Question about job expenses and tax credits?

Question

My fiance (we'll be married before Dec 31st) was sent by his union hall to a job in Tennessee (we live in Alabama) which he has worked at since the middle of June. He rents a hotel room in the area and can't come back to AL often b/c it's a 10 hour drive. He has food expenses and living expenses in both states but is he allowed deduct the money he spent on hotel, gas, food or anything else? We have itemized receipts from the hotel & a lot of receipts for various groceries/restaurants  & much more. Since he has been in TN so long does that mean he is now a resident of the state? What difference does this make on taxes? Are we even entitled to claim any of the expenses? Please give any advice you can and i will provide any additional info that I can. I'm a college student and know how to do taxes but am not familiar with all laws yet. Thank you

Anonymous · Accepted Answer

This is actually a tricky issue.

Is this the FIRST time he's worked in TN?
Is the contract one year or less?
Did he keep his apartment in Alabama and continue to pay rent?  (Or have a house and continue to pay the mortgage?)

Let's say that you can show he is duplicating expenses and eligible to deduct out of town expenses.  You say you have the hotel receipts and can make a list of the dates he was out of town (a flat per diem is allowed for food), but might not have the required mileage records.

If he's an employee with a W-2:
On the 1040, schedule A, 2% section, you you can fill out form 2106.  The food is cut in half and then the total is reduced by 2% of the AGI on the schedule A.  If the total for schedule A is more than the standard deduction ($11,600 for married couples), you can itemize and claim the larger total on your tax return.  If this reduces the total income and income tax, it can make a difference on a refund.  Fortunately, TN doesn't have an income tax for wages, so he doesn't have to file there.

If he didn't maintain 2 homes, then the IRS will allow nothing.  With no home (and he can't claim a bedroom or sofa in yours), the IRS will say his tax home moved and he gets nothing.

If he regularly works in TN, his tax home moves.
If any contract (and that is cumulative for TN) is longer than a year, his tax home moved.

If he has a ton of income and ton of expenses, this can trigger AMT as the 2% section is added back to determine AMT.

If he's self-employed (aka gets 1099-Misc forms):
If his tax home doesn't move, the expenses go on schedule C.

See IRS pub 463.  The publication does not stress enough the loss of tax home.  The US tax court regularly hears cases of people appealing audits for disallowed travel expenses and they usually lose.

Edit,if the job extends past 1 year, the ability to deduct the expenses stop.  This is true even if it's another employer if they are in TN.

? · Answer

2

tro · Answer

yes he is allowed to claim the meals, lodging and misc expenses of the work away from home
this happens a lot with union jobs like welders, pipe fitters etc
and it is anticipated this is a job of less than a year
go to www.irs.gov and do some searching for the subjects you have questions about, you will find the answers you need there

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Question about job expenses and tax credits?

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