As you know, you can deduct your away-from-home overnight travel expenses.
But what tax rules do you need to know if you want to travel, or need to travel, to an out-of-town business location for an extended period?
First, your travel to and expenses of living in this out-of-town location are deducible only if this is a temporary work location, which the IRS defines as a location where you expect to spend less than one year.
Second, you have to travel away from your tax home. Your tax home is not your personal home. Your tax home is the location of your principal place of business.
You can run into these rules when you create a second business location in a second state.
For example, a business owner who has an operation in Wisconsin creates a second business location in Florida. One of the two locations is going to be the principal place of business. Traveling to and living in the second location is going to create tax deductions for travel.
If you have any such travel coming up or in your plans, let’s spend a little time making sure you qualify to deduct the travel.