So if travelling assignmen last more than a year. then travelling cost are not deductible. if your spouse owns llc , you work for it and LLC pays for travelling expense

[mital1982]

so for doctors if you are self employed as locum and you have an assignment which if turns in long term over year you get dinged on cost of staying and lodging and travelling . especially if your spouse is working and has to stay in particular place due to employment reason.

[AmeliesUncle]

Do you have a question?

As you said, if your work assignment lasts, or is expected to last, over 1 year the travel expenses such as meals and lodging are not deductible.  It doesn't matter if you work for your spouse's LLC or not.

[mital1982]

so locum agencies which have long term contract , pay for lodging and plane travel and get deduction on their bussiness. 

but if my  spouse owns that locum agency then i cannot do it?

[AmeliesUncle]

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@mital1982 wrote:

so locum agencies which have long term contract , pay for lodging and plane travel and get deduction on their bussiness. 

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No, they don't.   Well, sort of.

If the business pays those expenses for a long-term contract as a self-employed person, that is not a deduction. 

If they pay those expenses for an employee or Independent Contractor, that is wages (or payment for a contractor) to the employee or contractor.   Because the business is paying the employee or contractor, that extra wages/payment is a deduction for the business.  But because the employee or contractor is paying taxes on that amount, it effectively means that is not a business deduction.

[Opus 17]

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@mital1982 wrote:

so locum agencies which have long term contract , pay for lodging and plane travel and get deduction on their bussiness. 

but if my  spouse owns that locum agency then i cannot do it?

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I can't speak to any specific type of agency, they might use people as subcontractors rather than employees.  And there may be special concerns where the employee is related to the employer.  You may want professional guidance.  

In general, this is what happens with a W-2 employee and an unrelated employer:

The tax code assumes that everything of value provided to an employee as compensation for services is taxable wages, unless it falls under one of the fringe benefit rules or other exceptions (like business travel).  For travel away from home that is expected to last less than a year and actually does last less than a year, the employer can reimburse the employee under an accountable plan.  The reimbursement is not taxable income to the employee, and is a deductible business expense to the business.

If the travel lasts more than one year, and the business reimburses the employee, the business may still deduct the reimbursement as a business expense, but it must include the reimbursement as taxable wages on the employee's W-2, and withhold the appropriate federal, state and employment taxes.

To put it another way, if the employer pays for the employee's apartment, food or car in their home city, that must be included in the employee's taxable wages.  For a temporary assignment away from their tax home, those expenses may be reimbursed tax-free.  But when the assignment is not temporary, that new location is considered the employee's tax home, and if the employer pays for food, lodging and travel, that reverts to being part of their taxable wages.  

[Opus 17]

Also remember, W-2 employees can no longer deduct any unreimbursed travel expenses.  That deduction was eliminated in the tax reform act of 2018.  A W-2 employee can list the expenses and they might flow through to the state return for a state deduction, depending on your situation, but they don't qualify for a federal deduction. 

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@mital1982 wrote:

so locum agencies which have long term contract , pay for lodging and plane travel and get deduction on their bussiness. 

but if my  spouse owns that locum agency then i cannot do it?

---

To your broader question, what happens if an assignment lasts more than one year?  If the worker is self-employed, they can no longer deduct their expenses.  And if the worker is a W-2 employee, the company must add their reimbursement to their taxable income, it's not tax-free any more.  In both situations, the new work location becomes your new "tax home" if the assignment is not considered temporary.

Temporary meaning, expected to last and actually does last less than 1 year.  If an assignment starts out with the intention of being temporary, and is then extended, it becomes "not temporary" as of the date that fact is known, even if less than a year has passed.

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.

https://www.irs.gov/taxtopics/tc511

You don't have to like it, but that's the way it is.  You never get a deduction for food or lodging or commuting in your home city.  If your employer pays for those things, it must be included in your wages.   Because travel "away from home" often increases your cost of living, those expenses are deductible (or excludable from income) as long as it is a temporary assignment.  If the assignment is not temporary, you can't deduct or exclude the expenses because it's your new main home, and there has to be some set rule of what that is.  

[mital1982]

Thanks for reply but still there is lot of confusion.

so an oil company out of texas rents motel or hotel in new mexico  (some rooms or all rooms) for a year for employee housing. They deduct all these cost. they fly their contractors, employee and even high ranked official. tickets are booked using corporate card, rental car on card, they  to do regular work in shifts for two weeksand are off two weeks. This cost is borne by the company and tax deductible.  It is not shown on the empoyee's w2 or 1099 of contractor.  so is  it because it is c-corp?

also if you have w2 job for 2 weeks in one city and you commute for bussiness to another city like assignement on 1099 , the irs doesnt tell what is your tax home. it just consider either/or situation. i would assume in such a case even though your assisgnment last more than a year your tax home (as you cant have two )would be still where you do your w2 job and so travel and travel related expenses would be bussiness cost

[Opus 17]

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@mital1982 wrote:

Thanks for reply but still there is lot of confusion.

so an oil company out of texas rents motel or hotel in new mexico  (some rooms or all rooms) for a year for employee housing. They deduct all these cost. they fly their contractors, employee and even high ranked official. tickets are booked using corporate card, rental car on card, they  to do regular work in shifts for two weeksand are off two weeks. This cost is borne by the company and tax deductible.  It is not shown on the empoyee's w2 or 1099 of contractor.  so is  it because it is c-corp?

also if you have w2 job for 2 weeks in one city and you commute for bussiness to another city like assignement on 1099 , the irs doesnt tell what is your tax home. it just consider either/or situation. i would assume in such a case even though your assisgnment last more than a year your tax home (as you cant have two )would be still where you do your w2 job and so travel and travel related expenses would be bussiness cost

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1.  If the assignment is temporary--meaning that it is expected to last and actually does last 1 year or less--the company can deduct the expense as business-related travel and does not have to include the expenses as income on the employee's W-2s.  If the assignment is indefinite (has no planned end date) or if the assignment starts out with a planned end date of 1 year or less but actually lasts longer, then the value of the hotels, food, cars and everything else must be included in the employee's W-2 wages for the year and is subject to federal, state, social security and Medicare tax withholding, beginning as of the date the assignment became indefinite or exceeded 1 year.  The expense is NOT deductible by the business as "travel", but it is deductible as wages paid to the employees.  (Same $$ deduction, different space in the tax return.)

The rules are the same no matter if the "company" that the employees work for is an S-corp, C-corp, LLC, or sole proprietorship. 

(The rules for officers and "highly compensated employees" may be different.  Please see a CPA if this applies to you.)

2. "also if you have w2 job for 2 weeks in one city and you commute for bussiness to another city like assignement on 1099 , the irs doesnt tell what is your tax home."

Your question doesn't really make sense.  If you are a W-2 employer for company A, then everything you do for company A is as an employee.  Company A can't treat you as an employee in one city and an independent contractor in another city.  If company A assigns you to a new city for more than 1 year, your travel is not a business expense because even if you did not change your domicile (personal residence, where you vote, your kids go to school, etc.) you changed your tax home according to the regulations for business travel. The value of lodging etc. provided by the company is considered taxable wages to you, and the company deducts it as wages and not as business travel. 

If you live in city A and you commute to city B which is your regular workplace, then your tax home is city B and commuting is never deductible, even if city B is a long distance from city A.  

If you are a W-2 employee for company A, and you take a leave of absence to do some independent contractor work for company B, then the usual rules still apply.  If your assignment with company B in a different city lasts more than 1 year, then it is not temporary and your travel expenses are not deductible on schedule C, because even if you did not change your domicile, you changed your tax home.