Traveler Frequently Asked Questions
Please feel free to review FAQs below or check out our blog for different traveler related topics.
A permanent residence/address is where you maintain your legal ties. Your driver’s license, car registration, voter’s registration, etc., are your legal ties to an area.
A tax home is your regular place of income. However, if you are a traveler who maintains your tax home with duplicated expenses, your permanent residence should be consistent with your tax home location.
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”.
If you are a traveler receiving tax free stipends, the answer is yes! You still need to keep your documentation for your tax home to justify your per diems! In an audit, no documentation could mean a tax liability, so keep those records!
These are maximum daily rates that can be given to an employee without an exchange of receipts. They cover lodging and meals for days an employee is away from home on the business of the employer (also called CONUS and OCONUS rates).
Sorry, it does not exist. Nope! Nada! No basis in IRS code. The “50-mile rule” is an internal company guideline for their own policies or a facility rule for premium pay. They are not based on IRS guidelines. Just because you sleep away from home, does not mean that an assignment 30 miles away qualifies you. It still has to be farther than a normal commute for a local. Maybe 90 min or more?
The IRS can be notoriously vague with their terms. As a result, we have done our best to develop a few concrete suggestions for travelers.
- Spend AROUND 30 days a year at home.
- Do not stay in any one area for more than 12 out of 24 months.
- Do not return to any one area a third year in a row.
- Remember that there are 50 states out there! Go somewhere else!
Understandably, being audited is a significant fear for travelers. While it is true that a traveler has a higher chance of an audit, that is no reason to stay in a boring job!
If you have a solid tax home and keep good paperwork, you should not wind up with any financial damage. Just hassle. If you use TravelTax, there is no charge for audit defense for any return we prepare and file.
As a company, we suggest that the goal is to go to your tax home 30 days a year or 60 days every 2 years. These 30 days do not have to be consecutive. Otherwise you would be considered as having abandoned your tax home.
Keep your records for a minimum of 7 years!
One item many travelers fail to keep is contracts. Every traveler needs to keep copies of their travel contracts! In case of an audit, it is their only proof that they really had a temporary assignment and get to keep all of those per diems as tax-free. You may also send a copy of your travel contracts to us throughout the year or when you file your taxes with us, via our secure Client Portal for additional record keeping.
The website for the GSA rates is a site that allows you to look up all current rates in every city. Occasionally you may run into a company that uses the High-Low Substantiation rates. These are GSA rates that are averaged into two categories. They are not published on the GSA site but issued as a PDF annually. If you Google the term, you will be able to get the current version.
States with no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Also, Washington, D.C. is tax-free for a non-resident and the US Virgin Islands only has a federal tax.
Highest income tax states: These are harder to evaluate, as what is taxed can flip-flop based on the different brackets and rates. But according to our own experience with travelers the top ten usually are: California, Montana, Maryland, Maine, Minnesota, Utah, Oregon, Wisconsin, New York, North Carolina, and Hawaii. (No particular order)
A tax home consult is NOT to prepare your taxes!
The tax home consult was developed to meet the needs of travelers who want to make sure they are maintaining their tax home. Remember that tax home issues can create a major tax liability if not handled correctly.
US tax home clients: After paying fee below schedule your tax home consult via online scheduler
International/Canadian tax home clients: After paying the fee below, please call us to schedule your tax home consult and do not schedule online. This is to ensure your appointment is scheduled with the correct person.
Please be aware:
- If no payment has been made prior to tax home consult appointment, your appointment will be canceled.
- If you make a payment under a different name, please let us know to avoid your tax home consult being canceled.
- If you must cancel your tax home consult appointment, please do so with a 48-hour notice and let us know so we can refund you.
- If your tax home consult is not canceled 48 hours prior to appointment, the tax home consult fee is nonrefundable.
- We appreciate every one of you and will do our best to accommodate you!
- The tax home consultant will call you!