Travel expenses for employee at 2 business locations

Hi gang, hope you summer is going great! I have a couple to throw to you "wolves"!

Taxpayer is an employee, and serves her employer at 2 locations - in two different states.

Taxpayer's home state is A, and taxpayer and her husband live there. Taxpayer's husband works entirely for a different employer in state A, they have their house and all the trappings of residency there.

As I said, though, taxpayer's employer has her at 2 locations. Her W-2 shows $27,000 in earnings in state A, and $30,000 of earnings in state B.

When in state B she stays at a hotel, and eats in restaurants. I estimate she's there about 3 days a week, or more than half the work week. The assignment is indefinite.

Travel and lodging in state B deductible?

She clearly has a "tax home" in state A, but would the "Markey test", to determine PRINCIPAL place of business trip her up? ============= As an employee can only have one "tax home" with regard to an employer, one or the other place will be a temporary location invoking travel expenses. What is the difference in expense amounts for the two locations? Of course, she wants the lesser expense location to be ruled personal and the higher one as travel, but if there's little difference, does it really matter which one?

I thought you could only deduct travel expenses when you are temporarily away from home. No deduction for an indefinite assignment. The OP said the assignment is indefinite. Am I missing something?

If I'm wrong about this and the expense is deductible, it goes on Form

2106 and feeds Misc. Itemized Deductions on Schedule A.

A hotel and restaurants has to be more expensive than living in her home and cooking.

I would say that there are a lot of very short-term away-from-home assignments (e.g. a 3-day assignment each week), each followed by time at home (and in the home-state office).

Seth

The OP said the assignment was indefinite. Therefore, it sounds to me as if this person commutes to two different jobs. Commuting costs are not deductible regardless of distance traveled to get to your job. This is not an unusual occurrence as I have personally prepared returns where the individual commutes to two different jobs.

I took the OP's facts to be in a typical 5 day working week the spouse is indefinitely working 2 days at her tax home and 3 days at an out-of-town location for the same employer. If that is correct, unreimbursed out-of-town costs are deductible.

I thought you could only deduct travel expenses when you are temporarily away from home. No deduction for an indefinite assignment. The OP said the assignment is indefinite. Am I missing something? =============== I read this as if the employee is alternating between two locations. Therefore, each trip to the non-tax-home location is not indefinite but temporary as it is less than one year. I understood the alternation to be between daily and weekly, and that the locations are not in the same general area (thus not having a "locality" as a tax home).

The OP said the assignment was indefinite. Therefore, it sounds to me as if this person commutes to two different jobs. Commuting costs are not deductible regardless of distance traveled to get to your job. This is not an unusual occurrence as I have personally prepared returns where the individual commutes to two different jobs. ====================== If this were two different employers, I'd agree (as there's no direct travel between them). However, it's not. It's a single employer with multiple locations. One of those locations will be her tax home; the other won't. Travel to the non-tax-home location is deductible because it's not her commute.

On 7/19/12 4:24 PM, D. Stussy wrote: [snip]

It is my understanding that it is quite possible to commute to two different locations on different days. E.g., an employee may have two different offices in the same city. Monday and Tuesday he commutes to office A and Wed thru Fri he commutes to office B. Neither trip is deductible because he is commuting to his regular job. If you move office B to another city, the trip is still a commute unless the visits to that other city are temporary (what the courts have said is one year or less).

The OP said the work in state B is indefinite. Unless I hear differently, I take that to mean it is meant to last for more than a year.

The OP was wrong.

Each trip to state B has a known ending date, under a week from arrival.

What is indefinite is the number of such trips.

Seth

The OP said the "assignment was indefinite." This means that two days a week the t/p worked at location A and 3 days a week the t/p worked at location B. It is irrelevant as to how far away each location is from the tax home. Your just trying to split hairs.

Until the t/p acknowledges that working at location B was not indefinite and was merely temporary... an assignment to last for a year or less, it is commuting.

Consider the following (not exactly true, but as an example): I work for a company whose headquarters is in MN. Once a quarter, they send me to work in the NY office for 2 weeks. That happens every quarter, has been happening for several years, and is expected to continue happening for the indefinite future.

Would you claim that those trips are not deductible? I would say that each one is deductible, it's for a definite period of two weeks.

Similarly, the OP's trips are each for a definite period of three days, and happen more often.

Seth

There is nothing I am going to say if you can't see the difference between a two week business trip out of town a few times a year is not the same as a regular assignment that requires you to commute 2 days a week to office A and 3 days a week to office B. You are talking apples and oranges.

Alan, you see a difference without a meaning. A taxpayer can only have one tax home. Business related travel away from a tax home is deductible. The tax home of the taxpayer in the OP is either location A or location B -- one, not both.

necessary expenses of traveling away from home for your business, profession, or job. ... You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away."

Generally, a taxpayer's tax home is her main place of work. The OP refers to the "Markey test." There is an article describing the implications of the tax home issue at

on my reading of that article and other sources, it is my opinion thatstate A is the taxpayer's tax home and travel costs to state B are deductible. Further, in my opinion, the only way to deny deductions by the taxpayer is to successfully show that she does not have a tax home. The provided facts do not support that assertion.

home. Business related travel away from a tax home is deductible. The tax home of the taxpayer in the OP is either location A or location B -- one, not both.

necessary expenses of traveling away from home for your business, profession, or job. ... You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away."

the "Markey test." There is an article describing the implications of the tax home issue at

on my reading of that article and other sources, it is my opinion thatstate A is the taxpayer's tax home and travel costs to state B are deductible.>

successfully show that she does not have a tax home. The provided facts do not support that assertion.

It is a two pronged test. You didn't read all of Topic 511. Here's the second prong:

Travel expenses paid or incurred in connection with a temporary work assignment away from home are deductible. However, travel expenses paid in connection with an indefinite work assignment are not deductible. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if it is realistically expected that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for less than one year, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.

It is not "commuting to a different location"; that would involve the taxpayer staying at home every night. It's a business trip to the remote location weekly, with the taxpayer staying in a hotel.

Seth

I did read all of Tax Topic 511 and I read more. What is not said in Tax Topic

511 is when an assignment is indefinite or is expected to last more than a year, then the taxpayer's tax home becomes that indefinite assignment location.

Again, a taxpayer can have only ONE tax home. If the taxpayer's tax home is state B, then her lodging, transportation, meal, etc. costs incurred while traveling to state A on business are deductible.

Again, the only way to successfully assert that the taxpayer has no travel deductions is to successfully assert that she has no tax home. In my opinion, the provided facts make it clear that state A is her tax home. If I'm wrong about state A being her tax home, then state B is her tax home. If neither is her tax home, then she is an itinerant. However, in my opinion, the facts do not support the assertion that she is an itinerant.

One more again - Just because the OP used the word "indefinite" does not mean "indefinite" as used in tax law applies here.

Seth, before you go very far down this path be aware, it isn't necessary to sleep at home for a trip to work to be commuting. I've heard of an airline pilot who lived in Minnesota and commuted to his base in Los Angeles in order to do his job. He did NOT get to deduct his lodging or meals while in LA. That pilot also did NOT do work for that same employer out of Minneapolis-St. Paul International.

I'll make a new point. If she is traveling by personal automobile, the taxpayer gets to deduct auto mileage simply by leaving from and returning to the state A office on her trips to state B. In that case, all we're really arguing about here is lodging, meals and local transportation in state B.