![]() So this would likely be the ideal scenario. If this is true, then overnight travel outside a roughly 1.5-hour driving radius from your hometown would generally be considered business travel, and you should be able to count the recurring out-of-state assignment as business travel. There are specific tests to meet, but if you own/rent a home in a town in your “home state”, your family lives there, and you earn more in that town (say working a permanent job there as well) than in your other recurring assignment for the one week per month out of state, then your hometown will be what the IRS calls your “tax home”. ![]() This mainly boils down to what location/area is what the IRS calls your “tax home”, which is a very important concept with travel locum assignments and isn’t always what you’d call your hometown in everyday conversation. This can get detailed, but here’s a hopefully decent summary: However, it could still be considered business travel in the right circumstances. Your recurring one-week assignment is a single assignment. Would avoid potential time and money headaches down the road. But even if your 1099 didn’t specify the VA assignment income, I’d report it correctly. I’ve seen some 1099’s specify the assignment state’s income (meaning there would be an official record of the VA income) and other 1099’s that didn’t. Īs far as whether the assignment is reported to VA, it depends on the locum agency. Most all states follow these principles, with VA’s specific reporting info here if curious for a source. If you live in a state that also has an income tax, you should report the tax owed to VA on your home state’s tax return, and receive a reduction in the amount of tax owed to your home state (known as a state tax credit). If you worked an assignment in VA, then you report that assignment income to VA as a “nonresident” and will owe tax on it. Also, whatever tax you pay to CA for business income will offset what you owe to MA for the same business income (you don’t pay income tax to both states on the same dollar of income, thankfully!). Many states don’t require this so something to keep in mind. On making estimated payments to the states, your CA earnings should already have a 7% withholding for CA income tax (more on this here: ). If you paid an extra $1,000 in travel expenses by staying at a hotel instead of condo, you’d “save” $400 in taxes but are still in the hole $600 ($1,000 travel costs – $400 tax savings). For example, let’s say you paid 40% of tax on your business income, which means every dollar of extra business expense saves you $0.40. This said, it still makes sense to minimize actual expenses where possible. If you’re keeping up a residence in MA and still travel back some in between assignments, then your CA travel expenses are deductible.
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