Mortgage will be paid off soon:)

NedRN · May 28, 2014

Yes..

raindrop · May 28, 2014

Ok, well I have tried researching this by IRS website and I am not having luck. I thought it wad a rule that you had to pay an X amount of money every month toward your "home" whether it be in rent/mortgage/taxes/utilities. My monthly expenses are going to be so cheap, so I wasnt sure if I will still eligible.

NedRN · May 28, 2014

There is nothing in IRS publications about x amount annual expenditures required to have a valid tax home. Theoretically, it could be zero. I could come up with several such hypothetical situations. In your case, you have a home with maintenance, utility, and tax costs. The actual amount is completely irrelevant. Your tax home status is completely solid after your debt is clear. You can still lose it depending on your actions, such as working over a year in the same general area, or taking steps consistent with abandonment such as changing your voter and driver's registration. But your fundamentals are solid.

raindrop · May 28, 2014

Thank u for clearing things up , Ned :) I suppose I couldn't find anything on it, because no such thing exists.

Say, Ned, not to hijack my thread...but I am confused about this whole thing about staying in the same place for a year or greater. Does this mean I cannot stay in the same state for a year, or just the same hospital and vicinity? If I do a year in Pittsburgh, and then a year in Philly, should things be ok?

NedRN · May 28, 2014

Same general area. If you can live in the same place and commute between those assignments (say halfway between), then that constitutes the same general area. That is just a rule of thumb, and it is fairly unlikely that an audit would delve so deep. TravelTax likes to refer to travelers who "circumnavigate" the same general area, for example the many who do just that in the San Francisco Bay area for years on end. Working in Oakland and San Francisco are the same general area. Pittsburgh and Philadelphia are not in the same general area but hours apart.

State lines are irrelevant. Let's say you are working in Philly and take a job across the river in Delaware. Same area. Breaks that some agencies use to determine tax advantage eligibility are also bogus, see example below for more.

Recurring assignments end up with a similar issue. Let's say you work for 9 months at a hospital, and go somewhere completely different for 3 months, and back at the first place for 9 months. That is your new tax home! Throw up a 12 month period there during that time frame and it is clear you have worked in the same general area for over a year. The safe rule of thumb is to not work in the same general area for more than 12 months in any one 24 month period.

All that said, it is possible to work in the same general area and still be OK. I work in the OR with call response required of typically 20 minutes. I could not do that across the Bay Bridge in San Francisco in the earlier example, but would have to live closer.

Some of this can be difficult to wrap your head around, and tricky if you have recurring assignments and several homes - then you need an expert for sure like TravelTax. The worst that can happen is that you will have to pay higher taxes on some assignments and that is not so bad on a good income. Better to pay (like if you are commuting from home to a nearby assignment) than taking a risk on paying back taxes, interest, and penalties later if you are caught in an audit.

raindrop · May 29, 2014

Thank u soo much. U r a Godsend.