Across the literature on this site, you frequently see use of the term tax home. You may be wondering what exactly a tax home is. A tax home is a concept best defined by the IRS. As a blogger, I’ll do my best to explain a tax home and provide you with references to more official sources. If you have questions about the subject matter, please reach out to a tax professional for more information. I am not a tax professional and do not have professional experience working with taxes.
You may consider contacting an enrolled agent or certified public accountant. An enrolled agent is a federally licensed tax professional who can complete taxes and represent taxpayers before the IRS. A certified public accountant is licensed by individual state certifications. Here is a website where you can locate enrolled agents in your area: https://taxexperts.naea.org/.
Why Is A Tax Home An Important Concept For Travel Therapists To Know?
As a traveling therapist, it is important to know if you have a tax home or not. Because having a tax home is what determines if you receive free housing/tax-free stipends when you take travel assignments. If you have a tax home and are traveling away from it for work temporarily, you can qualify for tax-free money. If you don’t have a tax home, then you would not qualify for tax-free money and would be considered itinerant. Either way, you can still take travel therapy contracts.
What Is A Tax Home?
The following information is taken directly from IRS Publication 463. For more information, please review the publication here: https://www.irs.gov/pub/irs-pdf/p463.pdf
The IRS says that your tax home is your main geographic place of business. This is the place where you work and do the majority of your business. This is separate from where you live.
If you have more than one place of business, then your tax home would be the main place of business.
I’m a Travel Therapist – Now Where Is My Tax Home?
As a traveling therapist, things change. You are moving around every couple of months. For some travel therapists, you may still have a main place of income that is your tax home. E.g. a therapist who works in the schools for 9 months out of the year . The therapist then takes a travel contract in the summer. However, for others, you may no longer have a single geographic place of income where you make the majority of your money.
According to the IRS, you may still have a tax home even if you don’t have a regular or main place of work. In this case, where you don’t have a regular place of income, your tax home may be the home where you regularly live.
If you don’t have a regular or main place of business or work, use the following three factors to determine where your tax home is:
1. You perform part of your business in the area of your main home. And use that home for lodging while doing business in the area.
2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
3. You haven’t abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.
If you satisfy all three factors, your tax home is the home where you regularly live. In the case that you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only two of the three factors, then consider talking to a tax professional to determine if you have a tax home. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you live.
Can I Be A Travel Therapist Without a Tax Home?
Yes, you can absolutely be a travel therapist without a tax home. You would be considered an itinerant worker. Your income would all be taxed.
If you still have questions at this point, I highly recommend reading the IRS publication, https://www.irs.gov/pub/irs-pdf/p463.pdf, which is where I got the bulk of the information for this blog. Also, check out the resources on www.traveltax.com. The owner of Travel Tax is a former travel respiratory therapist and now an enrolled agent with the IRS. Kindly, please do not contact me (Julia Kuhn) with your tax questions. As much as I would love to help, I am a speech-language pathologist by trade, and not the person with the answers to your burning tax questions.
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