procedure. I have always used 2106 for the per diem deduction that goes to schedule A. He thinks it should not be a schedule A deduction. Tax Book 8.2 says that is where it goes. His other drivers say they are deducting it from income. I know I am correct. Just want to get someone else to agree with me.

[RitaB]

Well, yes, you are right

Truck driver delivers mail 150 miles from his home. Over nite stay is provided. Next day he drives back home. The next the same procedure. I have always used 2106 for the per diem deduction that goes to schedule A. He thinks it should not be a schedule A deduction. Tax Book 8.2 says that is where it goes. His other drivers say they are deducting it from income. I know I am correct. Just want to get someone else to agree with me.

He's an employee, right? Where does he think the expenses should go?

He's not self-employed, is he?

I have a ton of people who "think" they are deducting their $425 in medical expense and $78.04 in "tithes" because I just fill out the Sch A since they didn't understand the first three years I explained the standard deduction.

[Jiggers]

I have a ton of people who "think" they are deducting their $425 in medical expense and $78.04 in "tithes" because I just fill out the Sch A since they didn't understand the first three years I explained the standard deduction.

And don't you still have some "old-timers" who still bring in gallons of gasoline purchased so they get a tax deduction on Schedule A for the taxes paid on it?

I did up until a couple of years ago when they died!

[RitaB]

Missed that one

And don't you still have some "old-timers" who still bring in gallons of gasoline purchased so they get a tax deduction on Schedule A for the taxes paid on it?

I did up until a couple of years ago when they died!

No, I am apparently a spring chicken.

I do have an old timer that brings me apple butter every year. She did not fall off the baloney truck when it comes to canning, either.

Wow, I'm starving now.