When you spend a lot of time on the road, you have to travel light. William McNiell spent almost all of 1998 and 1999 on the road, so the Tax Court lightened his load by about $7,400.
Mr. McNiell is a long-haul truck driver. According to the Tax Court, he spent 360 days on the road in 1998 and 345 days on the road in 1999. He whiled away the remaining 5 days of 1998 rent-free at his "partner's" house in Green Bay. His 20 days off for 1999 were spent at a mobile home in Missouri. He deducted his travel, lodging and meal expenses on the road when he filed his 1998 and 1999 tax returns.
The tax law permits business travelers to deduct their traveling costs, including food and lodging expenses, when "away from home." For someone constantly on the go, this causes a dilemma: what, exactly, is your "tax home"? The court decided that Mr. McNiell was homeless, at least for tax purposes.
"During the tax years at issue, petitioner had no principal place of business, nor did he incur substantial living expenses at a permanent residence... petitioner was constantly on the move due to his work. Consequently, he had no tax home within the meaning of section 162(a)(2) and is not entitled to the claimed deductions for traveling expenses (including meals expenses)."
This case breaks no new ground, but it does illustrate a catch-22 for over-the-road drivers, salesmen and others who spend most of their life on the road. The tax law seems to require them to incur the expense of a home base, and to stay there regularly, to deduct their travel, lodging and food. If a trucker spends more time at home, or works out of a fixed terminal, he is likely to get more deductions than someone who is arguably working harder. Unfair? Illogical? It doesn't have to make sense - it's the tax law!
This article may be reprinted or published, as long as the following information and live links are included.
Denise is a CPA with a Bachelor degree in Business Administration with a concentration in Professional Accounting from The University of Michigan, Dearborn. She earned her Master of Science in Taxation from Walsh College of Accountancy and Business Administration. She has fifteen years of experience in corporate taxation and public accounting.
Denise has three children and
she is married to a trucker. To contact Denise More about Trucker's Taxes and Denise 