What Is a Tax Home?

Your tax home is the location of your principal place of business or employment — not your personal residence — and it determines your eligibility to deduct away-from-home travel expenses. If you regularly work in a city and live in the suburbs, your tax home is where you work, and your commute is not deductible. When you travel away from your tax home overnight on business, you may be able to deduct transportation, lodging, and meal expenses. If you're temporarily assigned to work in another city for less than a year, your original location remains your tax home and you may deduct the temporary assignment's costs. But if the assignment extends to a year or longer (or is expected to), the new location becomes your tax home and those expenses are no longer deductible. For Americans living abroad, the concept of tax home is critical to qualifying for the foreign earned income exclusion, which requires your tax home to be in a foreign country.