Tax Home vs. Personal Home

Did you know the fact your personal home is not your tax home is an income tax issue?  

How about this: business travel is different from business transportation.

Confused yet? Don’t worry, I’m here to clarify!

Your tax deductions, tax strategies, and tax records hinge on these federal income tax–defined terms:

  1. Personal home
  2. Tax home
  3. Business travel
  4. Business transportation

So, I know what you’re thinking. “What’s the difference?” I’m going to tell you.

Even though you probably don’t have an issue with your work deductions at the moment, I want to make sure you are aware of what could happen if you moved your business location or your personal home.


Personal Home →  this is where you live. Pretty basic.  

Tax Home → this is where you maintain your principal place of work

Business Travel → You are in tax-deductible travel status when you travel away from your tax home overnight or long enough to require sleep.

Business Transportation → You deduct business transportation as a cost of going to and from tax-deductible business destinations, whether in town our out of town, on overnight business travel. 

Five Good Things to Know:

  1. Have your personal home within 50 miles of your tax home.
  2. Once you do this, claim the home-office deduction under the administrative office rules. This will make you eliminate commuting to your outside-the-home office.
  3. Deduct overnight business travel when you travel on business outside the area of your tax home.
  4. If you have more than one business, the business where you spend the most time and make the most money is the principal business. It’s the location of your tax home. Overnight travel outside the tax-home area of the principal business to a secondary business is deductible. For example, if you have your principal office in Worcester, Massachusetts, you can deduct your overnight travel to your second business in New York City.
  5. If you have one business with multiple offices in different cities, the office where you spend the most time, do the most important things, and make the most money is your tax home. When you travel away from this office overnight to a secondary office, you are in business travel status.

This is one of those tax rules you might not have ever heard of, but you can use to your advantage. Make sure you know the difference to get the most out of your deductions!