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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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My company is paying me a living allowance as my work takes

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My company is paying me a living allowance as my work takes me away from home. I am told I have to pay tax on this allowance. Is there any way to claim it back as a living expense?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

Customer:

Fine thanks

MyVirtualCPA :

That's good.

MyVirtualCPA :

How long is the assignment where your work is taking you away from home?

MyVirtualCPA :

This is not travel, this is living correct?

Customer:

I have been in Alaska for 18 months to date. Likely another 2 years. Company relocated me from Alberta, Canada. I am paid a monthly living allowance as well as a travel allowance as I am expected to take home leave 4 times a year.

MyVirtualCPA :

Okay then this is not a "temporary assignment" which means that it would last less than one year

MyVirtualCPA :

So, you cannot deduct your living expenses

MyVirtualCPA :

I'm truly sorry.

MyVirtualCPA :

Please don't shoot the messenger!

Customer:

Ha! Ha! I won't shoot you! Just wanted a 2nd opinion as I have been told the same thing by my accountant here in Anchorage. Thanks!

MyVirtualCPA :

You're welcome

MyVirtualCPA :

Please rate my response as excellent so that I may receive credit for assisting you today

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