Thursday, January 20, 2011

Travel Expense deduction, please!

Q.  I just received word that I will be starting a job in South Dakota. It seems to me that I should be able to deduct travel expenses since I will be leaving from Yuma the last week of April. How much can I deduct? MG, Arizona

A.  With the limited information you gave, most likely you won't qualify to deduct any travel expense. Basically, when you leave Yuma, you will relocate your tax home to South Dakota. For most of us, where we park is where we work, thus making it our tax home. If you were self employed and Yuma was your tax home, a temporary leave for business reasons in South Dakota might qualify. However, if you are working for someone else, your travel comes under the heading of commuting, which has always been considered a personal expense.

The better question to ask yourself is would you qualify to take the moving expense deduction? Again, that depends on your situation. Generally the move must be a minimum of 50 miles from your former workplace. Then you must work full time at least 39 weeks during the 12 months after the move. Self employed individuals must work full time at least 78 weeks during the 24 months after the move. There are a few exceptions, so check them out if you think you qualify. Here's a link to Pub 521, which includes all the rules and instructions for Form 3903.

Most RVers work part time jobs to supplement their income and will not qualify for any type of travel or moving expense. Perhaps it will help to think of it this way. Our elected US Senators and Congressmen can't deduct their travel expenses either. They must continue to reside in the state they represent, however, their tax home is clearly in Washington DC.

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