Rent deducted from earnings

Jan 24, 2013 1 Replies

I believe I already know the answer to these questions, but I just want to make sure I'm not missing anything. A salesman works on a 1099 basis for a single company. This company arranges housing for the salesman in the city where the sales take place, and deducts rent for this housing from the earnings paid to the salesman.



Is the salesman taxed on the entire earnings before the rent deduction, as the rent is a personal and not a business expense of the salesman?



The salesman generally sells in a single location for any given day, although this location changes frequently from week to week. Can the salesman deduct mileage from his housing to the day's location, or is it considered commuting since there is only one location for a given day?



If it matters, the salesman has no permanent home that he expects to return to after leaving this company. In fact, the only house he owns is up for sale.



Thanks, Ed


BEGIN QUOTE publication 463

If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home.

END QUOTE

Also, amounts you pay for your home are personal expenses and are not deductible, so I'm guessing nothing is deductible here. If he had a permanent home, then amounts paid for rent while away from home would be valid business expenses.

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