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What makes housing and meal per diem deductible business expenses for you, so that you can deduct them on your tax return or receive them tax-free from your employer?
Basically, they need to qualify as a temporary living expense, which is in addition to your normal living expenses at your permanent home, while working away from your home. The tax law definition of “temporary” is less than 12 months, and your permanent home is called your “tax home”, which is “the place you return to on a regular basis to live and work, where you incur substantial and recurring expenses”.
Tax law does not provide a precise definition of “regular basis” or “substantial and recurring expenses”. In such cases, IRS depends on your individual “facts and circumstances” to determine if these requirements have been met.
Clearly, if you own a home, and live there for 9 months while working in the vicinity, you have a tax home; your temporary living expenses while away from that home are deductible, so you qualify for tax-free housing (if provided). Just as clearly, if you pay $35 per month for a storage unit in the vicinity of your traditional hometown, you do not have a tax home, and do not qualify for tax-free housing. Everything in between these 2 extremes depends on your individual “facts and circumstances”.
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