You can deduct unreimbursed travel expenses that you incur as an employee, if you temporarily travel away from your tax home for your job. These expenses include transportation, car expenses, lodging and meals. (Meals are only allowed if you are traveling overnight.)

You can deduct unreimbursed travel expenses that are ordinary and necessary expenses of going from one workplace to another. Commuting costs (travel between home and work), however, are not deductible. If you have an office in your home that you use as your principal place of business for your employer, you may deduct the cost of traveling between your home office and any other places of work associated with your employment.

You may deduct the cost of traveling between your residence and a temporary work location outside of the metropolitan area where you live and normally work. If you have one or more regular work locations away from your residence, you may also deduct the cost of going between your residence and a temporary work location within your metropolitan area.

Where is your tax home?

In determining the deductibility of travel expenses when you travel outside your general work area, the location of your tax home must first be established. Your tax home is your main place of business or work, regardless of where you maintain your family home. The following factors are used to determine your main place of business or work:

• The total time ordinarily spent working in each area.
• The level of business activity in each area.
• Whether the income from each place is significant or insignificant.

You are considered away from your tax home if you are required to be away from the general area of your tax home for longer than an ordinary workday, and which will require you to get sleep or rest.

What expenses are deductible?

If you are on a temporary assignment or job away from your tax home, your job expenses may or may not be deductible. A temporary assignment is one that is expected to last for one year or less, and does in fact last for one year or less. The following factors are used to determine if traveling expenses to that temporary assignment or job are deductible or not:

• If the assignment has a fixed ending date (one year or less), the expenses are deductible.
• If the assignment or job lasts or is expected to last indefinitely, the expenses are not deductible.

Meal expenses

To figure your meal expenses when traveling away from your tax home, you can use either the actual expenses incurred, or the standard rate set by the IRS. The standard rate can be higher in some cities, and you can find this information on the Internet at www.qsa.gov. Whichever method you use, tax law allows you to deduct ONLY 50% of your unreimbursed meal expenses.

Conventions on cruise ships

You can deduct expenses of up to $2,000 per year for attending conventions, seminars, or similar meetings held on cruise ships.

Always bear in mind, however, that employee business expenses are subject to the 2% of AGI limitation, meaning that they must exceed 2% of your adjusted gross income before you can claim the deduction.

The primary objective of this article is to empower taxpayers to learn to do their own taxes. For detailed information on how to deduct your employee business expenses, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3,” on TaxConnections.com.