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A wonderful quote from a tax court case

Suffering has never been made a prerequisite to deductibility
Jackson v. Commissioner, 59 T.C. 312, 317 (1973)
cartoon-exhausted-business-man-carrying-the-burden-of-a-heavy-boulder-load-by-ron-leishman-55613

August 2018

  • Congress Will Try Again to Regulate Tax Preparers

    As Libertarian as I am, this is something I am for. I put thousands entire continuing education yet have to compete against some who are just looking for high volume inflated refunds. Congress Takes On Tax Preparer Legislation

    Read More

May 2018

  • Is the Restoration of Job Expense Deductions Possible?

    A bill being introduced to restore job expenses for employees and even better, as an above the line deduction. See the link: New Bill for Job Expense Deductions The only problem with this is that all tax bills are required to start in the House, specifically in the Ways and Means committee. So ……. we will see

    Read More

April 2018

  • First Wave of State Tax Return Changes

    The Federal tax overhaul changed the landscape for many state returns as they pull for items on the federal return. NY will now allow State and Local Tax (SALT) deductions in full on the NY return even if the taxpayer takes the standard deduction on the Federal return In addition, Alimony and Moving expenses will continue to be allowed at the state level    

    Read More

February 2018

  • Quote from Canadian Tax Foundation Newsletter (look what US tax reform has done)

    Time is required to properly digest the complex US proposals (after all, the US Treasury itself has not yet released regulations), but it will be very important for our government to acknowledge the proposals’ impact on Canada and to indicate a path forward. Canada has many advantages. Perhaps we have relied too much, for too many years, on our competitive tax rate relative to the United States’. Now that we no longer enjoy the tax rate advantage, a new course needs to be plotted.

    Read More
  • Class Action OT Suits in Healthcare Staffing and Trucking – What to Know

    Below is linked a joint statement from the parties in one of the OT suits circulating in the healthcare staffing industry. It contains both side’s opinion as to what disclosures should be required for participants in the class action. Note the issue raised by the defendant that the participants in class action suits COULD  be subject to more tax than they would benefit should the plaintiffs prevail. Specifically, if the per diems are allowed to be included in the OT base, the per diems could be taxable should the IRS seek to pursue that determination. Those “back taxes” would potentially […]

    Read More
  • ALERT!!!!!! Retroactive Tax Changes for 2017!!!!!!!!!!!!!

    2-9-18 Last night when Congress averted the government shutdown, they passed a tax extenders package that is retroactive to the 2017 tax year. Among the most common deductions for our clients that were reinstated: Mortgage Insurance Premiums Tuition and Fees Deduction Residential Energy Credit Fuel Cell Car Credit There are plenty of others that are less common. We have already pulled returns that have been filed and will alert clients for amendments and those still in process have been flagged! Fun Fun!

    Read More

January 2018

  • The State Tax Tsunami

    While  tax reform has changed the Federal returns, state returns generally start with some number from the Federal return. This is changing the meaning of “taxable income” at the state level. Here is a good WSJ article on this State Tax Changes – WSJ

    Read More
  • On Demand Webinar – Travelers and Tax Reform

    Here is a link to the webinar we did with Nomadicare discussing tax reform and the changes ahead for travelers in all industries Travelers and Tax Reform

    Read More
  • For Our Travel Nurse Clients – Good Article About New RN Compact

    The Impact of the Compact

    Read More
  • The Traveler / Military Spouse Rules

    The PDF has an overview of the tax home rules for military spouse/travelers The Traveler as Military spouse

    Read More
  • January 2018 and Tax Reform

    See attached newsletter TravelTax News January 2018

    Read More
  • The Trump Tax Tsunami

    As I mentioned before, the US tax cuts are going to create a wave of similar cuts around the globe. Here is one of the first in Nova Scotia. Nova Scotia Tax Cuts

    Read More

November 2017

  • Our Latest Article on Staffing Agency Reimbursement Polices

    Tax Reform Proposals and Staffing Agency Reimbursement Policies

    Read More
  • How Tax Reform Will Affect Travelers

    We have loaded a review of the proposed tax reform Bill and its effect on Travelers. There is a short version and a more detailed version found on our website: Click here to go to the report  Tax Reform Report

    Read More
  • Impressions of the Tax Reform Bill (1)

    The tax reform bill (linked below) was released this week and it is really a zinger. An effort to simplify taxes for the average person is truly evident but it comes at a cost for many families and creates a number of incentives for cheating the system. The bill eliminates nearly every foundational tax principal and expectation that our nation has operated under for decades. Gone are medical deductions (grandma’s nursing home / assisted living costs), state / local income tax deductions (a double tax event), student loan interest (school is bad for you), employment expenses (stick it to the […]

    Read More

September 2017

  • When it Comes to Duplicated Expenses, its All About the Home / Dwelling

    A lot of Travelers mistakenly think that paying rent is a magic carpet ride to a tax home. This is not the case. You must be maintaining a dwelling that you use for your own lodging. Paying rent and maintaining a home you pay rent for are different things. That means the following types of arrangements that some speak of do not rise to the level of a “maintaining a dwelling”: I give Mom some money I help out with expenses I pay a utility bill I help out when at home I help my aunt out by sending her […]

    Read More
  • Tax Court Rules on Meals for Sports Teams

    This is a cool case regarding the deduction of meals during games by the team, specifically the Boston Bruins. It has wide impact for sports teams as well as businesses. In summary, if the employer provides meals for its convenience and on the employers site, it is deductible in full.   Boston Bruins Case

    Read More

July 2017

  • Trips Home During Assignments or Between Extensions

    We are often asked about whether trips home are deductible during assignments or between extensions. A trip home during an assignment is considered a personal expense by the IRS unless there is a business purpose for the journey. If one is returning home for work then most all of the trip is deductible, but if the return home is for personal reasons, then the deductions are limited to what would be deducted if the traveler stayed at the assignment area. For example, if one has an apartment at the assignment area, the lodging costs do not change however, the employee […]

    Read More

June 2017

  • Cross Country Buys Advantage RN

    Cross Country Buys Advantage RN

    Read More

January 2017

  • The Oregon trail leads to a cliff –

    Two recent tax related cases were decided and happened to be printed on the same newswire. One a Federal case that was on appeal and the other an Oregon state case. Both involved taxpayers claiming expenses for the use of an RV for business related activity while on the road. The Federal case made the IRS happy, the Oregon case …… well …… the OR state attorneys missed the boat or forgot to ask the IRS. A little background is necessary before appreciating this. First, the IRS, following tax court precedent, does not allow a taxpayer to depreciate an RV […]

    Read More
  • 2017 TravelTax Newsletter

    Our 2017 Winter Newsletter can be found in the Newsletter section of our blog! Enjoy!

    Read More
  • State Tax Residency Cases-Indiana Style

    The title is a bit misleading and purposeful as this really doesn’t add to the body of knowledge for state tax residency rules. However, it reinforces the basis by which most states determine tax residency. State tax residency is important as the state where an individual keeps their legal domicile is the state that has a right to tax global/worldwide income earned by the taxpayer. The more common term to describe this relationship is a Permanent Residence. This is different from the concept of a Tax Home that determines from where an individual has travel related expenses that are either deductible […]

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December 2016

  • We Are Moving!!!

    We are moving our offices to the other side of our small town during the next month before tax season kicks in. More to come- signed the papers today! 1010-riverside-blvd-google-maps

    Read More
  • Welcome to our tropical paradise!

    Gotta love our weather here in TravelTax land 🙂 An yes, that’s Fahrenheit

    Read More
  • Yet Again, Another State Residency Case

    Since we specialize in multi-state client situations, it is no surprise that we are a bit anal about residency issues. On the heels of the UT case we posted recently comes one from Arkansas that was ruled for the taxpayers despite the lingering legal ties to Arkansas. The case involves a couple that moved from Arkansas (a state with an income tax) to Texas (a state without an income tax) in the later part of 2012. Within one year they returned to Arkansas due to pregnancy related complications requiring family support which they did not have in Texas. Arkansas Department […]

    Read More
  • Standard Mileage Rates for 2017 Released

    Starting January 1, 2017 the new standard mileage rates are as follows 53.5 cents per mile for business miles driven, down from 54 cents 17 cents per mile driven for medical or moving purposes, down from 19 cents 14 cents per mile driven in service of charitable organizations

    Read More
  • Another State Residency Case

    A recent UT tax case provides another example of how states determine residency and is of special interest to our clients who earn foreign income. The case involves an individual that worked in a foreign country during 2012 and 2013 but still kept a drivers license, car registration and his spouse/kids  in UT. The case is instructive as it outlines the items that are evidence of continuing domicile.  Below is an excerpt from the UT tax code. Notice the reference to a drivers license (i), vehicle registration (vi), and address on tax return (ix) as proof of residency for tax […]

    Read More

November 2016

  • Indiana and California drop their "reverse Credit" arrangement starting with the 2017 tax year

    When one works in more than one state, both the home state and the work state will tax the income. The home state will then credit the taxpayer for the taxes paid to the work state on that income to avoid double tax on the same income. Some border states have a reciprocity agreement where income earned in the border state is considered income earned in the home state so that only the home state will tax that income For residents of AZ, CA, OR, IN and VA, when one lives in one of the listed states and works in […]

    Read More

September 2016

  • State Taxes for Strike Travelers Might Get Easier

    On September 21, 2016, the U.S. House passed the Mobile Workforce State Income Tax Simplification Act of 2015, which would limit states’ authority to impose personal income taxes on nonresident employees for work performed in other states. If enacted, the bill would preclude an employee’s income earned in more than one state from being taxed in any state other than the employee’s state of residence and the state where the employee is present and performing employment duties for more than 30 days in the calendar year. The bill would also exempt employers from withholding and information reporting requirements for employees […]

    Read More
  • 2016 Summer Newsletter

    Follow this link for our summer newsletter Summer 2016 TravelTax Newsletter

    Read More
  • CRA Requiring Transcripts of US Returns for Foreign Tax Credit

    CRA has decided that all claims for foreign tax credits should come as official notices vs copies of tax returns from other countries. Effective immediately, clients will require an official Notice of Assessment from a foreign country to claim FTC. For US credits, a copy of the 1040, state return and W2s was was. One problem – the IRS and state tax agencies do not issue Notices of Assessments and some transcripts are not available till the summer. We will see how this plays out. CRA is allowing proof of payment or receipt of refund along with a copy of the […]

    Read More

August 2016

  • New Rules on IRA Rollovers that Fail the 60 Day Rule

    The IRS is simplifying the procedure for getting a waiver of the 60 day rollover rule in cases where there was a problem with the process or an unexpected event. Often when rolling over amounts into another IRA, a taxpayer will receive a check which then must be sent to the new investment firm. Sometimes that process breaks down due to mail delays, unexpected events or other reasons. The new procedure is linked below New rules for 60 day rollover limit

    Read More
  • Good advice about scammers

    Links to the TravelTax FB site https://www.facebook.com/TravelTax-111093382278561/

    Read More
  • Be Careful with Tuition Credit Carryforwards

    Tuition credits can be needlessly wasted when Canadian tax residents move to the US to work or return to Canada. Planning ahead is very important as the article below states. Tuition Credit Carryforwards When Departing or on RE-entry

    Read More
  • Per Diem Rates for 2017 Released

    The new per diem rates that take effect on Oct 1 2016 have been released. Per Diem Rates for 2017

    Read More

April 2016

  • A wonderful quote from a tax court case

    Suffering has never been made a prerequisite to deductibility Jackson v. Commissioner, 59 T.C. 312, 317 (1973)

    Read More
  • Trends in Nursing Licensure

    An interesting article for our clients who are Registered Nurses A Battle Brews Over Nurse Licensing in the Digital Age – WSJ

    Read More

March 2016

  • I Do Not Want a Reimbursement!! Ill Deduct It On My Return Instead!!

      Want to decline tax free reimbursements for travel expenses and deduct them on your return instead? You cannot claim the deduction if you were offered or had access to an employer reimbursement.. Linked below is an old court case that is still cited in current cases involving an executive that refused to submit his expense reports to his company for reimbursement and then claimed the expenses on his return. The court denied his deduction because “he {was} attempting to convert the employer’s right to a deduction into a right of his own.” 60-1 USTC 9135 Marvin A Heidt and Beatrice Heidt […]

    Read More
  • Failure to File Penalties Will Increase in 2017

    The Trade Facilitation and Trade Enforcement Act of 2015 (HR 644), which was signed into law by President Obama on February 24, increases the penalty for failure to file a return and puts a permanent moratorium on state and local taxation of Internet access. For taxpayers who fail to file their returns more than 60 days after the due date or extended due date, the Trade Act increases the minimum penalty from the lesser of $135 or 100 percent of the unpaid tax, to the lesser of $205 or 100 percent of the unpaid tax. The $205 penalty amount is […]

    Read More

February 2016

  • What is a Tax Home? Are you a Tax Turtle?

    I have spent the last 20 years explaining the concept of a tax home to clients and those that claim to know more than the IRS. This is a very instructive and candid Tax Court case that uses more common vocabulary so non-attorney readers can understand. A good description of a tax home. The case also focuses on a common practice among mobile professionals of using a friends or relatives home as a tax residence and what should be expected. Also, the case introduces another term to the tax home vocabulary: it defines an itinerant – someone who does not have […]

    Read More
  • The IRS Fails its Own Reimbursement Policy

    Recently, the Treasury Inspector General for Tax Administration (TIGTA) reviewed the IRS due diligence efforts in tracking employees potentially engaged in temporary assignments greater than a year and whether their travel reimbursements were treated as taxable income in those situations. They are not doing the best job and partly due to confusion about the rules among the supervisors. They did however, find that the IRS had established adequate guidance on when travel reimbursements are taxable – in other words, there wasn’t an excuse 🙂 The full report can be found here TIGTA Report

    Read More
  • I Can Deduct Cat Food?

    Reading Tax Court cases can be fun sometimes. A 2001 decision allowed the owners of a scrap yard to deduct cat food. The property was prone to snakes and rats so the owners encouraged wild cats to visit their their property by leaving cat food scatted throughout the property. The court allowed the deduction, or as the bottom of page 18 of the decision reads, the IRS conceded the deduction and declined to argue against it 🙂 Who could argue with such a harmless, fuzzy critter? Cat Food Allowed as a Deduction in Tax Court Case    

    Read More
  • February 2016 Newsletter

    February 2016 TravelTax News

    Read More
  • Watch for Phishing Scams!

    There are plenty of people trying to pretend to be IRS agents and now those in the act are sending text messages Remember that the IRS NEVER uses email or text except in RARE cases when there is a long term relationship with a single individual who works for the Service. Scams to be Aware of

    Read More
  • Blizzard of February 2016

    Take a look out our offices at the blizzard

    Read More
  • An IRS Phishing Scam Artist Caught

    Click here for story

    Read More

January 2016

  • The Wonder of our Tax Code

    The 1040EZ form is the simplest Federal Tax return to complete. The actual form is one page with a second page for worksheets 1040EZ Form Want the instructions for this one page form? Sure …… A modest 44 pages Instructions for the “Simple” 1040EZ Form And we wonder why taxes are hard?

    Read More
  • I Got a Per Diem Raise!!!

    Often in the temporary staffing industries, we hear of travelers getting a raise. Not that kind of a raise. Not in wages, but in per diems. There are many ways an agency can inadvertently treat per diems as wages and this is one of them. Say a traveler has completed a 13 week assignment and decides to extend. If the bill rate is the same, there are some additional funds that otherwise would have gone to start up costs if this was the first assignment for the traveler at the facility/outlet. With this extra cash, the agency can give the traveler […]

    Read More

December 2015

  • New Mileage Rates for 2016

    IRS Notice 2016-01 The new standard mileage rates for 2016 are 54 cents a mile for business 14 per mile for charity 19 per mile for moving The depreciation factor is 24 cents per mile which is included in the 54 cents a mile ***Note that these are reduced from previous years  

    Read More

November 2015

  • Financial Literacy of Millennials

    I am not attempting to single our one generation and some of this data is just be a product of age/maturity, but a recent study showed that in the US, the “financial literacy” of those entering the job market is less than their prior generation peers. Significantly different from that of other nations whose younger citizens are often MORE financially literate than their older peers. The study suggests that our educational system is lagging in financial instruction.

    Read More

May 2015

  • ALERT for Maryland and Indiana Residents

    ALERT FOR MD and IN RESIDENTS Today, SCOTUS released its opinion in Wynne v MD comptroller and ruled that the MD income tax schematic is a violation of the Commerce Clause and unconstitutional. This will probably affect Indiana as they have the same system in place. For primers, MD imposes a state tax and a county piggyback tax collected by the MD Comptroller. If an individual works out of state, the credits for taxes paid to other jurisdictions only apply to the state portion, not the county portion. This is not like PA and OH where they have their own local […]

    Read More

April 2015

  • Identity Theft

    The number one problem facing tax filing is identity theft. I linked a good article on this at our FB page https://www.facebook.com/pages/TravelTax/111093382278561?ref=hl

    Read More

February 2015

  • Student Loans and Tuition Tax Credits/Deductions

    One thing I have never understood is why some clients believe they cannot claim tuition on their tax return if they receive the funds from student loans. At the same time, they will take out a loan to buy a car and be very forthright about claiming the sales tax. I guess it’s a misunderstanding of how things are paid.  When someone loans you money,  your obligation to repay that loan is instantaneous  regardless of the fact that you negotiate  a payment frequency and an end point  for those payments.  I guess some  would surmise that they could not  deduct the tuition immediately,  but […]

    Read More
  • Digress to a Rant #1

    Digress to a Rant #1 It amazes me that some people like working as an independent contractor because “they don’t take taxes out” ……… That euphoria ends when I have to tell them how much they owe which commences the obligatory rage that the contractor screwed, tricked {Insert your own expression of surprise} them into doing it that way.

    Read More
  • Basic Tax Math – Part 7 – State Taxation, Domicile and Your License

    The place most travelers and tax practitioners stumble when dealing with multistate taxation, is separating the concepts of permanent residence / domicile and a tax residence. The two are entirely different yet frequently referred to synonymously because they are often at the same place. A permanent residence is a legal concept, often referred to as one’s domicile. If you want to know someone’s permanent residence, just ask to see their driver’s license, car registration and voter registration. Each of these connections tie an individual to a state, and more particularly, a community within the state. The permanent residence, domiciliary state has the right to tax an individual’s global […]

    Read More
  • Basic Tax Math – Part 6 – State Taxation

    While dealing with federal taxes is hard enough, anyone who works in more than one state has a greater challenge juggling all the different state tax returns. How are taxes computed when you work in more than one state?  Well on paper,  it’s pretty simple, however, it is a great source of confusion for most. The rules run like this : your home state will tax your global income  regardless of where you earned it and regardless of whether you earned any income in your home state. It doesn’t even matter if you were gone for an entire year and never set foot in your home state- […]

    Read More
  • Basic Tax Math – Part 5 – How Withholding is Calculated

    As mentioned in Part 4, the amount withheld for income taxes is based on the data you provide on Form W4 and the state equivalent – if any. How is the actual amount determined from this data? The withholding “formulas” start with the rate of earnings for each individual paycheck extrapolated to an annual amount. Assume you are paid bi-weekly, which is 26 checks per year. If you make $2K in the biweekly pay period, the withholding formula starts with the assumption that you make $52,000 a year. Based on $52K a year, the formula then calculates the amount of tax […]

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  • Basic Tax Math – Part 4 – Why Do They Tax $X Out of My Check?

    The short answer is ………. you told them too! Seriously Now don’t get the bright idea that you can tell them to withhold nothing (called declaring exempt) and wait till the end of the year and pay it at once either. That amount they take out – the “withholding” that we discussed in the earlier posts – is an estimated tax payment based on your income. Remember, it is not the TAX, it is your ESTIMATED payment. You cannot change withholding for SS and Medicare as that is a flat rate and technically not an income tax – it is an […]

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  • Basic Tax Math – Part 3 – What is "Withholding"

    When you receive a paycheck, you will see amounts “withheld” from your wages for Federal and State income tax and for Social Security / Medicare. Sometimes these are coded with acronyms like FIT, Fed W/H, S W/H, FICA, Med etc. Regardless of the label, it is an amount withheld from your wages for  estimated tax payments. If it was not withheld, you would have to write a check to the IRS, Social Security and the State Tax Commission with each paycheck. Withholding makes it simple but is removes the pain of having to actually write the check and appreciate how painful […]

    Read More
  • Basic Tax Math – Part 2 – Marketing Big Refunds

    No – I don’t do this for clients Nor do I make convincing commercials like this I once drove by a tax preparation office in the suburbs of a large city giving away free leather jackets to those that walked in with their tax documents. The entire mass of humanity in their office were donned in brown leather jackets ….. They were all promised BIG refunds for wearing the uniform.. The first audit I ever represented for a client was one where the taxpayer was audited to produce evidence against a tax preparer that was under investigation for fraud. The CID (IRS Criminal Investigation Division) […]

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  • Basic Tax Math – Part 1

    Its too complicated!

    Read More

January 2015

  • For Those Of You Too Afraid To Ask…. If The 50 Mile Myth is Nonsense, What Is The Rule?

    Okay- Don’t be afraid to ask questions ….. Since the first post on this topic, I have heard from a few people who want to know the accepted rule but don’t want to ask publically. Ok, that’s fine 🙂 The benchmark for deductible lodging expenses –  OR better, in tax jargon as it applies to per diems for lodging –  the benchmark for determining if the housing/lodging reimbursement is excluded from your reported wages is …… guess what? ……….. an overnight stay where you have to pay for lodging!!! Pretty logical huh? Our tax code does make sense at times. Why should you […]

    Read More
  • Welcome to the TravelTax Blog

    While you may have read my articles on various websites, or my posts on FB pages and other forums, from time to time I like to wax eloquent without fitting my thoughts into someone else’s prescripted format. Some of the entries may be long and a few will simply be rants. Whatever the case, you are guaranteed to find some nugget of tax knowledge fitting for your situation with a dash of sarcasm or philosophy. Since our clients are primarily engaged in multistate assignments, cross border employment or posted abroad, they share a common connection of working on the road, exploring the world or just planting […]

    Read More
  • 50 Mile Rule Nonsense

    I have been preparing tax returns for travelers for almost 20 years and one thing that never seems to die is the urban myth of a  50 Mile Rule that recruiters and travelers talk about with religious conviction. The tale goes like this: as long as you drive over 50 miles to get to your assignment, you can get tax free housing allowances. You can even use someone else’s address on your tax forms to get the money, since all the IRS cares about is your permanent residence address. Really? Wow. If it is really this easy, everyone should live 51 miles a […]

    Read More

Digress to a Rant #1
It amazes me that some people like working as an independent contractor because “they don’t take taxes out” ……… That euphoria ends when I have to tell them how much they owe which commences the obligatory rage that the contractor screwed, tricked {Insert your own expression of surprise} them into doing it that way.

August 2018

  • Congress Will Try Again to Regulate Tax Preparers

    As Libertarian as I am, this is something I am for. I put thousands entire continuing education yet have to compete against some who are just looking for high volume inflated refunds. Congress Takes On Tax Preparer Legislation

    Read More

May 2018

  • Is the Restoration of Job Expense Deductions Possible?

    A bill being introduced to restore job expenses for employees and even better, as an above the line deduction. See the link: New Bill for Job Expense Deductions The only problem with this is that all tax bills are required to start in the House, specifically in the Ways and Means committee. So ……. we will see

    Read More

April 2018

  • First Wave of State Tax Return Changes

    The Federal tax overhaul changed the landscape for many state returns as they pull for items on the federal return. NY will now allow State and Local Tax (SALT) deductions in full on the NY return even if the taxpayer takes the standard deduction on the Federal return In addition, Alimony and Moving expenses will continue to be allowed at the state level    

    Read More

February 2018

  • Quote from Canadian Tax Foundation Newsletter (look what US tax reform has done)

    Time is required to properly digest the complex US proposals (after all, the US Treasury itself has not yet released regulations), but it will be very important for our government to acknowledge the proposals’ impact on Canada and to indicate a path forward. Canada has many advantages. Perhaps we have relied too much, for too many years, on our competitive tax rate relative to the United States’. Now that we no longer enjoy the tax rate advantage, a new course needs to be plotted.

    Read More
  • Class Action OT Suits in Healthcare Staffing and Trucking – What to Know

    Below is linked a joint statement from the parties in one of the OT suits circulating in the healthcare staffing industry. It contains both side’s opinion as to what disclosures should be required for participants in the class action. Note the issue raised by the defendant that the participants in class action suits COULD  be subject to more tax than they would benefit should the plaintiffs prevail. Specifically, if the per diems are allowed to be included in the OT base, the per diems could be taxable should the IRS seek to pursue that determination. Those “back taxes” would potentially […]

    Read More
  • ALERT!!!!!! Retroactive Tax Changes for 2017!!!!!!!!!!!!!

    2-9-18 Last night when Congress averted the government shutdown, they passed a tax extenders package that is retroactive to the 2017 tax year. Among the most common deductions for our clients that were reinstated: Mortgage Insurance Premiums Tuition and Fees Deduction Residential Energy Credit Fuel Cell Car Credit There are plenty of others that are less common. We have already pulled returns that have been filed and will alert clients for amendments and those still in process have been flagged! Fun Fun!

    Read More

January 2018

  • The State Tax Tsunami

    While  tax reform has changed the Federal returns, state returns generally start with some number from the Federal return. This is changing the meaning of “taxable income” at the state level. Here is a good WSJ article on this State Tax Changes – WSJ

    Read More
  • On Demand Webinar – Travelers and Tax Reform

    Here is a link to the webinar we did with Nomadicare discussing tax reform and the changes ahead for travelers in all industries Travelers and Tax Reform

    Read More
  • For Our Travel Nurse Clients – Good Article About New RN Compact

    The Impact of the Compact

    Read More
  • The Traveler / Military Spouse Rules

    The PDF has an overview of the tax home rules for military spouse/travelers The Traveler as Military spouse

    Read More
  • January 2018 and Tax Reform

    See attached newsletter TravelTax News January 2018

    Read More
  • The Trump Tax Tsunami

    As I mentioned before, the US tax cuts are going to create a wave of similar cuts around the globe. Here is one of the first in Nova Scotia. Nova Scotia Tax Cuts

    Read More

November 2017

  • Our Latest Article on Staffing Agency Reimbursement Polices

    Tax Reform Proposals and Staffing Agency Reimbursement Policies

    Read More
  • How Tax Reform Will Affect Travelers

    We have loaded a review of the proposed tax reform Bill and its effect on Travelers. There is a short version and a more detailed version found on our website: Click here to go to the report  Tax Reform Report

    Read More
  • Impressions of the Tax Reform Bill (1)

    The tax reform bill (linked below) was released this week and it is really a zinger. An effort to simplify taxes for the average person is truly evident but it comes at a cost for many families and creates a number of incentives for cheating the system. The bill eliminates nearly every foundational tax principal and expectation that our nation has operated under for decades. Gone are medical deductions (grandma’s nursing home / assisted living costs), state / local income tax deductions (a double tax event), student loan interest (school is bad for you), employment expenses (stick it to the […]

    Read More

September 2017

  • When it Comes to Duplicated Expenses, its All About the Home / Dwelling

    A lot of Travelers mistakenly think that paying rent is a magic carpet ride to a tax home. This is not the case. You must be maintaining a dwelling that you use for your own lodging. Paying rent and maintaining a home you pay rent for are different things. That means the following types of arrangements that some speak of do not rise to the level of a “maintaining a dwelling”: I give Mom some money I help out with expenses I pay a utility bill I help out when at home I help my aunt out by sending her […]

    Read More
  • Tax Court Rules on Meals for Sports Teams

    This is a cool case regarding the deduction of meals during games by the team, specifically the Boston Bruins. It has wide impact for sports teams as well as businesses. In summary, if the employer provides meals for its convenience and on the employers site, it is deductible in full.   Boston Bruins Case

    Read More

July 2017

  • Trips Home During Assignments or Between Extensions

    We are often asked about whether trips home are deductible during assignments or between extensions. A trip home during an assignment is considered a personal expense by the IRS unless there is a business purpose for the journey. If one is returning home for work then most all of the trip is deductible, but if the return home is for personal reasons, then the deductions are limited to what would be deducted if the traveler stayed at the assignment area. For example, if one has an apartment at the assignment area, the lodging costs do not change however, the employee […]

    Read More

June 2017

  • Cross Country Buys Advantage RN

    Cross Country Buys Advantage RN

    Read More

January 2017

  • The Oregon trail leads to a cliff –

    Two recent tax related cases were decided and happened to be printed on the same newswire. One a Federal case that was on appeal and the other an Oregon state case. Both involved taxpayers claiming expenses for the use of an RV for business related activity while on the road. The Federal case made the IRS happy, the Oregon case …… well …… the OR state attorneys missed the boat or forgot to ask the IRS. A little background is necessary before appreciating this. First, the IRS, following tax court precedent, does not allow a taxpayer to depreciate an RV […]

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  • 2017 TravelTax Newsletter

    Our 2017 Winter Newsletter can be found in the Newsletter section of our blog! Enjoy!

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  • State Tax Residency Cases-Indiana Style

    The title is a bit misleading and purposeful as this really doesn’t add to the body of knowledge for state tax residency rules. However, it reinforces the basis by which most states determine tax residency. State tax residency is important as the state where an individual keeps their legal domicile is the state that has a right to tax global/worldwide income earned by the taxpayer. The more common term to describe this relationship is a Permanent Residence. This is different from the concept of a Tax Home that determines from where an individual has travel related expenses that are either deductible […]

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December 2016

  • We Are Moving!!!

    We are moving our offices to the other side of our small town during the next month before tax season kicks in. More to come- signed the papers today! 1010-riverside-blvd-google-maps

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  • Welcome to our tropical paradise!

    Gotta love our weather here in TravelTax land 🙂 An yes, that’s Fahrenheit

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  • Yet Again, Another State Residency Case

    Since we specialize in multi-state client situations, it is no surprise that we are a bit anal about residency issues. On the heels of the UT case we posted recently comes one from Arkansas that was ruled for the taxpayers despite the lingering legal ties to Arkansas. The case involves a couple that moved from Arkansas (a state with an income tax) to Texas (a state without an income tax) in the later part of 2012. Within one year they returned to Arkansas due to pregnancy related complications requiring family support which they did not have in Texas. Arkansas Department […]

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  • Standard Mileage Rates for 2017 Released

    Starting January 1, 2017 the new standard mileage rates are as follows 53.5 cents per mile for business miles driven, down from 54 cents 17 cents per mile driven for medical or moving purposes, down from 19 cents 14 cents per mile driven in service of charitable organizations

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  • Another State Residency Case

    A recent UT tax case provides another example of how states determine residency and is of special interest to our clients who earn foreign income. The case involves an individual that worked in a foreign country during 2012 and 2013 but still kept a drivers license, car registration and his spouse/kids  in UT. The case is instructive as it outlines the items that are evidence of continuing domicile.  Below is an excerpt from the UT tax code. Notice the reference to a drivers license (i), vehicle registration (vi), and address on tax return (ix) as proof of residency for tax […]

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November 2016

  • Indiana and California drop their "reverse Credit" arrangement starting with the 2017 tax year

    When one works in more than one state, both the home state and the work state will tax the income. The home state will then credit the taxpayer for the taxes paid to the work state on that income to avoid double tax on the same income. Some border states have a reciprocity agreement where income earned in the border state is considered income earned in the home state so that only the home state will tax that income For residents of AZ, CA, OR, IN and VA, when one lives in one of the listed states and works in […]

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September 2016

  • State Taxes for Strike Travelers Might Get Easier

    On September 21, 2016, the U.S. House passed the Mobile Workforce State Income Tax Simplification Act of 2015, which would limit states’ authority to impose personal income taxes on nonresident employees for work performed in other states. If enacted, the bill would preclude an employee’s income earned in more than one state from being taxed in any state other than the employee’s state of residence and the state where the employee is present and performing employment duties for more than 30 days in the calendar year. The bill would also exempt employers from withholding and information reporting requirements for employees […]

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  • 2016 Summer Newsletter

    Follow this link for our summer newsletter Summer 2016 TravelTax Newsletter

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  • CRA Requiring Transcripts of US Returns for Foreign Tax Credit

    CRA has decided that all claims for foreign tax credits should come as official notices vs copies of tax returns from other countries. Effective immediately, clients will require an official Notice of Assessment from a foreign country to claim FTC. For US credits, a copy of the 1040, state return and W2s was was. One problem – the IRS and state tax agencies do not issue Notices of Assessments and some transcripts are not available till the summer. We will see how this plays out. CRA is allowing proof of payment or receipt of refund along with a copy of the […]

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August 2016

  • New Rules on IRA Rollovers that Fail the 60 Day Rule

    The IRS is simplifying the procedure for getting a waiver of the 60 day rollover rule in cases where there was a problem with the process or an unexpected event. Often when rolling over amounts into another IRA, a taxpayer will receive a check which then must be sent to the new investment firm. Sometimes that process breaks down due to mail delays, unexpected events or other reasons. The new procedure is linked below New rules for 60 day rollover limit

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  • Good advice about scammers

    Links to the TravelTax FB site https://www.facebook.com/TravelTax-111093382278561/

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  • Be Careful with Tuition Credit Carryforwards

    Tuition credits can be needlessly wasted when Canadian tax residents move to the US to work or return to Canada. Planning ahead is very important as the article below states. Tuition Credit Carryforwards When Departing or on RE-entry

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  • Per Diem Rates for 2017 Released

    The new per diem rates that take effect on Oct 1 2016 have been released. Per Diem Rates for 2017

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April 2016

  • A wonderful quote from a tax court case

    Suffering has never been made a prerequisite to deductibility Jackson v. Commissioner, 59 T.C. 312, 317 (1973)

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  • Trends in Nursing Licensure

    An interesting article for our clients who are Registered Nurses A Battle Brews Over Nurse Licensing in the Digital Age – WSJ

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March 2016

  • I Do Not Want a Reimbursement!! Ill Deduct It On My Return Instead!!

      Want to decline tax free reimbursements for travel expenses and deduct them on your return instead? You cannot claim the deduction if you were offered or had access to an employer reimbursement.. Linked below is an old court case that is still cited in current cases involving an executive that refused to submit his expense reports to his company for reimbursement and then claimed the expenses on his return. The court denied his deduction because “he {was} attempting to convert the employer’s right to a deduction into a right of his own.” 60-1 USTC 9135 Marvin A Heidt and Beatrice Heidt […]

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  • Failure to File Penalties Will Increase in 2017

    The Trade Facilitation and Trade Enforcement Act of 2015 (HR 644), which was signed into law by President Obama on February 24, increases the penalty for failure to file a return and puts a permanent moratorium on state and local taxation of Internet access. For taxpayers who fail to file their returns more than 60 days after the due date or extended due date, the Trade Act increases the minimum penalty from the lesser of $135 or 100 percent of the unpaid tax, to the lesser of $205 or 100 percent of the unpaid tax. The $205 penalty amount is […]

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February 2016

  • What is a Tax Home? Are you a Tax Turtle?

    I have spent the last 20 years explaining the concept of a tax home to clients and those that claim to know more than the IRS. This is a very instructive and candid Tax Court case that uses more common vocabulary so non-attorney readers can understand. A good description of a tax home. The case also focuses on a common practice among mobile professionals of using a friends or relatives home as a tax residence and what should be expected. Also, the case introduces another term to the tax home vocabulary: it defines an itinerant – someone who does not have […]

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  • The IRS Fails its Own Reimbursement Policy

    Recently, the Treasury Inspector General for Tax Administration (TIGTA) reviewed the IRS due diligence efforts in tracking employees potentially engaged in temporary assignments greater than a year and whether their travel reimbursements were treated as taxable income in those situations. They are not doing the best job and partly due to confusion about the rules among the supervisors. They did however, find that the IRS had established adequate guidance on when travel reimbursements are taxable – in other words, there wasn’t an excuse 🙂 The full report can be found here TIGTA Report

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  • I Can Deduct Cat Food?

    Reading Tax Court cases can be fun sometimes. A 2001 decision allowed the owners of a scrap yard to deduct cat food. The property was prone to snakes and rats so the owners encouraged wild cats to visit their their property by leaving cat food scatted throughout the property. The court allowed the deduction, or as the bottom of page 18 of the decision reads, the IRS conceded the deduction and declined to argue against it 🙂 Who could argue with such a harmless, fuzzy critter? Cat Food Allowed as a Deduction in Tax Court Case    

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  • February 2016 Newsletter

    February 2016 TravelTax News

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  • Watch for Phishing Scams!

    There are plenty of people trying to pretend to be IRS agents and now those in the act are sending text messages Remember that the IRS NEVER uses email or text except in RARE cases when there is a long term relationship with a single individual who works for the Service. Scams to be Aware of

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  • Blizzard of February 2016

    Take a look out our offices at the blizzard

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  • An IRS Phishing Scam Artist Caught

    Click here for story

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January 2016

  • The Wonder of our Tax Code

    The 1040EZ form is the simplest Federal Tax return to complete. The actual form is one page with a second page for worksheets 1040EZ Form Want the instructions for this one page form? Sure …… A modest 44 pages Instructions for the “Simple” 1040EZ Form And we wonder why taxes are hard?

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  • I Got a Per Diem Raise!!!

    Often in the temporary staffing industries, we hear of travelers getting a raise. Not that kind of a raise. Not in wages, but in per diems. There are many ways an agency can inadvertently treat per diems as wages and this is one of them. Say a traveler has completed a 13 week assignment and decides to extend. If the bill rate is the same, there are some additional funds that otherwise would have gone to start up costs if this was the first assignment for the traveler at the facility/outlet. With this extra cash, the agency can give the traveler […]

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December 2015

  • New Mileage Rates for 2016

    IRS Notice 2016-01 The new standard mileage rates for 2016 are 54 cents a mile for business 14 per mile for charity 19 per mile for moving The depreciation factor is 24 cents per mile which is included in the 54 cents a mile ***Note that these are reduced from previous years  

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November 2015

  • Financial Literacy of Millennials

    I am not attempting to single our one generation and some of this data is just be a product of age/maturity, but a recent study showed that in the US, the “financial literacy” of those entering the job market is less than their prior generation peers. Significantly different from that of other nations whose younger citizens are often MORE financially literate than their older peers. The study suggests that our educational system is lagging in financial instruction.

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May 2015

  • ALERT for Maryland and Indiana Residents

    ALERT FOR MD and IN RESIDENTS Today, SCOTUS released its opinion in Wynne v MD comptroller and ruled that the MD income tax schematic is a violation of the Commerce Clause and unconstitutional. This will probably affect Indiana as they have the same system in place. For primers, MD imposes a state tax and a county piggyback tax collected by the MD Comptroller. If an individual works out of state, the credits for taxes paid to other jurisdictions only apply to the state portion, not the county portion. This is not like PA and OH where they have their own local […]

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April 2015

  • Identity Theft

    The number one problem facing tax filing is identity theft. I linked a good article on this at our FB page https://www.facebook.com/pages/TravelTax/111093382278561?ref=hl

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February 2015

  • Student Loans and Tuition Tax Credits/Deductions

    One thing I have never understood is why some clients believe they cannot claim tuition on their tax return if they receive the funds from student loans. At the same time, they will take out a loan to buy a car and be very forthright about claiming the sales tax. I guess it’s a misunderstanding of how things are paid.  When someone loans you money,  your obligation to repay that loan is instantaneous  regardless of the fact that you negotiate  a payment frequency and an end point  for those payments.  I guess some  would surmise that they could not  deduct the tuition immediately,  but […]

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  • Digress to a Rant #1

    Digress to a Rant #1 It amazes me that some people like working as an independent contractor because “they don’t take taxes out” ……… That euphoria ends when I have to tell them how much they owe which commences the obligatory rage that the contractor screwed, tricked {Insert your own expression of surprise} them into doing it that way.

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  • Basic Tax Math – Part 7 – State Taxation, Domicile and Your License

    The place most travelers and tax practitioners stumble when dealing with multistate taxation, is separating the concepts of permanent residence / domicile and a tax residence. The two are entirely different yet frequently referred to synonymously because they are often at the same place. A permanent residence is a legal concept, often referred to as one’s domicile. If you want to know someone’s permanent residence, just ask to see their driver’s license, car registration and voter registration. Each of these connections tie an individual to a state, and more particularly, a community within the state. The permanent residence, domiciliary state has the right to tax an individual’s global […]

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  • Basic Tax Math – Part 6 – State Taxation

    While dealing with federal taxes is hard enough, anyone who works in more than one state has a greater challenge juggling all the different state tax returns. How are taxes computed when you work in more than one state?  Well on paper,  it’s pretty simple, however, it is a great source of confusion for most. The rules run like this : your home state will tax your global income  regardless of where you earned it and regardless of whether you earned any income in your home state. It doesn’t even matter if you were gone for an entire year and never set foot in your home state- […]

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  • Basic Tax Math – Part 5 – How Withholding is Calculated

    As mentioned in Part 4, the amount withheld for income taxes is based on the data you provide on Form W4 and the state equivalent – if any. How is the actual amount determined from this data? The withholding “formulas” start with the rate of earnings for each individual paycheck extrapolated to an annual amount. Assume you are paid bi-weekly, which is 26 checks per year. If you make $2K in the biweekly pay period, the withholding formula starts with the assumption that you make $52,000 a year. Based on $52K a year, the formula then calculates the amount of tax […]

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  • Basic Tax Math – Part 4 – Why Do They Tax $X Out of My Check?

    The short answer is ………. you told them too! Seriously Now don’t get the bright idea that you can tell them to withhold nothing (called declaring exempt) and wait till the end of the year and pay it at once either. That amount they take out – the “withholding” that we discussed in the earlier posts – is an estimated tax payment based on your income. Remember, it is not the TAX, it is your ESTIMATED payment. You cannot change withholding for SS and Medicare as that is a flat rate and technically not an income tax – it is an […]

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  • Basic Tax Math – Part 3 – What is "Withholding"

    When you receive a paycheck, you will see amounts “withheld” from your wages for Federal and State income tax and for Social Security / Medicare. Sometimes these are coded with acronyms like FIT, Fed W/H, S W/H, FICA, Med etc. Regardless of the label, it is an amount withheld from your wages for  estimated tax payments. If it was not withheld, you would have to write a check to the IRS, Social Security and the State Tax Commission with each paycheck. Withholding makes it simple but is removes the pain of having to actually write the check and appreciate how painful […]

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  • Basic Tax Math – Part 2 – Marketing Big Refunds

    No – I don’t do this for clients Nor do I make convincing commercials like this I once drove by a tax preparation office in the suburbs of a large city giving away free leather jackets to those that walked in with their tax documents. The entire mass of humanity in their office were donned in brown leather jackets ….. They were all promised BIG refunds for wearing the uniform.. The first audit I ever represented for a client was one where the taxpayer was audited to produce evidence against a tax preparer that was under investigation for fraud. The CID (IRS Criminal Investigation Division) […]

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  • Basic Tax Math – Part 1

    Its too complicated!

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January 2015

  • For Those Of You Too Afraid To Ask…. If The 50 Mile Myth is Nonsense, What Is The Rule?

    Okay- Don’t be afraid to ask questions ….. Since the first post on this topic, I have heard from a few people who want to know the accepted rule but don’t want to ask publically. Ok, that’s fine 🙂 The benchmark for deductible lodging expenses –  OR better, in tax jargon as it applies to per diems for lodging –  the benchmark for determining if the housing/lodging reimbursement is excluded from your reported wages is …… guess what? ……….. an overnight stay where you have to pay for lodging!!! Pretty logical huh? Our tax code does make sense at times. Why should you […]

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  • Welcome to the TravelTax Blog

    While you may have read my articles on various websites, or my posts on FB pages and other forums, from time to time I like to wax eloquent without fitting my thoughts into someone else’s prescripted format. Some of the entries may be long and a few will simply be rants. Whatever the case, you are guaranteed to find some nugget of tax knowledge fitting for your situation with a dash of sarcasm or philosophy. Since our clients are primarily engaged in multistate assignments, cross border employment or posted abroad, they share a common connection of working on the road, exploring the world or just planting […]

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  • 50 Mile Rule Nonsense

    I have been preparing tax returns for travelers for almost 20 years and one thing that never seems to die is the urban myth of a  50 Mile Rule that recruiters and travelers talk about with religious conviction. The tale goes like this: as long as you drive over 50 miles to get to your assignment, you can get tax free housing allowances. You can even use someone else’s address on your tax forms to get the money, since all the IRS cares about is your permanent residence address. Really? Wow. If it is really this easy, everyone should live 51 miles a […]

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