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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
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Experience:  Over 20 Years experience
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Hey Lev,I am being moved from California to Arizona for

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Hey Lev,

I am being moved from California to Arizona for 11 months by my company to work on a project. The company is offering to pay my rent and utilties for my temporary housing in Arizona while I am there. I am letting the lease on my current apartment in California expire while I am gone and will rent a new place when I come back. Three questions about this.

Am I going to have to pay taxes on what my employer spends on my living expenses in Arizona?

Does California still count as my tax home if I do not have a residence there while I am gone but intend on returning?

What state would I pay income tax in 2014 (I will be working in AZ ten months of 2014)?


Randalltax :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.Your selected expert is currently unavailable.

Randalltax :

If you are working away from your home for a job that is likely to last less than 12 months, many of your expenses are considered "travel" expenses.

Randalltax :

If the company pays for your lodging for this type of trip, then the company provides this to you at no cost or taxable income to you. The company may take this as a tax deduction. If, for some reason, the company does add this to your income (which likely will NOT happen), you are entitled to a tax deduction as an unreimbursed business expense. The key is that the work MUST last less than a year.

Randalltax :

As a permanent AZ resident, you do not change this status for the purpose of taxation. You are liable to AZ for your income earned worldwide.

Randalltax :

When you are working IN Calilfornia, you will be liable to that state for tax on all income earned while in CA. You will file a CA NON-resident tax return or a CA Part-Year Resident return, depending on specific circumstances.

Randalltax :

In order to avoid double state taxation, AZ will allow you a credit against your AZ tax for tax actually paid to CA. So, while the income is calculated in both states, you only pay the state tax once on that income.

Randalltax :

Assuming your company does not reimburse you for your meals while in CA, you may be allowed to deduct the cost of your meals (or a per-day standard rate) while you are there, again, as long as the job is less than a year. The actual deduction allowed for meals is 50% of the actual calculated amount, so if you calculated $4000 for the whole year, only $2000 is deductible.

Randalltax :

Better than nothing, I guess!


Thanks Randall

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