Updated for IRS Publication 463 and Topic 511 — Last Reviewed August 2025
Become Our Featured Tax Expert.
This premium ad space is reserved for one tax professional. Put your firm in the spotlight and reach qualified USA leads directly.
To claim this exclusive spot, contact us at [email protected].
Understanding the “Away From Home” Rule in 2025
Under IRS Publication 463 and Topic 511, U.S. taxpayers may deduct ordinary and necessary travel expenses if they are considered to be “away from home” for work purposes. Being away from home means you are on a temporary assignment that requires you to sleep or rest away from your tax home. The tax home is generally the city or area of your main place of work, not your family residence.
- Meals and lodging while away for work can qualify.
- Transportation to and from the temporary work location may be deductible.
- Reimbursements under an accountable plan are non-taxable.
- Payments for a spouse or dependent’s travel are generally taxable.
The One-Year Test Explained
A key rule for determining if an assignment is temporary is the one-year test. If your work assignment is realistically expected to last more than one year at a single location, it is considered indefinite rather than temporary. In that case, you cannot deduct travel expenses because the IRS considers the new location your tax home.
If the assignment is less than a year, expenses may remain deductible, but if the assignment extends beyond one year, deductions generally stop at the point you know it will last longer than twelve months.
Temporary Assignments in 2025: What Counts
A temporary assignment is one that is realistically expected to last one year or less. This designation matters because:
- Travel expenses remain deductible.
- Employer reimbursements for qualified expenses are not taxable.
- If the assignment becomes indefinite, all future reimbursements are taxable as income.
IRS audits often review travel and reimbursement claims closely. Keeping mileage logs, lodging receipts, and employer reimbursement records is critical for compliance.
Reimbursements: Taxable or Non-Taxable?
Whether your reimbursements are taxable depends on whether your employer uses an accountable plan:
- Accountable Plan: You substantiate expenses with receipts, and excess reimbursements are returned. These are not taxable.
- Non-Accountable Plan: Payments are included in wages and subject to income tax and employment taxes.
Become Our Featured Tax Expert.
This premium ad space is reserved for one tax professional. Put your firm in the spotlight and reach qualified USA leads directly.
To claim this exclusive spot, contact us at [email protected].
Why These Rules Matter for Individual Taxpayers
Understanding the “away from home” rule, the one-year test, and the definition of temporary assignments is critical for U.S. taxpayers in 2025. Misclassifying your travel or misunderstanding the IRS rules could result in losing deductions or facing additional tax liability.
These rules impact:
- W-2 employees receiving travel reimbursements.
- Consultants and contractors working at temporary job sites.
- Remote workers asked to relocate temporarily for projects.
