Need some input on how to approach tax home situation

  • Add to Bookmarks
krooney4
  • Posts: 3
  • Joined: 06/20/11

Need some input on how to approach tax home situation

Posted by krooney4 on Jun 25, 2011 8:53 pm

I am just starting to look into traveling and am not sure which is the best way to approach the living / tax home situation.  I currently am living in an apartment and was planning on moving my stuff into storage and use my parents address as my home base.  However, upon reading the tax section of this website, I learned that I would have to pay taxes on all per diem and housing reimbursement.  I'm wondering if I should look for a cheap rental apartment somewhere to store my stuff and use as my home base, or should I consider buying a condo.  

Has anyone gone through this dilemma and what have you done?  

Kathleen
Joseph Smith Joseph Smith
  • Posts: 68
  • Joined: 12/28/09

Re: Need some input on how to approach tax home situation

Posted by Joseph Smith on Jun 27, 2011 8:48 am

A tax home can be a rental or a home/condo you own so the choice does not affect the decsion for the purpose of a tax home. Either you have the tax home or you do not.

What you ultimately have is an investment decision, not a tax decision. One thing to consider is that the benefit of the tax free reimbursements are reduced by the rent/mortgage that you are paying. Keeping a tax home can save 2-10K a year depending in the area, but if you spend than you save to ahve that benefit, whats the point of a tax home.

You should really be asking the question of whether the condo is a good long term investment (vs just a tax home)
Joseph Smith EA/RRT
Enrolled Agent, Respiratory Therapist
Admitted to practice before the IRS
www.traveltax.com
info@traveltax.com
402.379.7818
Joseph Smith Joseph Smith
  • Posts: 68
  • Joined: 12/28/09

Re: Need some input on how to approach tax home situation

Posted by Joseph Smith on Jun 27, 2011 8:48 am

A tax home can be a rental or a home/condo you own so the choice does not affect the decsion for the purpose of a tax home. Either you have the tax home or you do not.

What you ultimately have is an investment decision, not a tax decision. One thing to consider is that the benefit of the tax free reimbursements are reduced by the rent/mortgage that you are paying. Keeping a tax home can save 2-10K a year depending in the area, but if you spend than you save to ahve that benefit, whats the point of a tax home.

You should really be asking the question of whether the condo is a good long term investment (vs just a tax home)
Joseph Smith EA/RRT
Enrolled Agent, Respiratory Therapist
Admitted to practice before the IRS
www.traveltax.com
info@traveltax.com
402.379.7818
Sort: