Tax Return and Temporary Living Expense - Essay Example

Abdul deducted all of his living expenses for his time in Delaware, California, and Michigan totaling 30 months, claiming all the expenses for food, rent and transportation were temporary living expenses while he was away from home.

Issues or tax questions: Abdul would like to claim a deduction for his temporary living expenses while he was away from home but IRS examined Abdul's returns and challenged the deduction for temporary living expenses.

Answer: The expenses can only be claimed for a stay for business purposes only. Abdul did not qualify to claim a deduction under these regulations.

Rationale: Temporary living expenses including travel expenses incurred during temporary work assignment or extended business trip that was intended to last for one year or less (J.k 88). The temporary living expense includes meals, local transportation, and hotel accommodation or apartment rent for longer stays.  Meals may be estimated using federal per diem rates. On the tax return, temporary living expenses are deducted as unreimbursed employee business expenses.

Authority: IRS periodical 54, page 12, travel expenses are in Form 2106-EZ or Form 2106,  allowable unreimbursed expenses are in the 2106-EZ  Form or Form 2106 to Form 1040, Schedule A and are subject to a maximum based on 2% of calculated Gross income.