Have a Tax Question? Ask a Tax Expert
I will take your questions one at a time. I will do them in sections so that we make sure we are able to take care of any misunderstanding along the way.
1. According to the IRS you can claim lodging and expenses if you are required to travel away from home for business purposes, of a temporary nature. You would include this on your schedule C expenses. Temporary is an assignment less than one year. Do not take this on your schedule A...It is a schedule C expense:
The IRS defiines temporary assignments as 1 year or less. More than one year and these are no longer deductable business expenses on your schedule C.
2. You can not take a daily meal expenses on schedule c because you are temporarily away from home.
Determining temporary or indefinite. You must determine whether your assignment is temporary or indefinite when you start work. If you expect an assignment or job to last for one year or less, it is temporary unless there are facts and circumstances that indicate otherwise. An assignment or job that is initially temporary may become indefinite due to changed circumstances. A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment.
3.Even though this trip is for business purposes and you can deduct your general lodging and meals, in and around transportation. So you have to apportion personal use and business use for not only the auto lease, but things like recreation, and personal visits, etc.
4. You can claim the mileage for your personal use vehilce, including tolls, and parking to and from your temporary assignment. You can not claim the commuting miles from the hotel to the work site, nor can you claim the mileage for personal use. You can claim the mileage of the vehicle for travel to clients and work sites, after first commuting to your first locaiton of your business day. You do not count commuting to the first job site or home from the last job site. You have to have a mileage log.
5. You can deduct dry cleaning.
The airport or station and your hotel, and
The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
NOTE: I recommended deductingn lodging and meals and transportation on schedule C, but for the rest taken them on schedule A.
Thank you for your reply. I was not clear on your response to question number 2 (the standard meal deduction). Since the contract is for less than a year, it is temporary, so I assume I can take the deduction. Also, did you have any input on questions 6 and 7?
Also, am I able to deduct the expenses related to the apartment, e.g., utilities?
For item six, I provided you a tabel taken from regulation.
For item 7, you can not take these expenses unless it is associated with temporary travel overseas. For temporary assignments overseas, the deduction is home maintenance and property management expenses, because you are required to maintain a home in the United States while assigned overseas.
If you sublet you can take these expenses against he rental income. Else you can not deduct them.
You can deduct the cost of the rental including utilities, water and sewage, but not cable.
You can not deduct maid servcie in the apartment in MD.
You can not deduct the basic cost of the phone, but you can apportion the actual individual phone calls from the personal and business phone calls, including the taxes for such calls.
That was a typo. for temporary assignments you can take the meal expenses. But they must be reasonable meal expenses. The normal test is the government perdiem rates for that area. If you are close to those figures you would be ok. What the IRS is trying to say is that it is not reasonable to have fourstar meals three times a day.
per deim website: http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC
The actual lodging and meals are not a problem as long as they are reasonable, the irs uses the tables above as a guide to what is reasonable. AS long as you are close you do not have to worrry.