If the taxpayer does not have a regular or main place of business, the tax home may be the place where taxpayer regularly lives. In these situations the taxpayer may consider their tax home to be their residence and then they travel to different job sites to perform their trade. Use the following three factors to determine where the tax home is located.
• The taxpayer performs part of his or her business in the area of the main home and uses that home for lodging while doing business in the area.
• The taxpayer has living expenses at the main home that are duplicated because the business requires him to be away from that home.
• The taxpayer has not abandoned the area where both his or her historical place of lodging and claimed main home are located; the taxpayer has a member or members of the family living at the main home; or the taxpayer often uses that home for lodging.
If all three factors are satisfied, the tax home is the home where the taxpayer regularly lives. If only two factors are satisfied, the taxpayer may have a tax home depending on all the facts and circumstances. If only one factor is satisfied, the taxpayer is a transient; the tax home is wherever he works and he cannot deduct travel expenses.
So what does it mean if a taxpayer is transient?
A taxpayer who does not have a regular place of business or post of duty and has no place where he or she regularly lives is considered a transient (or an itinerant) and the taxpayer’s tax home is wherever he or she works. A transient worker cannot claim a travel expense deduction because he or she is never considered to be traveling away from home.
