Hi, I am self employed and was living away from home out of my state from August-November paying month to month rent in cash to another individual. Since I was only staying in this state to work and do business, am I able to deduct a portion or all of the lodging expenses and how do I prove it since I paid the other person cash? I was told I could deduct my hotels/stays on business travel but How long can someone stay in another state and work to where it is still considered a deductable travel expense?
In your situation, the IRS may deny your deduction as traveling expenses, unless there was a specific reason you were working in the state- like it was a temporary work assignment doing work that you could not do from your home. If it was, you could get receipts from the people you rented from or maybe save your bank statements that show the cash withdrawals.
From the IRS (Topic No. 511 Business Travel Expenses)
You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.
Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.