Quote from jab3da
I guess I'll need to talk to a tax professional, but reading posts has me a bit scared as far as the housing stipend goes.... I was always under the impression that there was more money in traveling. It's not the only reason but I have a lot of student loans I don't want to drown in forever. Tax home...that's the issue. If I'm living with my parents for free I'm guessing that doesn't count. (Unfortunately I am still paying my half of rent on an apt my ex and I shared till August. I'd claim that as my residence, but its a different state and would void my compact license.) The hourly rates the recruiter went over aren't much more than I make now...like maybe a dollar. So will I just be screwed next year when taxes come around?? Does everyone really keep a house while traveling?? Doesn't that kind of void out all the extra money when you take the housing stipend? What am I missing here? I've heard there are completion bonuses but how often do those actually happen?
Maintaining a tax home versus being itinerant: Properly arranged, a tax home will save you money. If you are a homeowner, your capital investment may even increase in value. You can also have a roommate that may pay for most of your ongoing expenses, and this is legal as long as you can return at any time. Being itinerant can save you a lot of hassle with maintaining your tax home, and sometimes you can end up ahead financially if your costs would be greater than your tax savings.
Generally yes, travel pays more than staff. But consider that it is for the same reason as working per diem pays a higher rate. No sick time, no holidays, no vacation, laughable health insurance if any. You only get paid if you work. Travel is one peg up from per diem work, contracted hours and usually additional net pay due to tax savings.
If you have historically lived at home, that counts as a tax home if it continues to be your home, and you can return at any time, and do return regularly, and have strong ties to that home. The IRS actually gives greater weight to a tax home determination if you live with relatives. Some tax advisors recommend that you pay parents going rates for your tenancy (which would be relatively small as a shared residence), however that is ultra conservative. You are free to have any agreeable qui pro quo with your landlord by mutual agreement.
Tax home establishment and maintenance is not really subject to sound bite analysis (other than sometimes it is easy to see that your circumstances are a complete fail for a legitimate tax home), it is really a preponderance of evidence and you can increase the weighting of evidence by your actions, time frames, and how you travel.