SPOUSE A |
SPOUSE B |
WHAT HAPPENS |
|
Both contracts with same company |
Takes provided apartment |
Takes subsidy |
Subsidy is taxable |
Both contracts with same company |
Takes subsidy |
Takes subsidy |
Neither one taxable |
Contract with different companies |
Takes subsidy |
Takes subsidy |
Neither one taxable |
Pros:
--The average traveler gets 20-50K of tax free benefits a year, not paying taxes on that income easily adds up to 6-10K in savings. --You have a place to return home to between assignments. --If you keep a PRN or agency job, you will have the option to return home while looking for the next assignment.Cons:
--Costs you money to maintain a residence, it could exceed the tax savings. --Requires you to return home on a regular basis. --Requires long distance maintenance of a dwelling. --Requires long distance dealing with local DMV's. --Requires detailed record keeping and less spontaneity. The next assignment or vacation has to coordinate with a trip home. --Freedom to take an assignment without the hassles of moving a residence. --If you own a home, you are unable to rent it out completely, but must keep a portion for personal use.Advantages to being an Itinerant Worker
If you do not have a tax home, the IRS considers you an âitinerantâ and your tax home is wherever you are working. In other words âwherever you go, there you are.â Money is not everything in life and living around a tax deduction can defeat the advantages of traveling: Freedom, Professional Experience, and Exploration. However, freedom comes with a price and you must do the math to see if that price is worth it. In the end, you may find that after you subtract the costs of 1) maintaining your tax home, 2) the costs of traveling home every so often, and 3) losing pay for the weeks you take off to spend at home, your tax savings may have dwindles down to $3K-5K. You may find yourself deciding that it is a small price to pay the rare opportunity to travel and experience new areas. 1) No need to return home between assignments or coordinate a lengthy stay at home. 2) No rents to pay, house to worry about. 3) May rent your house out if you have one. 4) Can freely go to new assignments without the burden of returning home. 5) If you like it, you can stay as long as you want. Things to keep in mind if you choose to be an Itinerant Worker: 1) Make sure your travel company understands that you âdo not have a tax homeâ and are an âitinerant workerâ. Some recruiters and companies are so determined to save on payroll taxes that they will encourage you to break the law and misrepresent your tax home information. â Let us know if that happens. We may have some political clout in that area. - -Sometimes we feel like the JACHO of Tax! 2) You will hear all sorts of criticism from fellow travelers and plenty of âschemesâ that they use to fake a tax home. Many will brag about the fact that they have never been caught. Ignore them! 3) A tax home and a permanent residence are separate items. Continue to keep your driverâs license, registration, bank accounts, insurance and mail in one place. You may be able to find a place to move all of your legal ties to take advantage of lower fees. 4) Enjoy your life.We love emails. Please send us any questions and if weâre able to answer them via email we will, and if not, weâll let you know if you need to schedule a tax home or a preparer consult.
Please note: Your inquiry is private. We do NOT share your information, directly solicit, message or âfriendâ you through social media (unless initiated/requested by you).
We are unable to answer questions related to the use of tax software programs.
If you are a current client with questions about contracts, withholding forms, or information regarding a new state you are heading to, feel free to call us! we are here to help. - If you are calling to talk about establishing or maintaining a tax home, you may schedule a tax home consult here.Remember that tax home issues can create a major tax liability if not handled correctly.
Open: Monday to Friday â 8:30 a.m. to 4:30 p.m. EST
(Please note: On Fridays our phones switch over to voicemail at noon, in order for us to prepare for the upcoming week.
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Email: documents@traveltax.com
Mail: 46 St. Mark Rd., Taylors, SC 29687
Fax: 877.872.8829
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