Kari Posted January 19, 2011 Report Share Posted January 19, 2011 I have a client that lives in Georgia but couldn't find any work there. He found a job in North Carolina and wants to deduct meals, lodging, and mileage even though his wife still lives in Georgia. He has been there for six months and will continue to be there unless he can find a job in Georgia again. He insists that his expenses are deductible the first year, but I disagree. Isn't the apartment in NC his "tax home"? Am I wrong? Can he deduct business travel expenses for this job? I think if anything he can only deduct moving expenses. Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 19, 2011 Report Share Posted January 19, 2011 He is talking about a temporary job location which doesn't apply in his case. When your employer moves you to a temporary job location for a year or less, you can take deductions. I think he doesn't qualify for either moving expenses or temporary job location. If he goes to different work sites, he might qualify for some mileage. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 19, 2011 Report Share Posted January 19, 2011 Pacun, I have to disagree with you on that, as long as his INTENT is for this to be a temporary job, while still looking for work at home. In that case, his 'tax home' is still the old home, unless he stays there over a year. The job does not have to be an 'assignment' from his old employer, to be a temporary job. Read the examples in Pub 463. If he took the job INTENDING to return to his normal tax home in less than a year, and his INTENSION is that he will not stay in the new location for a full year, then I would agree that he can take the 'away from home' expenses. Just make it very clear that this advice is based on his NOT staying on that job more than 364 days! And that it does NOT mean he can take them for the first 364 days, then keep on at the job and just stop taking them. He has to stop taking them AS OF THE DAY HE DECIDES TO STAY ON THE NEW JOB INDEFINITLY. GO OVER ALL THREE EXAMPLES WITH HIM, SO THAT HE IS CLEAR ON HOW HIS INTENT EFFECTS THE TAX OUTCOME. Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 19, 2011 Report Share Posted January 19, 2011 Good info KC. I looked at Pub 463 and I looked on the temporary job assignment for the word INTENT and I couldn't find it. Interesting enough, the word INTENT is not used at all on Pub 463. This is close enough for your point: If Kari's client realistically expects that he will work one year or less in NC, he can deduct expenses. Since he was there for 5-6 for tax year 2010 and until today he realistically expects to go back to Atlanta before a year, I think it is safe to take the deductions. Next year you will have reality and the only question will be: When did you come back from NC? or Are you still working in NC? If the answer makes the temporary job assigment longer than a year, no more deductions for 2011 but he doesn't need to amend 2010. Quote Link to comment Share on other sites More sharing options...
Kimberly K Posted January 19, 2011 Report Share Posted January 19, 2011 Pacun, I have to disagree with you on that, as long as his INTENT is for this to be a temporary job, while still looking for work at home. In that case, his 'tax home' is still the old home, unless he stays there over a year. The job does not have to be an 'assignment' from his old employer, to be a temporary job. Read the examples in Pub 463. If he took the job INTENDING to return to his normal tax home in less than a year, and his INTENSION is that he will not stay in the new location for a full year, then I would agree that he can take the 'away from home' expenses. Just make it very clear that this advice is based on his NOT staying on that job more than 364 days! And that it does NOT mean he can take them for the first 364 days, then keep on at the job and just stop taking them. He has to stop taking them AS OF THE DAY HE DECIDES TO STAY ON THE NEW JOB INDEFINITLY. GO OVER ALL THREE EXAMPLES WITH HIM, SO THAT HE IS CLEAR ON HOW HIS INTENT EFFECTS THE TAX OUTCOME. Totally agree, and definitely stress that this is not the norm with this job. A number of years back, I had a client in the same situation but my advice went through one ear and out the other. After I finished his return for the year, he went back to his new employer and told 5 of his friends about taking mileage & meals. When they traveled all the way to my office at the time, they left without taking the mileage & meals, but they gained about an hours worth of tax education on the subject of commuting. Why an hour? Thats about how long it took for them to get that just because you work at the same place doesnt mean that you get the same deductions as all of your friends! Quote Link to comment Share on other sites More sharing options...
Kari Posted January 19, 2011 Author Report Share Posted January 19, 2011 Thanks to both of you for your quick response and taking the time to help me. I am not brand new to the tax business, but my dad usually handled most of the dirty work so I'm just not clear on these travel expenses. My clients intent is to stay there less than a year, so can he deduct all his apartment rent? Is there a meal allowance? He also wanted to deduct the furniture he bought, can he? For mileage, can he deduct commuting to and from work? Can he deduct mileage going back and forth to his main home in Georgia? Cell phone? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 19, 2011 Report Share Posted January 19, 2011 While, based on what you told us, he can take the 'away from home' travel expenses this year, I think that YOU need to read Pub 463 yourself, before you talk to him. All the questions you asked in this post are covered there. I will just say 'NO" on the furniture, and leave it to you to read up on the other items. Like most tax questions, there are seldom any simple, yes or no answers, it's all a question of the actual details. Just remember, taxes are not 'fair' or 'unfair', the issue is 'legal' or 'not legal'. And the code is so complex that often three clients with BASICALLY the same situation end up with three different answers, if you give them each the right answer for THEIR situation. It's easy to say "that is not fair", but it is how it is. OUR JOB is to give each client the best advice we can, and IMHO to educate them enough that they at least understand that if they want Tax Break X they HAVE to follow the rules for Tax Break X COMPLETELY, and in the right order. I often use the example of a Home Run. Even if he hits it over the fence and out of the park, if he does not touch ALL the bases, in the right order, he does not score! Men especially seem to get that example better than any other one I've been able to come up with. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 19, 2011 Report Share Posted January 19, 2011 Men especially seem to get that example better than any other one I've been able to come up with. KC, Are you being sexist? I am totally offended that you think that women would not understand a baseball analogy. You should appologize to the women on this board for your sexist remarks!!!!!! Just kidding. I will remember that one and use it in the future. It is pretty good. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 19, 2011 Report Share Posted January 19, 2011 Tom, you of all people on this board should know I do not have a sexist bone in my body! I KNOW that women are the superior sex!!! ROTFLMAO Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 19, 2011 Report Share Posted January 19, 2011 Unfortunately, so do I. Thats what 20 years of marriage (on March 3rd) will do to you. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
Kari Posted January 19, 2011 Author Report Share Posted January 19, 2011 I wasn't offended. I love baseball and that is something my dad would say. KC - Thank you. I did read Pub. 463, I'm still not sure if he can take the mileage to and from his home in Georgia. He goes there to see his wife a couple times a month. Kari Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 19, 2011 Report Share Posted January 19, 2011 Good info KC. I looked at Pub 463 and I looked on the temporary job assignment for the word INTENT and I couldn't find it. Interesting enough, the word INTENT is not used at all on Pub 463. This is close enough for your point: If Kari's client realistically expects that he will work one year or less in NC, he can deduct expenses. Since he was there for 5-6 for tax year 2010 and until today he realistically expects to go back to Atlanta before a year, I think it is safe to take the deductions. Next year you will have reality and the only question will be: When did you come back from NC? or Are you still working in NC? If the answer makes the temporary job assigment longer than a year, no more deductions for 2011 but he doesn't need to amend 2010. I agree, the word INTENT is not there, but the word EXPECTS is. Page 4, middle column. And if his intent is to not be away more than a year, then he expects to not be away for more than a year, so the job is temporary, based on that expectation, right? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 19, 2011 Report Share Posted January 19, 2011 I wasn't offended. I love baseball and that is something my dad would say. KC - Thank you. I did read Pub. 463, I'm still not sure if he can take the mileage to and from his home in Georgia. He goes there to see his wife a couple times a month. Kari He can not take the mileage back and forth to his home but once. BUT, he can take the mileage that he would have had had he stayed at the job location. So if, for example, his average weekly mileage on weeks he stays all seven days is 200 miles, then he can take that same 200 miles even in the weeks that he actually goes home for two days. Ditto for meals. Quote Link to comment Share on other sites More sharing options...
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