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Question
If my business is location independent and I travel for business 3-9 months out of the year are my lodging expenses tax deductible?
Answer

Great question! If you are actually traveling for work, then yes. If you have a remote business and are traveling for personal pleasure, then no.

I like to follow the balanced meal rule: if you’re having steak and potatoes for dinner, your work time needs to be equivalent to the steak. Any personal time you spend while traveling is the potatoes —arguably the best part of the meal, but it can’t dominate the plate.

One thing to keep in mind when claiming your travel expenses: Since your business doesn’t have a physical location, your primary personal residence is most likely going to be considered your “tax home.” This is important because travel deductions are only eligible if you can demonstrate you’re leaving your “tax home” to conduct business.

If your work is such that you don’t have a consistent place of domicile, you’re technically considered a “transient worker,” and are disallowed from claiming any travel deductions at all.

If you don’t already, I highly recommend designating a portion of your permanent residence as a home office so that you can easily demonstrate you have a tax home. Another way to reinforce this principle is registering your business in the state where you live and filing your business taxes with that state.

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Sarah York, EA

Sarah is a staff writer at Keeper Tax and has her Enrolled Agent license with the IRS. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. She has nearly a decade of public accounting experience, and has worked with clients in a wide range of industries, including oil and gas, manufacturing, real estate, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax planning at the state and federal level. During her time in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and sole proprietorships. Sarah is a member of the National Association of Enrolled Agents (NAEA) and maintains her continuing education requirements by completing over 30 hours of tax training every year. In her spare time, she is a devoted cat mom and enjoys hiking, baking, and overwatering her houseplants.

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