20.7 When Are You Away From Home?

You have to meet the “away from home” test to deduct the cost of meals (only 50% deductible) and lodging while traveling. You have to be away from your tax home and satisfy the overnight-sleep rule (20.3) to be “away from home.” In general, your tax home is the city or general area in which your regular place of business or post of duty is located, regardless of where your family is.

EXAMPLES
1. Your residence is in a suburb within commuting distance of New York City where you work full time. Your personal home and tax home are the same, that is, within the metropolitan area of New York City. You are away from home when you leave this area, say, for Philadelphia. Meals and lodging are deductible only if you meet the overnight-sleep test (20.3).
2. Your residence is in New York City, but you work in Baltimore. Your tax home is Baltimore; you may not deduct living expenses there. But you may deduct travel expenses on a temporary assignment to New York City even while living at your home there.
3. A construction worker works for a utility company on construction sites in a 12-state area. Assignments are sent from his employer’s regional office; he is not required to report to the office. The IRS ruled that his residence, which is in a city in the 12-state area, is his tax home.

Are you constantly on the road?

If you move from job to job and do not work within any particular locality, an IRS agent may disallow your travel deductions on the grounds that your tax home is wherever you work; thus, you are never “away from home.” You are considered a transient worker.

If your deduction is questioned because you have no regular or main place of business, you may be able to show that your tax home is the area of your residence. If you meet the following three tests, the IRS will treat your residence as your tax home: (1) you do some work in the vicinity of your residence, house, apartment, or room and live there while performing services in the area; (2) you have mortgage expenses or pay rent for the residence while away on the road; and (3) the residence is in an area where you were raised or lived for a long time, or a member of your immediate family such as your parent or child lives in the residence, or you frequently return there.

According to the IRS, if you meet only two of these three tests, it will decide on a case-by-case basis if your residence is your tax home. If you meet less than two of the tests, the IRS will not allow a deduction; each of your work locations is treated as your tax home.

If you live in a trailer at each job assignment and have no other home, each job location is your principal place of business and you are not “away from home.”

Permanent duty station of service members.

The Supreme Court held that a member of the Armed Forces is not away from home when he or she is at a permanent duty station. This is true even if the service member has to maintain a separate home for family members who are not permitted to live at the duty station.

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