Temporary Work Location (in Different State)

photo credit: Shenghung Lin

Hello Tax Advisor!

I’ve been offered a month-to-month contracting job in Iowa.  Looks like I’ll need to rent an apartment for the time I’m down there.  What’s the IRS say about being able to deduct these living expenses?? Herb B.  (in wonderful) St. Paul

Hello Herb:

In general, taxpayers may deduct ordinary and necessary expenses paid or incurred in connection with the operation of a trade or business.

In contrast, the IRS disallows deductions for personal, living, or family expenses, including meals and travel costs.  Transportation between a taxpayer’s residence and principal place of business are normally considered nondeductible personal expenses.

An exception applies, however, if the taxpayer is working away from home and the employment is temporary, as opposed to indefinite, in duration.

In that event, the taxpayer may deduct meals and travel expenses associated with the temporary position. Furthermore, a taxpayer is not treated as being temporarily away from home while pursuing employment that lasts longer than one year.

If the employment is initially expected to last for a year or less, but subsequently continues for longer than a year, the employment is treated as temporary until the sooner of when the taxpayer’s reasonable expectations change or one year elapses. Indefinite employment carries the prospect that the work will continue for an indeterminate and a substantially long period.

Regards Joe Rapacki

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