How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask jgordosea Your Own Question

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3000
Experience:  I've prepared all types of taxes since 1987.
Type Your Tax Question Here...
jgordosea is online now
A new question is answered every 9 seconds

My husband and I recently moved to another state. He still ...

Resolved Question:

My husband and I recently moved to another state. He still needs to conduct business where we moved from and would like to lease a place. Can he rent a place that has a bed and kitchen where he can conduct business and spend the evenings?
Submitted: 6 years ago.
Category: Tax
Expert:  jgordosea replied 6 years ago.

How far away did you move?

Is he renting it just for convenience or is is far enough that he needs to rest before returning?

Is he an employee working in the other state? Is he a sole propreitor or have an entity that does that business?

Thanks for the additional information.

Customer: replied 6 years ago.
Reply to John Gordos EA's Post: We moved to Montana. It is aXXXXXto Aspen, Colorado. He has no employees. He is a ski area marketing consultant for Anheuser Busch and Coca Cola
Expert:  jgordosea replied 6 years ago.

Greetings,

If his job is still based in Colorado but you have chosen to live elsewhere; then there is no deduction for the personal choice not to live near where he works. Your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home.

If this is travel away from where his job is based (away from his tax home) then he could possibly deduct the travel expenses. However, it would be much better to be reimbursed under an accountable plan and not have the reimbursements included in income (even if his income would be reduced for the expenses) . Unreimbursed employee expenses are miscellaneous itemized deductions subject to a floor so the deduction is only what is more than 2% of adjusted gross income on line 21 of 2007 Form 1040 Schedule A There may also be alternative minimum tax implications for miscellaneous itemized deductions.

For a discussion of travel expenses and links to publications see http://www.irs.gov/taxtopics/tc511.html

I hope this helps.

Best regards,

 

 

 

Customer: replied 6 years ago.
Reply to John Gordos EA's Post: He can live anywhere because all he really needs is a computer and phone. The only problem is he needs to return once a month for 5 days to meet personally with the ski areas he writes most of his contracts for Anheuser Busch and Coke with.

Also I have no idea what you mean by reimbursements. We thought you would just deduct the expenses.

Heidi
Expert:  jgordosea replied 6 years ago.

Hello again,

Many employers will reimburse (or pay back) employees for necessary travel expenses to conduct business.This can be done so that it is not included in the employee's income when the employee gives an account of the expenses incurred and then the employer only pays the amount that was spent.

The expenses are usually not deductible in the scenario where the employee chooses to live in another location and travel back to the sites needed for his job. From http://www.irs.gov/taxtopics/tc511.html For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals, or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

Presumably when you lived in Colorado, and he had the same job, he did not need to stay overnight (or incur travel expenses) to conduct his job as an employee there. When you moved away for personal or family reasons that makes the travel back to the job location not a business expense; but rather a family or living expense which is not deductible. Indeed he can live anywhere; so that says the choice live farther away and to travel is not business related.

I hope this helps to clarify even though it is likely not the answer you would like to hear.

 

 

Customer: replied 6 years ago.
Reply to John Gordos EA's Post: So...even though he is not an employee (he is a consultant pays his own taxes) the laws are still the same regarding deductions?
Expert:  jgordosea replied 6 years ago.

There are different rules in different situations.

Let me ask again, my previous question:

Is he an employee working in the other state? Is he a sole propreitor or have an entity that does that business?

Also,(a new question) where is his office?

Do his clients provide office space or does he rent an office in Montana or does he maintain an office in the home from whch he regularly and exclusively does his work?

Thanks for the additional information.

Customer: replied 6 years ago.
Reply to John Gordos EA's Post: Sole proprietor.

His office is in our home.

His clients do not provide office space for him.
Expert:  jgordosea replied 6 years ago.

Sorry we went down the wrong set of rules as it was not clear that he has an office in home and uses Schedule C.

As was said earlier If this is travel away from where his job is based (away from his tax home) then he could deduct the travel expenses.

Since it is now being said that his job is based in the home that does give a different result.

Travel for business is deductible when it is needed away from your work is based. For a discussion of travel expenses and links to publications see http://www.irs.gov/taxtopics/tc511.html

Meals and entertainment need to be tracked separately as those are entered separately on the Form 1040 (Schedule C line 24b.

I hope this helps to clarify and, again, sorry for the confusion in regard to his tax home.

Best wishes.

 

 

Customer: replied 6 years ago.
I am so sorry I was not clear! I am going to start over with hopefully ALL the specifics so you understand the situation and I get a clear answer.

My husband is a marketing consulting in the ski business. He is a sole proprietor and works out of the home. We recently moved from Aspen, Colorado to Dillon, Montana. He has rented a place in Aspen so he can return their once a month for 5 days to meet with the ski areas he has marketing contracts with. Is the place he rents fully deductible? He meets with his clients there and also sleeps there.

I hope this information is better then before.
Expert:  jgordosea replied 6 years ago.

Hello again,

Since he will work from home three weeks a month and travel the fourth week there is not the same problem of establishing he is "away from his tax home" as there was in the earlier conversation about an employee that chooses to move away.

So, any ordinary and necessary expenses for business travel are deductible when he is away from his "tax home". Meals and entertainment need to be tracked separately as those are entered separately (as there is a limit of deducting 50% of the cost).

That does not mean that the rent is fully deductible. If he uses the apartment for personal purposes the rent may be part business and part personal depending on the use of the rental. This would also be true for his meals if, for example, he were to take a day off and make a side trip for pleasure skiing one day of a week that he was there for business. That week, he would have 4/5 of his expenses for business and 1/5 for personal use of the apartment.

For a discussion of travel expenses and links to publications see http://www.irs.gov/taxtopics/tc511.html Please read about the recordkeeping requirements for these types of expenses. Refer to Topic 305 for information on record keeping.

I hope this helps now that we have the facts straight.

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3000
Experience: I've prepared all types of taxes since 1987.
jgordosea and 8 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.