In travel therapy lingo, contract work is often referred to as per diem employment. Per diem (“per day”) rates are the pre-set reimbursements for housing, meals and incidentals that don’t require receipts. Those rates are set by the government on an annual basis, for every county in the U.S. and can be viewed online. You are able to deduct these expenses or be reimbursed for them by your employer, provided you have a tax home. Your tax home is not necessarily your family residence. The IRS considers your tax home the city or area where your main source of business is located. In short, your permanent/family residence is your legal address, while your tax home is your money-producing address for tax purposes…and they may or may not be one in the same for travelers.
Centra’s tax guru, Joseph C. Smith, suggests using the following 3 criteria to determine if you have a tax home and where it is:
- Part of your business is performed in the area of your main home which you use for lodging while engaged in that work.
- Your main home living expenses are duplicated when you are away from that home on business.
- Your family members live in that main home while you are traveling; you return to lodge frequently there; and you are never away from that main home for more than 12 months in a 24 month period.
Still uncertain of where your tax home is? Contact the industry experts at Centra and let them guide you through the process. Contract…temporary…travel or per diem…no matter what you call this type of work…if you are a PT, PTA, OT, COTA, RN or SLP looking for great travel opportunities call us at 800 535 0076 today!