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State Taxes

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State Taxes

State taxes Index Symbols 403(b) account, What Is a 403(b) Plan? 403(b) plans Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? Participation, Who Can Participate in a 403(b) Plan? Self-employed ministers, Who Can Set Up a 403(b) Account? What is a 403(b) plan?, What Is a 403(b) Plan? Who can set up a 403(b) account?, Who Can Set Up a 403(b) Account? A After-tax contributions, How Can Contributions Be Made to My 403(b) Account? Assistance (see Tax help) B Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? C Catch-up contributions, Catch-Up Contributions Chaplain, Ministers. State taxes Church employees, Ministers and Church Employees Years of service, Changes to Years of Service Comments on publication, Comments and suggestions. State taxes Contributions, How Can Contributions Be Made to My 403(b) Account? After-tax, How Can Contributions Be Made to My 403(b) Account? Catch-up, Catch-Up Contributions Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. State taxes Nonelective, How Can Contributions Be Made to My 403(b) Account? Reporting, Do I Report Contributions on My Tax Return? Correcting excess contributions, What Happens If I Have Excess Contributions? Credit, for retirement savings contributions, Retirement Savings Contributions Credit (Saver's Credit) D Distributions, Distributions and Rollovers, Distributions 10-year tax option, No Special 10-Year Tax Option 90-24 transfer, Contract exchanges. State taxes Deceased employees, Spouses of deceased employees. State taxes Direct rollover, Direct rollovers of 403(b) plan distributions. State taxes Eligible retirement plans, Eligible retirement plans. State taxes Frozen deposit, Frozen deposits. State taxes Gift tax, Gift Tax Minimum required, Minimum Required Distributions Qualified domestic relations order, Qualified domestic relations order. State taxes Rollovers, Tax-Free Rollovers, Rollovers to and from 403(b) plans. State taxes Second rollover, Second rollover. State taxes Transfers, Transfer of Interest in 403(b) Contract E Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. State taxes Eligible employees, Eligible employees. State taxes , Church employee. State taxes Employer's annual work period, Employer's annual work period. State taxes Excess contributions, Excess Contributions Correcting, What Happens If I Have Excess Contributions? Determining, How Do I Know If I Have Excess Contributions? Excess amounts, Excess Annual Addition Excess deferrals, Excess Annual Addition Excess elective deferral, Excess Elective Deferral Excise tax, Excise Tax Excise tax Excess contributions, Excise Tax Reporting requirement, Reporting requirement. State taxes F Free tax services, How To Get Tax Help, Free help with your tax return. State taxes Full-time or part-time, Years of Service G Gift tax, Gift Tax H Help (see Tax help) I Incidental life insurance, Cost of Incidental Life Insurance Includible compensation, Includible Compensation 403(b) plan, Changes to Includible Compensation Figuring, Figuring Includible Compensation for Your Most Recent Year of Service Foreign missionaries, Changes to Includible Compensation Incidental life insurance, Cost of Incidental Life Insurance Self-employed ministers, Changes to Includible Compensation Includible compensation for your most recent year of service Definition, Definition. State taxes L Limit on annual additions, Limit on Annual Additions Limit on elective deferrals, Limit on Elective Deferrals 15-year rule, 15-Year Rule Figuring, Figuring the Limit on Elective Deferrals General limit, General Limit M MAC (see Maximum amount contributable) Maximum amount contributable, Maximum Amount Contributable (MAC) Components, Components of Your MAC How to figure MAC, How Do I Figure My MAC? When to figure MAC, When Should I Figure My MAC? Minimum required distributions, Minimum Required Distributions Ministers, Ministers. State taxes , Ministers and Church Employees Missing children, Reminder More information (see Tax help) Most recent year of service, Most Recent Year of Service Most recent year of service, figuring, Figuring Your Most Recent Year of Service N Nonelective contributions, How Can Contributions Be Made to My 403(b) Account?, Nonelective contributions only. State taxes P Pre-tax contributions, Includible Compensation, Table 3-4. State taxes Worksheet B. State taxes Includible Compensation for Your Most Recent Year of Service1 , Rollovers to and from 403(b) plans. State taxes , Worksheet B. State taxes Includible Compensation for Your Most Recent Year of Service1 Publications (see Tax help) Q Qualified domestic relations order, Qualified domestic relations order. State taxes R Reporting Contributions Self-employed ministers, Self-employed ministers. State taxes Reporting contributions Chaplains, Chaplains. State taxes Required distributions, Minimum Required Distributions Retirement savings contributions credit, What's New for 2013, What's New for 2014, Retirement Savings Contributions Credit (Saver's Credit) Rollovers, Distributions and Rollovers, Tax-Free Rollovers Roth contribution program, Roth contribution program. State taxes S Salary reduction agreement, Limit on Elective Deferrals Self-employed ministers, Ministers. State taxes , Who Can Set Up a 403(b) Account?, Self-employed minister. State taxes , Self-employed ministers. State taxes , Self-employed minister. State taxes Suggestions for publication, Comments and suggestions. State taxes T Tax help, How To Get Tax Help Transfers, Transfer of Interest in 403(b) Contract 90-24 transfer, Transfer of Interest in 403(b) Contract Conservatorship, Contract exchanges. State taxes Direct-trustee-to-trustee, Direct trustee-to-trustee transfer. State taxes Insolvency, Tax-free transfers for certain cash distributions. State taxes Permissive service credit, Permissive service credit. State taxes TTY/TDD information, How To Get Tax Help V Voluntary deductible contributions, Voluntary deductible contributions. State taxes W What is a 403(b) plan?, What Is a 403(b) Plan? Y Years of service, Years of Service Church employees, Church employee. State taxes , Changes to Years of Service Definition, Definition Employer's annual work period, Employer's annual work period. State taxes Full year of service, Full year of service. State taxes Full-time employee for the full year, Full-Time Employee for the Full Year Full-time for part of the year, Full-time for part of the year. State taxes Other than full-time for the full year, Other Than Full-Time for the Full Year Part-time for the full year, Part-time for the full year. State taxes Part-time for the part of the year, Part-time for part of the year. State taxes Self-employed minister, Changes to Years of Service Total years of service, Total years of service. State taxes Prev  Up     Home   More Online Publications
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The State Taxes

State taxes 26. State taxes   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. State taxes Parking fees. State taxes Advertising display on car. State taxes Car pools. State taxes Hauling tools or instruments. State taxes Union members' trips from a union hall. State taxes Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. State taxes Statutory employees. State taxes Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. State taxes  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. State taxes Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. State taxes Depreciation limits on cars, trucks, and vans. State taxes  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). State taxes For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). State taxes For more information, see Depreciation limits in Publication 463. State taxes Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. State taxes An ordinary expense is one that is common and accepted in your trade or business. State taxes A necessary expense is one that is helpful and appropriate for your business. State taxes An expense does not have to be required to be considered necessary. State taxes This chapter explains the following. State taxes What expenses are deductible. State taxes How to report your expenses on your return. State taxes What records you need to prove your expenses. State taxes How to treat any expense reimbursements you may receive. State taxes Who does not need to use this chapter. State taxes   If you are an employee, you will not need to read this chapter if all of the following are true. State taxes You fully accounted to your employer for your work-related expenses. State taxes You received full reimbursement for your expenses. State taxes Your employer required you to return any excess reimbursement and you did so. State taxes There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. State taxes If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. State taxes See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. State taxes    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. State taxes Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. State taxes This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. State taxes It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. State taxes Travel expenses defined. State taxes   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. State taxes   You will find examples of deductible travel expenses in Table 26-1 . State taxes Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. State taxes This rest requirement is not satisfied by merely napping in your car. State taxes You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. State taxes Example 1. State taxes You are a railroad conductor. State taxes You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. State taxes During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. State taxes You are considered to be away from home. State taxes Example 2. State taxes You are a truck driver. State taxes You leave your terminal and return to it later the same day. State taxes You get an hour off at your turnaround point to eat. State taxes Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. State taxes Members of the Armed Forces. State taxes   If you are a member of the U. State taxes S. State taxes Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. State taxes You cannot deduct your expenses for meals and lodging. State taxes You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. State taxes If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. State taxes    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. State taxes Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. State taxes Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. State taxes It includes the entire city or general area in which your business or work is located. State taxes If you have more than one regular place of business, your tax home is your main place of business. State taxes See Main place of business or work , later. State taxes If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. State taxes See No main place of business or work , later. State taxes If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. State taxes As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. State taxes Main place of business or work. State taxes   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. State taxes The total time you ordinarily spend in each place. State taxes The level of your business activity in each place. State taxes Whether your income from each place is significant or insignificant. State taxes Example. State taxes You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. State taxes You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. State taxes Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. State taxes No main place of business or work. State taxes   You may have a tax home even if you do not have a regular or main place of business or work. State taxes Your tax home may be the home where you regularly live. State taxes Factors used to determine tax home. State taxes   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. State taxes You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. State taxes You have living expenses at your main home that you duplicate because your business requires you to be away from that home. State taxes You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. State taxes   If you satisfy all three factors, your tax home is the home where you regularly live. State taxes If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. State taxes If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. State taxes Example. State taxes You are single and live in Boston in an apartment you rent. State taxes You have worked for your employer in Boston for a number of years. State taxes Your employer enrolls you in a 12-month executive training program. State taxes You do not expect to return to work in Boston after you complete your training. State taxes During your training, you do not do any work in Boston. State taxes Instead, you receive classroom and on-the-job training throughout the United States. State taxes You keep your apartment in Boston and return to it frequently. State taxes You use your apartment to conduct your personal business. State taxes You also keep up your community contacts in Boston. State taxes When you complete your training, you are transferred to Los Angeles. State taxes You do not satisfy factor (1) because you did not work in Boston. State taxes You satisfy factor (2) because you had duplicate living expenses. State taxes You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. State taxes Therefore, you have a tax home in Boston. State taxes Tax home different from family home. State taxes   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. State taxes You also cannot deduct the cost of meals and lodging while at your tax home. State taxes See Example 1 . State taxes   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. State taxes See Example 2 . State taxes Example 1. State taxes You are a truck driver and you and your family live in Tucson. State taxes You are employed by a trucking firm that has its terminal in Phoenix. State taxes At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. State taxes You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. State taxes This is because Phoenix is your tax home. State taxes Example 2. State taxes Your family home is in Pittsburgh, where you work 12 weeks a year. State taxes The rest of the year you work for the same employer in Baltimore. State taxes In Baltimore, you eat in restaurants and sleep in a rooming house. State taxes Your salary is the same whether you are in Pittsburgh or Baltimore. State taxes Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. State taxes You cannot deduct any expenses you have for meals and lodging there. State taxes However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. State taxes You can deduct the cost of your round trip between Baltimore and Pittsburgh. State taxes You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. State taxes Temporary Assignment or Job You may regularly work at your tax home and also work at another location. State taxes It may not be practical to return to your tax home from this other location at the end of each work day. State taxes Temporary assignment vs. State taxes indefinite assignment. State taxes   If your assignment or job away from your main place of work is temporary, your tax home does not change. State taxes You are considered to be away from home for the whole period you are away from your main place of work. State taxes You can deduct your travel expenses if they otherwise qualify for deduction. State taxes Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. State taxes   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. State taxes An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. State taxes   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. State taxes You may be able to deduct the cost of relocating to your new tax home as a moving expense. State taxes See Publication 521 for more information. State taxes Exception for federal crime investigations or prosecutions. State taxes   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. State taxes This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. State taxes   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. State taxes Determining temporary or indefinite. State taxes   You must determine whether your assignment is temporary or indefinite when you start work. State taxes If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. State taxes An assignment or job that is initially temporary may become indefinite due to changed circumstances. State taxes A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. State taxes Going home on days off. State taxes   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. State taxes You cannot deduct the cost of your meals and lodging there. State taxes However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. State taxes You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. State taxes   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. State taxes In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. State taxes Probationary work period. State taxes   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. State taxes You cannot deduct any of your expenses for meals and lodging during the probationary period. State taxes What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. State taxes You can deduct ordinary and necessary expenses you have when you travel away from home on business. State taxes The type of expense you can deduct depends on the facts and your circumstances. State taxes Table 26-1 summarizes travel expenses you may be able to deduct. State taxes You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. State taxes When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. State taxes You can use a log, diary, notebook, or any other written record to keep track of your expenses. State taxes The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. State taxes Separating costs. State taxes   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. State taxes You must have a reasonable basis for making this allocation. State taxes For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. State taxes Travel expenses for another individual. State taxes   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. State taxes Employee. State taxes   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. State taxes Business associate. State taxes   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. State taxes A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. State taxes A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. State taxes Bona fide business purpose. State taxes   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. State taxes Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. State taxes Example. State taxes Jerry drives to Chicago on business and takes his wife, Linda, with him. State taxes Linda is not Jerry's employee. State taxes Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. State taxes The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. State taxes Her expenses are not deductible. State taxes Jerry pays $199 a day for a double room. State taxes A single room costs $149 a day. State taxes He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. State taxes If he uses public transportation, he can deduct only his fare. State taxes Table 26-1. State taxes Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. State taxes IF you have expenses for. State taxes . State taxes . State taxes THEN you can deduct the cost of. State taxes . State taxes . State taxes transportation travel by airplane, train, bus, or car between your home and your business destination. State taxes If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. State taxes If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. State taxes taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. State taxes baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. State taxes car operating and maintaining your car when traveling away from home on business. State taxes You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. State taxes If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. State taxes lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. State taxes Meals include amounts spent for food, beverages, taxes, and related tips. State taxes See Meals and Incidental Expenses for additional rules and limits. State taxes cleaning dry cleaning and laundry. State taxes telephone business calls while on your business trip. State taxes This includes business communication by fax machine or other communication devices. State taxes tips tips you pay for any expenses in this chart. State taxes other other similar ordinary and necessary expenses related to your business travel. State taxes These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. State taxes Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. State taxes It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. State taxes The meal is business-related entertainment. State taxes Business-related entertainment is discussed under Entertainment Expenses , later. State taxes The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. State taxes Lavish or extravagant. State taxes   You cannot deduct expenses for meals that are lavish or extravagant. State taxes An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. State taxes Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. State taxes 50% limit on meals. State taxes   You can figure your meal expenses using either of the following methods. State taxes Actual cost. State taxes The standard meal allowance. State taxes Both of these methods are explained below. State taxes But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. State taxes   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. State taxes If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. State taxes The 50% limit is explained later under Entertainment Expenses . State taxes Accountable and nonaccountable plans are discussed later under Reimbursements . State taxes Actual cost. State taxes   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. State taxes If you use this method, you must keep records of your actual cost. State taxes Standard meal allowance. State taxes   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. State taxes It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. State taxes The set amount varies depending on where and when you travel. State taxes In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . State taxes If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. State taxes See Recordkeeping , later. State taxes Incidental expenses. State taxes   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. State taxes Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. State taxes Incidental expenses only method. State taxes   You can use an optional method (instead of actual cost) for deducting incidental expenses only. State taxes The amount of the deduction is $5 a day. State taxes You can use this method only if you did not pay or incur any meal expenses. State taxes You cannot use this method on any day that you use the standard meal allowance. State taxes    Federal employees should refer to the Federal Travel Regulations at  www. State taxes gsa. State taxes gov. State taxes Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. State taxes 50% limit may apply. State taxes   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. State taxes If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. State taxes The 50% limit is explained later under Entertainment Expenses . State taxes Accountable and nonaccountable plans are discussed later under Reimbursements . State taxes There is no optional standard lodging amount similar to the standard meal allowance. State taxes Your allowable lodging expense deduction is your actual cost. State taxes Who can use the standard meal allowance. State taxes   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. State taxes   Use of the standard meal allowance for other travel. State taxes    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. State taxes You can also use it to figure your meal expenses when you travel for qualifying educational purposes. State taxes You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. State taxes Amount of standard meal allowance. State taxes   The standard meal allowance is the federal M&IE rate. State taxes For travel in 2013, the daily rate for most small localities in the United States is $46. State taxes   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. State taxes You can find this information (organized by state) on the Internet at www. State taxes gsa. State taxes gov. State taxes Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. State taxes However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. State taxes You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. State taxes   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. State taxes If you work in the transportation industry, however, see Special rate for transportation workers , later. State taxes Standard meal allowance for areas outside the continental United States. State taxes    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. State taxes The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. State taxes S. State taxes Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. State taxes The Department of State establishes per diem rates for all other foreign areas. State taxes    You can access per diem rates for non-foreign areas outside the continental United States at: www. State taxes defensetravel. State taxes dod. State taxes mil/site/perdiemCalc. State taxes cfm. State taxes You can access all other foreign per diem rates at www. State taxes state. State taxes gov/travel/. State taxes Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. State taxes Special rate for transportation workers. State taxes   You can use a special standard meal allowance if you work in the transportation industry. State taxes You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. State taxes If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). State taxes   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. State taxes If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. State taxes Travel for days you depart and return. State taxes   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). State taxes You can do so by one of two methods. State taxes Method 1: You can claim 3/4 of the standard meal allowance. State taxes Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. State taxes Example. State taxes Jen is employed in New Orleans as a convention planner. State taxes In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. State taxes She left her home in New Orleans at 10 a. State taxes m. State taxes on Wednesday and arrived in Washington, DC, at 5:30 p. State taxes m. State taxes After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. State taxes m. State taxes Jen's employer gave her a flat amount to cover her expenses and included it with her wages. State taxes Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. State taxes Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. State taxes For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. State taxes Travel in the United States The following discussion applies to travel in the United States. State taxes For this purpose, the United States includes only the 50 states and the District of Columbia. State taxes The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. State taxes See Part of Trip Outside the United States , later. State taxes Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. State taxes If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. State taxes These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. State taxes Example. State taxes You work in Atlanta and take a business trip to New Orleans in May. State taxes On your way home, you stop in Mobile to visit your parents. State taxes You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. State taxes If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. State taxes You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. State taxes The deduction for your meals is subject to the 50% limit on meals mentioned earlier. State taxes Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. State taxes However, you can deduct any expenses you have while at your destination that are directly related to your business. State taxes A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. State taxes The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. State taxes Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. State taxes For the part of your trip that is inside the United States, use the rules for travel in the United States. State taxes Travel outside the United States does not include travel from one point in the United States to another point in the United States. State taxes The following discussion can help you determine whether your trip was entirely within the United States. State taxes Public transportation. State taxes   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. State taxes Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . State taxes Example. State taxes You fly from New York to Puerto Rico with a scheduled stop in Miami. State taxes You return to New York nonstop. State taxes The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. State taxes Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. State taxes Private car. State taxes   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. State taxes Example. State taxes You travel by car from Denver to Mexico City and return. State taxes Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. State taxes The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. State taxes Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. State taxes For this purpose, the United States includes only the 50 states and the District of Columbia. State taxes How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. State taxes See chapter 1 of Publication 463 for information on luxury water travel. State taxes Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. State taxes Travel entirely for business. State taxes   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. State taxes Travel considered entirely for business. State taxes   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. State taxes Exception 1 - No substantial control. State taxes   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. State taxes The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. State taxes   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. State taxes    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . State taxes   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. State taxes    A self-employed person generally has substantial control over arranging business trips. State taxes Exception 2 - Outside United States no more than a week. State taxes   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. State taxes One week means 7 consecutive days. State taxes In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. State taxes Exception 3 - Less than 25% of time on personal activities. State taxes   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. State taxes For this purpose, count both the day your trip began and the day it ended. State taxes Exception 4 - Vacation not a major consideration. State taxes   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. State taxes Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. State taxes You can only deduct the business portion of your cost of getting to and from your destination. State taxes You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. State taxes These travel allocation rules are discussed in chapter 1 of Publication 463. State taxes You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. State taxes In those cases, you can deduct the total cost of getting to and from your destination. State taxes Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. State taxes If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. State taxes Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. State taxes You cannot deduct the travel expenses for your family. State taxes If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. State taxes Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. State taxes You can deduct your travel expenses only if your attendance is connected to your own trade or business. State taxes Convention agenda. State taxes   The convention agenda or program generally shows the purpose of the convention. State taxes You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. State taxes The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. State taxes Conventions held outside the North American area. State taxes    See chapter 1 of Publication 463 for information on conventions held outside the North American area. State taxes Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. State taxes You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. State taxes Directly-related test. State taxes Associated test. State taxes Both of these tests are explained in chapter 2 of Publication 463. State taxes The amount you can deduct for entertainment expenses may be limited. State taxes Generally, you can deduct only 50% of your unreimbursed entertainment expenses. State taxes This limit is discussed next. State taxes 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. State taxes (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. State taxes See Individuals subject to “hours of service” limits , later. State taxes ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. State taxes Figure 26-A summarizes the general rules explained in this section. State taxes The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. State taxes Included expenses. State taxes   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. State taxes However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. State taxes Application of 50% limit. State taxes   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. State taxes   The 50% limit also applies to certain meal and entertainment expenses that are not business related. State taxes It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. State taxes It also applies to the cost of meals included in deductible educational expenses. State taxes When to apply the 50% limit. State taxes   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. State taxes You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. State taxes Example 1. State taxes You spend $200 for a business-related meal. State taxes If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. State taxes Your deduction cannot be more than $45 (. State taxes 50 × $90). State taxes Example 2. State taxes You purchase two tickets to a concert and give them to a client. State taxes You purchased the tickets through a ticket agent. State taxes You paid $200 for the two tickets, which had a face value of $80 each ($160 total). State taxes Your deduction cannot be more than $80 (. State taxes 50 × $160). State taxes Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. State taxes Figure 26-A can help you determine if the 50% limit applies to you. State taxes Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. State taxes Employee's reimbursed expenses. State taxes   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. State taxes Accountable plans are discussed later under Reimbursements . State taxes Individuals subject to “hours of service” limits. State taxes   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. State taxes The percentage is 80%. State taxes   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. State taxes Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. State taxes Interstate truck operators and bus drivers who are under Department of Transportation regulations. State taxes Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. State taxes Certain merchant mariners who are under Coast Guard regulations. State taxes Other exceptions. State taxes   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. State taxes These are discussed in Publication 463. State taxes Figure 26-A. State taxes Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. State taxes See Exceptions to the 50% Limit . State taxes Please click here for the text description of the image. State taxes Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. State taxes Entertainment. State taxes    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. State taxes Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. State taxes A meal as a form of entertainment. State taxes   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. State taxes A meal expense includes the cost of food, beverages, taxes, and tips for the meal. State taxes To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. State taxes You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. State taxes Separating costs. State taxes   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. State taxes You must have a reasonable basis for making this allocation. State taxes For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. State taxes Taking turns paying for meals or entertainment. State taxes   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. State taxes Lavish or extravagant expenses. State taxes   You cannot deduct expenses for entertainment that are lavish or extravagant. State taxes An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. State taxes Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. State taxes Trade association meetings. State taxes    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. State taxes These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. State taxes Entertainment tickets. State taxes   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. State taxes For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. State taxes What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. State taxes Club dues and membership fees. State taxes   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. State taxes This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. State taxes   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. State taxes You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. State taxes Entertainment facilities. State taxes   Generally, you cannot deduct any expense for the use of an entertainment facility. State taxes This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. State taxes   An entertainment facility is any property you own, rent, or use for entertainment. State taxes Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. State taxes Out-of-pocket expenses. State taxes   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. State taxes These are not expenses for the use of an entertainment facility. State taxes However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. State taxes Additional information. State taxes   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. State taxes Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. State taxes This section explains the limits and rules for deducting the costs of gifts. State taxes $25 limit. State taxes   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. State taxes A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. State taxes   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. State taxes This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. State taxes   If you and your spouse both give gifts, both of you are treated as one taxpayer. State taxes It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. State taxes If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. State taxes Incidental costs. State taxes   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. State taxes   A cost is incidental only if it does not add substantial value to the gift. State taxes For example, the cost of customary gift wrapping is an incidental cost. State taxes However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. State taxes Exceptions. State taxes   The following items are not considered gifts for purposes of the $25 limit. State taxes An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. State taxes Examples include pens, desk sets, and plastic bags and cases. State taxes Signs, display racks, or other promotional material to be used on the business premises of the recipient. State taxes Gift or entertainment. State taxes   Any item that might be considered either a gift or entertainment generally will be considered entertainment. State taxes However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. State taxes    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. State taxes You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. State taxes    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. State taxes You cannot choose, in this case, to treat the cost of the tickets as a gift expense. State taxes Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . State taxes These expenses include the cost of transportation by air, rail, bus, taxi, etc. State taxes , and the cost of driving and maintaining your car. State taxes Transportation expenses include the ordinary and necessary costs of all of the following. State taxes Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. State taxes (Tax home is defined earlier under Travel Expenses . State taxes ) Visiting clients or customers. State taxes Going to a business meeting away from your regular workplace. State taxes Getting from your home to a temporary workplace when you have one or more regular places of work. State taxes These temporary workplaces can be either within the area of your tax home or outside that area. State taxes Transportation expenses do not include expenses you have while traveling away from home overnight. State taxes Those expenses are travel expenses, discussed earlier. State taxes However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. State taxes See Car Expenses , later. State taxes Illustration of transportation expenses. State taxes    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. State taxes You may want to refer to it when deciding whether you can deduct your transportation expenses. State taxes Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. State taxes However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. State taxes Temporary work location. State taxes   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. State taxes   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. State taxes   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. State taxes   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. State taxes It will not be treated as temporary after the date you determine it will last more than 1 year. State taxes   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. State taxes You may have deductible travel expenses as discussed earlier in this chapter. State taxes No regular place of work. State taxes   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. State taxes   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. State taxes   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. State taxes These are nondeductible commuting expenses. State taxes Two places of work. State taxes   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. State taxes However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. State taxes   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. State taxes You cannot deduct them. State taxes Armed Forces reservists. State taxes   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. State taxes You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. State taxes   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. State taxes In this case, your transportation generally is a nondeductible commuting expense. State taxes However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. State taxes   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. State taxes   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. State taxes These expenses are discussed earlier under Travel Expenses . State taxes   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. State taxes See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. State taxes Commuting expenses. State taxes   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. State taxes These costs are personal commuting expenses. State taxes You cannot deduct commuting expenses no matter how far your home is from your regular place of work. State taxes You cannot deduct commuting expenses even if you work during the commuting trip. State taxes Example. State taxes You sometimes use your cell phone to make business calls while commuting to and from work. State taxes Sometimes business associates ride with you to and from work, and you have a business discussion in the car. State taxes These activities do not change the trip from personal to business. State taxes You cannot deduct your commuting expenses. State taxes Parking fees. State taxes   Fees you pay to park your car at your place of business are nondeductible commuting expenses. State taxes You can, however, deduct business-related parking fees when visiting a customer or client. State taxes Advertising display on car. State taxes   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. State taxes If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. State taxes Car pools. State taxes   You cannot deduct the cost of using your car in a nonprofit car pool. State taxes Do not include payments you receive from the passengers in your income. State taxes These payments are considered reimbursements of your expenses. State taxes However, if you operate a car pool for a profit, you must include payments from passengers in your income. State taxes You can then deduct your car expenses (using the rules in this chapter). State taxes Hauling tools or instruments. State taxes   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. State taxes However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). State taxes Union members' trips from a union hall. State taxes   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. State taxes Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. State taxes Office in the home. State taxes   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. State taxes (See chapter 28 for information on determining if your home office qualifies as a principal place of business. State taxes ) Figure 26-B. State taxes When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. State taxes (Do not use this chart if your home is your principal place of business. State taxes See Office in the home . State taxes ) Please click here for the text description of the image. State taxes Figure 26-B. State taxes Local Transportation Examples of deductible transportation. State taxes   The following examples show when you can deduct transportation expenses based on the location of your work and your home. State taxes Example 1. State taxes You regularly work in an office in the city where you live. State taxes Your employer sends you to a 1-week training session at a different office in the same city. State taxes You travel directly from your home to the training location and return each day. State taxes You can deduct the cost of your daily round-trip transportation between your home and the training location. State taxes Example 2. State taxes Your principal place of business is in your home. State taxes You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. State taxes Example 3. State taxes You have no regular office, and you do not have an office in your home. State taxes In this case, the location of your first business contact inside the metropolitan area is considered your office. State taxes Transportation expenses between your home and this first contact are nondeductible commuting expenses. State taxes Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. State taxes While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. State taxes With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. State taxes Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. State taxes You generally can use one of the two following methods to figure your deductible expenses. State taxes Standard mileage rate. State taxes Actual car expenses. State taxes If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. State taxes See Leasing a car under Actual Car Expenses, later. State taxes In this chapter, “car” includes a van, pickup, or panel truck. State taxes Rural mail carriers. State taxes   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. State taxes Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. State taxes   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). State taxes You must complete Form 2106 and attach it to your Form 1040. State taxes   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. State taxes It is given as an equipment maintenance allowance (EMA) to employees of the U. State taxes S. State taxes Postal Service. State taxes It is at the rate contained in the 1991 collective bargaining agreement. State taxes Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. State taxes See your employer for information on your reimbursement. State taxes If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. State taxes Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. State taxes For 2013, the standard mileage rate for business use is 56½ cents per mile. State taxes If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. State taxes You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. State taxes See Reimbursements under How To Report, later. State taxes Choosing the standard mileage rate. State taxes   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. State taxes Then in later years, you can choose to use either the standard mileage rate or actual expenses. State taxes   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. State taxes   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. State taxes You cannot revoke the choice. State taxes However, in a later year, you can switch from the standard mileage rate to the actual expenses method. State taxes If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. State taxes Example. State taxes Larry is an employee who occasionally uses his own car for business purposes. State taxes He purchased the car in 2011, but he did not claim any unreimburse