Tax Home vs. Residence Home

I've seen a lot of confusing info on the Internet about tax homes and residence homes for truckers. Hopefully, this thread can clear the subject.

They are each important for two distinct, but very important tax issues.

1. Your per diems are based upon your tax home.
2. Your state income taxes are based upon your residence home.

What is your tax home? If you're a company driver or an OO working out of one main terminal, this is easy. It's your main terminal. Otherwise, if you're an OO with a business address, that's your tax home.

If you don't have a business tax home (very few truckers fit this), then your residence is usually your tax home. (There are some exceptions.)

Here's the glitch: if you don't have a business tax home or a residence, you are considered a transient, and can't qualify for per diems. The easiest way around that is to find someplace to call your business headquarters.

 

Roadmedic, I'm glad we're discussing this, because it is an area with a lot of confusion.

Here's how I read it. If your main terminal where you get your loads dispatched, get your pay, etc., it doesn't matter that you travel all over the country. The IRS will consider that your tax home.

That means you can't take per diems while you are at your main terminal, but you might be able to at home (under certain conditions).

I'll dig up some references on this and post them later.

I'll also flag this one for [THREAD=120444]Mr. Brown[/THREAD]. Hopefully, he can post something soon on it.

 

I misstated. I meant where you get your load assignments or bookings, not the actual loads. If you get your loads booked out of one main terminal, that's your tax home. This would apply to company drivers and OO's.

Again, withholding is based upon residence home, and per diems are based upon tax home, which are based upon entirely different factors. For some drivers they are the same. There is a lot of confusion on this subject.

Using Swift as an example, if the drivers' dispatch is in Phoenix, that's their tax home. If their dispatch is at another Swift terminal, that's their tax home. When I was on the road, I was officially moved from one terminal to another, as far as where I reported. My driving area was still all 48 states, but my tax home changed to where I was then dispatched from.

Yes, and there's more, and I will dig it out later and post it. Even on that link, however, the primary business location takes precedence over the residence location.

The IRS is always interested in this one, and, yes, it is a tough issue. I think we'll get more clarity as we discuss it. Thanks for your valuable input, Roadmedic. You always keep me thinking.

Best,

 

Well, we've clearly established that this is a confusing area.

I'll do some research and post more later.

 

I found this example right in the link you posted, IRS Publication 463.

Here's a driver who makes long runs (sure sounds like OTR), based out of a terminal in Phoenix. The IRS says Phoenix, the place of his home terminal, is his tax home, not the place of his residence.

I know when I was on the road, my company definitely considered where my dispatcher was to be my home terminal, and when I got a different dispatcher in a different terminal, my home terminal moved.

Home terminal is a term the IRS uses in determining tax home. It's considered your "post of duty" another term it uses to determine your main place of business.

I know I read more, and I'll keep digging.

Best,

Jerry

 

Here's a quote from Jackson Hewitt. They're not the IRS, but certainly respectable in the tax field.

If this would apply to an OO, it would also apply to a company driver.