IRS Business Travel Definition for “Away From Home”

When determining what qualifies as business travel, an overnight stay is not the only requirement. The IRS also specified that the taxpayer must have travel “away from home”.

To travel away from home the taxpayer must travel to an area that is outside of the tax home for a period substantially longer than an ordinary day’s worth of work. The IRS business travel definition specifies the tax home as the entire city or general area where the main place of business is located. For example, if your office is in Sacramento and you travel for business to San Francisco and you stay at a hotel for one night, and eat meals and work, these expenses would be deductible are travel expenses. However, if you travel for work within Sacramento and rent a hotel for the night, these expenses would not be deductible because you did not leave your tax home. If the taxpayer regularly works in more than one area, then their tax home is the general area where the main place of business is located. This main place of business will likely be where the taxpayer spends the most amount of time. For more information on this tax topic, see IRS Tax Topics, Topic 511-Business Travel Expenses.

Factors to Determine Tax Home

The following three factors can be used to determine tax home if the taxpayer does not have a regular place to work.

  1. The taxpayer performs part of their business in the area of the main business home and uses that home for lodging while doing business in the area.
  2. The taxpayer has living expenses are the business home that are duplicated because the business requires the taxpayer to be away from that home.
  3. The taxpayer has not abandoned the area in which both is the historical place of lodging and that the taxpayer has claimed is the main home; or the taxpayer often uses the home for lodging.

Satisfying these three requirements means that the taxpayers home is where they regularly live. Depending on all of the facts and circumstances, by satisfying only two of these requirements, it may be considered a tax home. Satisfying one factor means the taxpayer is itinerant; that tax home is wherever the taxpayer works and the taxpayers cannot deduct travel expenses.

Source: IRS Publication 463, Ch 1, Travel

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