Contact UsI live in Michigan but travel for work to other states. Sometimes I am in the same region for over a year. If I were to rent an apartment instead of doing the hotel stays every week yet still go home on the weekends, would I be able to expense the apartment even though the agreement on the apartment is over one year?
I don't want to live there but make it easier for me to travel, ie fly in on late sunday night instead of early monday morning so that I actually sleep. It is so much easier on my body. It also allows me to bill more hours, as I'm self employed and bill by the hour. Finally, flights are generally a little cheaper on Sunday nights and Friday mornings so the overall effect of the weekly expenses would be lower what they currently are by almost a $1000 per month. They do not re-imburse me for hotel expenses for flying in on Sunday night or flying out on Friday morning.
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Tax Professional Answers
John Dundon, II EA
This is a loaded question for sure. Your primary residence is in Michigan. You are self employed and travel outside of Michigan regularly and consistently - sometimes to the same area - should you rent an apartment as opposed to getting extended stay hotel reservations?
According to the Schedule C Instructions you enter your expenses for lodging and transportation connected with overnight travel for business while away from your tax home. In most cases, your tax home is your main place of business, regardless of where you maintain your family home. You cannot deduct expenses paid or incurred in connection with employment away from home if that period of employment exceeds 1 year. Also the travel must be for a bona fide business purpose which implies a profit motive. If there is no profit in any 2 of the previous 5 tax years you could find yourself subject to the hobby loss rules.
First I suggest incorporating so as to create no doubt as to the efficacy of your profit motive. Second try to break your engagements up into periods of less than one year when you can. Once incorporated I'd get an apartment lease in the name of the corporation if possible. Of course make sure you have adequate substantiation for the expense when questioned by the taxing authorities.
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578 weeks ago
According to the Schedule C Instructions you enter your expenses for lodging and transportation connected with overnight travel for business while away from your tax home. In most cases, your tax home is your main place of business, regardless of where you maintain your family home. You cannot deduct expenses paid or incurred in connection with employment away from home if that period of employment exceeds 1 year. Also the travel must be for a bona fide business purpose which implies a profit motive. If there is no profit in any 2 of the previous 5 tax years you could find yourself subject to the hobby loss rules.
First I suggest incorporating so as to create no doubt as to the efficacy of your profit motive. Second try to break your engagements up into periods of less than one year when you can. Once incorporated I'd get an apartment lease in the name of the corporation if possible. Of course make sure you have adequate substantiation for the expense when questioned by the taxing authorities.
Question Owner
Thank you for the answer. I am incorparated, S-corp. I have turned a profit in every year as well. I have those things going for me.
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578 weeks ago