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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I was unemployed for 4 months, finally accepted a position

Resolved Question:

I was unemployed for 4 months, finally accepted a position in another state, for a six month contract on a W2. Can I deduct the apartment and other expenses i am incurring to keep this job?
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

Unfortunately, your living expenses in another location would not be deductible.

The IRS considers your "tax home" to be the general area or city where you are employed. If you accepted a job in a city where you or your family do not presently live, then that city is now your tax home. Expenses for living in the area of your tax home are not deductible. You also could not deduct the expenses involved for traveling between your new tax home city and the city of your personal residence.

Here is the example cited in the IRS coverage of this topic:

Generally, 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. 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.

Here is a link to the publication which discusses this issue.

What you may want to consider is seeing if this company will hire you as an independent contractor rather than as a W-2 employee. If you were hired as an independent contractor, then you would be considered to be self employed, and your tax home would be the city where your business is located, which would likely be the city where your personal residence is located, as this would be your home office. You could then deduct the cost of traveling to this other city for work as an independent contractor.

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Thank youCustomer

Expert:  Merlo replied 8 years ago.
Hello againCustomer

I just re-read your original post and apologize that I missed the fact this was going to be a temporary assignment for you of only six months.

As long as this job is temporary and is not expected to last for more than one year, then your tax home does not change. Your tax home will still be Columbia, SC where you live. That being the case, you woud be considered to be traveling away from your tax home, and can deduct the expenses involved for your travel.

This is only allowed when your job is classified as temporary and expected to last less than one year. If at any point you are told that the job will be extended and last beyond one year, you would no longer be allowed to deduct these expenses.

Again, I apologize for not reading that correctly in your original post, because the fact that this is a temporary job makes a difference in the fact that you can deduct your expenses.

Thank youCustomer
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