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Tax returns 1. Tax returns   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Tax returns Business associate. Tax returns Bona fide business purpose. Tax returns Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Tax returns This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Tax returns It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Tax returns Travel expenses defined. Tax returns   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Tax returns   An ordinary expense is one that is common and accepted in your trade or business. Tax returns A necessary expense is one that is helpful and appropriate for your business. Tax returns An expense does not have to be required to be considered necessary. Tax returns   You will find examples of deductible travel expenses in Table 1-1 , later. Tax returns Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Tax returns This rest requirement is not satisfied by merely napping in your car. Tax returns You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Tax returns Example 1. Tax returns You are a railroad conductor. Tax returns You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Tax returns During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Tax returns You are considered to be away from home. Tax returns Example 2. Tax returns You are a truck driver. Tax returns You leave your terminal and return to it later the same day. Tax returns You get an hour off at your turnaround point to eat. Tax returns Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Tax returns Members of the Armed Forces. Tax returns   If you are a member of the U. Tax returns S. Tax returns Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Tax returns You cannot deduct your expenses for meals and lodging. Tax returns You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Tax returns If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Tax returns   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Tax returns Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Tax returns Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Tax returns It includes the entire city or general area in which your business or work is located. Tax returns If you have more than one regular place of business, your tax home is your main place of business. Tax returns See Main place of business or work , later. Tax returns If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Tax returns See No main place of business or work , later. Tax returns If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Tax returns As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Tax returns Main place of business or work. Tax returns   If you have more than one place of work, consider the following when determining which one is your main place of business or work. Tax returns The total time you ordinarily spend in each place. Tax returns The level of your business activity in each place. Tax returns Whether your income from each place is significant or insignificant. Tax returns Example. Tax returns You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Tax returns You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Tax returns Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Tax returns No main place of business or work. Tax returns   You may have a tax home even if you do not have a regular or main place of work. Tax returns Your tax home may be the home where you regularly live. Tax returns Factors used to determine tax home. Tax returns   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Tax returns You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Tax returns You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Tax returns You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Tax returns   If you satisfy all three factors, your tax home is the home where you regularly live. Tax returns If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Tax returns If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Tax returns Example 1. Tax returns You are single and live in Boston in an apartment you rent. Tax returns You have worked for your employer in Boston for a number of years. Tax returns Your employer enrolls you in a 12-month executive training program. Tax returns You do not expect to return to work in Boston after you complete your training. Tax returns During your training, you do not do any work in Boston. Tax returns Instead, you receive classroom and on-the-job training throughout the United States. Tax returns You keep your apartment in Boston and return to it frequently. Tax returns You use your apartment to conduct your personal business. Tax returns You also keep up your community contacts in Boston. Tax returns When you complete your training, you are transferred to Los Angeles. Tax returns You do not satisfy factor (1) because you did not work in Boston. Tax returns You satisfy factor (2) because you had duplicate living expenses. Tax returns You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Tax returns Therefore, you have a tax home in Boston. Tax returns Example 2. Tax returns You are an outside salesperson with a sales territory covering several states. Tax returns Your employer's main office is in Newark, but you do not conduct any business there. Tax returns Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Tax returns You have a room in your married sister's house in Dayton. Tax returns You stay there for one or two weekends a year, but you do no work in the area. Tax returns You do not pay your sister for the use of the room. Tax returns You do not satisfy any of the three factors listed earlier. Tax returns You are an itinerant and have no tax home. Tax returns Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Tax returns You also cannot deduct the cost of meals and lodging while at your tax home. Tax returns See Example 1 , later. Tax returns If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Tax returns See Example 2 , later. Tax returns Example 1. Tax returns You are a truck driver and you and your family live in Tucson. Tax returns You are employed by a trucking firm that has its terminal in Phoenix. Tax returns At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Tax returns You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Tax returns This is because Phoenix is your tax home. Tax returns Example 2. Tax returns Your family home is in Pittsburgh, where you work 12 weeks a year. Tax returns The rest of the year you work for the same employer in Baltimore. Tax returns In Baltimore, you eat in restaurants and sleep in a rooming house. Tax returns Your salary is the same whether you are in Pittsburgh or Baltimore. Tax returns Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Tax returns You cannot deduct any expenses you have for meals and lodging there. Tax returns However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Tax returns You can deduct the cost of your round trip between Baltimore and Pittsburgh. Tax returns You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Tax returns Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Tax returns It may not be practical to return to your tax home from this other location at the end of each work day. Tax returns Temporary assignment vs. Tax returns indefinite assignment. Tax returns   If your assignment or job away from your main place of work is temporary, your tax home does not change. Tax returns You are considered to be away from home for the whole period you are away from your main place of work. Tax returns You can deduct your travel expenses if they otherwise qualify for deduction. Tax returns Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Tax returns    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Tax returns An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Tax returns   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Tax returns You may be able to deduct the cost of relocating to your new tax home as a moving expense. Tax returns See Publication 521 for more information. Tax returns Exception for federal crime investigations or prosecutions. Tax returns   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Tax returns This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Tax returns   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Tax returns Determining temporary or indefinite. Tax returns   You must determine whether your assignment is temporary or indefinite when you start work. Tax returns If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Tax returns An assignment or job that is initially temporary may become indefinite due to changed circumstances. Tax returns A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Tax returns   The following examples illustrate whether an assignment or job is temporary or indefinite. Tax returns Example 1. Tax returns You are a construction worker. Tax returns You live and regularly work in Los Angeles. Tax returns You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Tax returns Your tax home is Los Angeles. Tax returns Because of a shortage of work, you took a job on a construction project in Fresno. Tax returns Your job was scheduled to end in 8 months. Tax returns The job actually lasted 10 months. Tax returns You realistically expected the job in Fresno to last 8 months. Tax returns The job actually did last less than 1 year. Tax returns The job is temporary and your tax home is still in Los Angeles. Tax returns Example 2. Tax returns The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Tax returns The job actually was completed in 10 months. Tax returns Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Tax returns You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Tax returns Example 3. Tax returns The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Tax returns After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Tax returns Initially, you realistically expected the job in Fresno to last for only 9 months. Tax returns However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Tax returns You can only deduct your travel expenses for the first 8 months. Tax returns You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Tax returns Going home on days off. Tax returns   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Tax returns You cannot deduct the cost of your meals and lodging there. Tax returns However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Tax returns You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Tax returns   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Tax returns In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Tax returns Probationary work period. Tax returns   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Tax returns You cannot deduct any of your expenses for meals and lodging during the probationary period. Tax returns What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Tax returns You can deduct ordinary and necessary expenses you have when you travel away from home on business. Tax returns The type of expense you can deduct depends on the facts and your circumstances. Tax returns Table 1-1 summarizes travel expenses you may be able to deduct. Tax returns You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Tax returns When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Tax returns You can use a log, diary, notebook, or any other written record to keep track of your expenses. Tax returns The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Tax returns Separating costs. Tax returns   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Tax returns You must have a reasonable basis for making this allocation. Tax returns For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Tax returns Travel expenses for another individual. Tax returns    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Tax returns Employee. Tax returns   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Tax returns Business associate. Tax returns   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Tax returns A business associate is someone with whom you could reasonably expect to actively conduct business. Tax returns A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Tax returns Bona fide business purpose. Tax returns   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Tax returns Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Tax returns Table 1-1. Tax returns Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax returns IF you have expenses for. Tax returns . Tax returns . Tax returns THEN you can deduct the cost of. Tax returns . Tax returns . Tax returns transportation travel by airplane, train, bus, or car between your home and your business destination. Tax returns If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Tax returns If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Tax returns taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Tax returns baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Tax returns car operating and maintaining your car when traveling away from home on business. Tax returns You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Tax returns If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Tax returns lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Tax returns Meals include amounts spent for food, beverages, taxes, and related tips. Tax returns See Meals for additional rules and limits. Tax returns cleaning dry cleaning and laundry. Tax returns telephone business calls while on your business trip. Tax returns This includes business communication by fax machine or other communication devices. Tax returns tips tips you pay for any expenses in this chart. Tax returns other other similar ordinary and necessary expenses related to your business travel. Tax returns These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Tax returns Example. Tax returns Jerry drives to Chicago on business and takes his wife, Linda, with him. Tax returns Linda is not Jerry's employee. Tax returns Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Tax returns The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Tax returns Her expenses are not deductible. Tax returns Jerry pays $199 a day for a double room. Tax returns A single room costs $149 a day. Tax returns He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Tax returns If he uses public transportation, he can deduct only his fare. Tax returns Meals You can deduct the cost of meals in either of the following situations. Tax returns It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Tax returns The meal is business-related entertainment. Tax returns Business-related entertainment is discussed in chapter 2 . Tax returns The following discussion deals only with meals that are not business-related entertainment. Tax returns Lavish or extravagant. Tax returns   You cannot deduct expenses for meals that are lavish or extravagant. Tax returns An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Tax returns Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Tax returns 50% limit on meals. Tax returns   You can figure your meals expense using either of the following methods. Tax returns Actual cost. Tax returns The standard meal allowance. Tax returns Both of these methods are explained below. Tax returns But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Tax returns   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Tax returns If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Tax returns Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Tax returns Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Tax returns If you use this method, you must keep records of your actual cost. Tax returns Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Tax returns It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Tax returns The set amount varies depending on where and when you travel. Tax returns In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Tax returns If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Tax returns See the recordkeeping rules for travel in chapter 5 . Tax returns Incidental expenses. Tax returns   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Tax returns   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Tax returns Incidental-expenses-only method. Tax returns   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Tax returns The amount of the deduction is $5 a day. Tax returns You can use this method only if you did not pay or incur any meal expenses. Tax returns You cannot use this method on any day that you use the standard meal allowance. Tax returns This method is subject to the proration rules for partial days. Tax returns See Travel for days you depart and return , later in this chapter. Tax returns Note. Tax returns The incidental-expenses-only method is not subject to the 50% limit discussed below. Tax returns Federal employees should refer to the Federal Travel Regulations at www. Tax returns gsa. Tax returns gov. Tax returns Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Tax returns 50% limit may apply. Tax returns   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Tax returns If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Tax returns The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Tax returns There is no optional standard lodging amount similar to the standard meal allowance. Tax returns Your allowable lodging expense deduction is your actual cost. Tax returns Who can use the standard meal allowance. Tax returns   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Tax returns Use of the standard meal allowance for other travel. Tax returns   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Tax returns You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Tax returns You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Tax returns Amount of standard meal allowance. Tax returns   The standard meal allowance is the federal M&IE rate. Tax returns For travel in 2013, the rate for most small localities in the United States is $46 a day. Tax returns    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Tax returns    You can find this information (organized by state) on the Internet at www. Tax returns gsa. Tax returns gov/perdiem. Tax returns Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Tax returns Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Tax returns ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Tax returns You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Tax returns   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Tax returns If you work in the transportation industry, however, see Special rate for transportation workers , later. Tax returns Standard meal allowance for areas outside the continental United States. Tax returns   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Tax returns The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Tax returns S. Tax returns Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Tax returns The Department of State establishes per diem rates for all other foreign areas. Tax returns    You can access per diem rates for non-foreign areas outside the continental United States at: www. Tax returns defensetravel. Tax returns dod. Tax returns mil/site/perdiemCalc. Tax returns cfm. Tax returns You can access all other foreign per diem rates at: www. Tax returns state. Tax returns gov/travel/. Tax returns Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Tax returns Special rate for transportation workers. Tax returns   You can use a special standard meal allowance if you work in the transportation industry. Tax returns You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Tax returns If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Tax returns   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Tax returns If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Tax returns Travel for days you depart and return. Tax returns   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Tax returns You can do so by one of two methods. Tax returns Method 1: You can claim 3/4 of the standard meal allowance. Tax returns Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Tax returns Example. Tax returns Jen is employed in New Orleans as a convention planner. Tax returns In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Tax returns She left her home in New Orleans at 10 a. Tax returns m. Tax returns on Wednesday and arrived in Washington, DC, at 5:30 p. Tax returns m. Tax returns After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Tax returns m. Tax returns Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Tax returns Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Tax returns Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Tax returns For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Tax returns Travel in the United States The following discussion applies to travel in the United States. Tax returns For this purpose, the United States includes the 50 states and the District of Columbia. Tax returns The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Tax returns See Part of Trip Outside the United States , later. Tax returns Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Tax returns If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. Tax returns These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Tax returns Example. Tax returns You work in Atlanta and take a business trip to New Orleans in May. Tax returns Your business travel totals 850 miles round trip. Tax returns On your way, you stop in Mobile to visit your parents. Tax returns You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Tax returns If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Tax returns You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Tax returns The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Tax returns Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Tax returns However, you can deduct any expenses you have while at your destination that are directly related to your business. Tax returns A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Tax returns The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Tax returns Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Tax returns For the part of your trip that is inside the United States, use the rules for travel in the United States. Tax returns Travel outside the United States does not include travel from one point in the United States to another point in the United States. Tax returns The following discussion can help you determine whether your trip was entirely within the United States. Tax returns Public transportation. Tax returns   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Tax returns Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Tax returns Example. Tax returns You fly from New York to Puerto Rico with a scheduled stop in Miami. Tax returns You return to New York nonstop. Tax returns The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Tax returns Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Tax returns Private car. Tax returns   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Tax returns Example. Tax returns You travel by car from Denver to Mexico City and return. Tax returns Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Tax returns The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Tax returns Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Tax returns For this purpose, the United States includes the 50 states and the District of Columbia. Tax returns How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Tax returns Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Tax returns Travel entirely for business. Tax returns   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Tax returns Travel considered entirely for business. Tax returns   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Tax returns Exception 1 - No substantial control. Tax returns   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Tax returns The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Tax returns   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Tax returns    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Tax returns   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Tax returns   A self-employed person generally has substantial control over arranging business trips. Tax returns Exception 2 - Outside United States no more than a week. Tax returns   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Tax returns One week means 7 consecutive days. Tax returns In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Tax returns Example. Tax returns You traveled to Brussels primarily for business. Tax returns You left Denver on Tuesday and flew to New York. Tax returns On Wednesday, you flew from New York to Brussels, arriving the next morning. Tax returns On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Tax returns You flew back to New York, arriving Wednesday afternoon. Tax returns On Thursday, you flew back to Denver. Tax returns Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Tax returns This is because the day you depart does not count as a day outside the United States. Tax returns You can deduct your cost of the round-trip flight between Denver and Brussels. Tax returns You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Tax returns However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Tax returns Exception 3 - Less than 25% of time on personal activities. Tax returns   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Tax returns For this purpose, count both the day your trip began and the day it ended. Tax returns Example. Tax returns You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Tax returns You then flew back to Seattle. Tax returns You spent 1 day flying in each direction. Tax returns Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Tax returns The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Tax returns Exception 4 - Vacation not a major consideration. Tax returns   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Tax returns Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Tax returns You can only deduct the business portion of your cost of getting to and from your destination. Tax returns You must allocate the costs between your business and other activities to determine your deductible amount. Tax returns See Travel allocation rules , later. Tax returns You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Tax returns In those cases, you can deduct the total cost of getting to and from your destination. Tax returns Travel allocation rules. Tax returns   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Tax returns The days you depart from and return to the United States are both counted as days outside the United States. Tax returns   To figure the deductible amount of your round-trip travel expenses, use the following fraction. Tax returns The numerator (top number) is the total number of business days outside the United States. Tax returns The denominator (bottom number) is the total number of business and nonbusiness days of travel. Tax returns Counting business days. Tax returns   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Tax returns Transportation day. Tax returns   Count as a business day any day you spend traveling to or from a business destination. Tax returns However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Tax returns Extra days for side trips or nonbusiness activities cannot be counted as business days. Tax returns Presence required. Tax returns   Count as a business day any day your presence is required at a particular place for a specific business purpose. Tax returns Count it as a business day even if you spend most of the day on nonbusiness activities. Tax returns Day spent on business. Tax returns   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Tax returns Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Tax returns Certain weekends and holidays. Tax returns   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Tax returns But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Tax returns Example 1. Tax returns Your tax home is New York City. Tax returns You travel to Quebec, where you have a business appointment on Friday. Tax returns You have another appointment on the following Monday. Tax returns Because your presence was required on both Friday and Monday, they are business days. Tax returns Because the weekend is between business days, Saturday and Sunday are counted as business days. Tax returns This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Tax returns Example 2. Tax returns If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Tax returns Nonbusiness activity on the way to or from your business destination. Tax returns   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax returns   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Tax returns   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax returns The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax returns Example. Tax returns You live in New York. Tax returns On May 4 you flew to Paris to attend a business conference that began on May 5. Tax returns The conference ended at noon on May 14. Tax returns That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Tax returns The primary purpose for the trip was to attend the conference. Tax returns If you had not stopped in Dublin, you would have arrived home the evening of May 14. Tax returns You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Tax returns May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Tax returns You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Tax returns You cannot deduct your expenses while in Dublin. Tax returns You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Tax returns You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Tax returns Round-trip airfare from New York to Dublin would have been $1,250. Tax returns You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Tax returns Your deductible air travel expense is $1,364 ($1,850 − $486). Tax returns Nonbusiness activity at, near, or beyond business destination. Tax returns   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax returns   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Tax returns   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax returns The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax returns   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Tax returns Example. Tax returns Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Tax returns You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Tax returns In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Tax returns You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Tax returns (Assume these expenses total $4,939. Tax returns ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Tax returns Other methods. Tax returns   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Tax returns Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Tax returns However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Tax returns Example. Tax returns The university from which you graduated has a continuing education program for members of its alumni association. Tax returns This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Tax returns However, none of the conferences are directed toward specific occupations or professions. Tax returns It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Tax returns Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Tax returns These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Tax returns Professional conference directors schedule and conduct the sessions. Tax returns Participants can choose those sessions they wish to attend. Tax returns You can participate in this program since you are a member of the alumni association. Tax returns You and your family take one of the trips. Tax returns You spend about 2 hours at each of the planned sessions. Tax returns The rest of the time you go touring and sightseeing with your family. Tax returns The trip lasts less than 1 week. Tax returns Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Tax returns However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Tax returns These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Tax returns Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Tax returns The limit is twice the highest federal per diem rate allowable at the time of your travel. Tax returns (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Tax returns ) Daily limit on luxury water travel. Tax returns   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Tax returns   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. Tax returns 1 – Mar. Tax returns 31 $367 $734   Apr. Tax returns 1 – June 30 312 624   July 1 – Aug. Tax returns 31 310 620   Sept. Tax returns 1 – Sept. Tax returns 30 366 732   Oct. Tax returns 1 – Dec. Tax returns 31 374 748 Example. Tax returns Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Tax returns Her expense for the 6-day cruise was $5,200. Tax returns Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Tax returns Meals and entertainment. Tax returns   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Tax returns For a discussion of the 50% Limit , see chapter 2. Tax returns Example. Tax returns In the previous example, Caroline's luxury water travel had a total cost of $5,200. Tax returns Of that amount, $3,700 was separately stated as meals and entertainment. Tax returns Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Tax returns Caroline figures her deductible travel expenses as follows. Tax returns Meals and entertainment $3,700   50% limit × . Tax returns 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Tax returns Not separately stated. Tax returns   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Tax returns Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Tax returns See Cruise Ships under Conventions. Tax returns Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Tax returns You cannot deduct the travel expenses for your family. Tax returns If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Tax returns Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Tax returns You can deduct your travel expenses only if your attendance is connected to your own trade or business. Tax returns Convention agenda. Tax returns   The convention agenda or program generally shows the purpose of the convention. Tax returns You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Tax returns The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Tax returns Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Tax returns See Reasonableness test , later. Tax returns If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Tax returns North American area. Tax returns   The North American area includes the following locations. Tax returns American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Tax returns S. Tax returns Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. Tax returns S. Tax returns islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Tax returns Reasonableness test. Tax returns   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Tax returns The purpose of the meeting and the activities taking place at the meeting. Tax returns The purposes and activities of the sponsoring organizations or groups. Tax returns The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Tax returns Other relevant factors you may present. Tax returns Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Tax returns All ships that sail are considered cruise ships. Tax returns You can deduct these expenses only if all of the following requirements are met. Tax returns The convention, seminar, or meeting is directly related to your trade or business. Tax returns The cruise ship is a vessel registered in the United States. Tax returns All of the cruise ship's ports of call are in the United States or in possessions of the United States. Tax returns You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Tax returns You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Tax returns Prev  Up  Next   Home   More Online Publications
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Procurement

Procurement At-a-Glance - Our dedicated acquisition professionals deliver world class, customer-focused acquisition services with the highest degree of integrity and the cooperative effort of our partners.


Small Business Program Office - The Internal Revenue Service (IRS) Small Business Program Office was established to assist small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small and service disabled veteran-owned small businesses, to develop, grow, and ensure their long-term success.


Procurement Business Opportunities - The Procurement Office acquires the products and services required to support the IRS mission. We advertise commercial opportunities on Federal Business Opportunities (FedBizOpps) web site.


Justification for Other Than Full and Open Competition (JOFOC) - All open market JOFOCs exceeding the Simplified Acquisition Threshold (SAT) are posted on this web site in addition to being advertised on the Federal Business Opportunities (FedBizOpps) web site. (Some information may have been redacted to exclude proprietary information).


The American Recovery and Reinvestment Act of 2009 - The American Recovery and Reinvestment Act of 2009 (ARRA) – Approved on February 17, 2009, ARRA primarily provides supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization. Hyperlinks to various procurement actions awarded using ARRA funds are included herein.

What's New at Procurement



11/01/2013JEFO - Renewal of Maintenance for Net App Mass Storage equipment in support of the SOI Program



09/26/2013 Post-Award Posting of JOFOC TIRSE-14-P-00003-Utilities



09/06/2013
Justification for an Exception to Fair Opportunity



08/22/2013
Solicitation No: D-3-D9-23-MA-I10 – Neopost Postage Meter Supplies



08/19/2013 TIRNO-13-C-00055 JOFOC Post Award

 

 

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Contractor Security - Contract employees assigned to work under IRS contracts must undergo investigative processing appropriate to the position sensitivity and risk level designation associated with the work to be performed, as described in the Department of the Treasury Security Manual (TD P 15-71). In support of this undertaking, the contractor shall furnish prescribed security forms and documentation to the Contractor Security Lifecycle Program (CSLP), within 10 business days of assigning (or reassigning) a contractor employee to an IRS contract and prior to the contract employee performing any work there under.


Publication 4812 - Contractor Security Controls - Functions as the standard for security controls to be employed by contractors who will have or need access to IRS information, and/or who will have or need access to, maintain or operate IRS information systems in order to perform or carry out and meet their contractual obligations. Publication 4812 is a &quotlayperson's guide&quot to NIST SP 800-53 when access to IRS information or information systems under contracts for services on behalf of the IRS is outside of IRS controlled facilities or the direct control of the Service (as opposed to Internal Revenue Manual 10.8.1 - Information Technology (IT) Security, Policy and Guidance, which applies when contractors are accessing IRS information and information systems at Government controlled facilities).


Contracts - Information about the Prime Modernization Contract and Prime Contract Outreach Information. Treasury-Wide Contracts ( Total Information Processing Support Services (TIPSS-4), and Treasury Commercial Vehicles (TCV) Blanket Purchase Agreements). Government-Wide Contracts Land Mobile Radio (LMR) Subscriber Unit.


Total Information Processing Support Services (TIPSS-4) - Discover more about the wide spectrum of Information Technology services that TIPSS-4 offers. Included you will find guidance, and useful information to help you acquire the right services to support your program goals and objectives.


Treasury Acquisition Institute (TAI) Training - The Treasury Acquisition Institute (TAI) was established by the Department of the Treasury and Internal Revenue Service in partnerships with other Treasury Bureaus on September 14, 1983. TAI was created to coordinate and lead Departmental and Bureau efforts to obtain the best training possible for their acquisition professionals.


Guides for Doing Business with the Government - Information on how to do business with the Federal Government.


Treasury Inspector General for Tax Administration (TIGTA) FAR Contractor Reporting - This link allows contractors to comply with the reporting requirements in the December 12, 2008, Federal Acquisition Regulation final rule. Specifically, contractors must use this process to satisfy the requirement that they notify TIGTA, in writing, whenever the contractor has credible evidence that a principal, employee, agent, or subcontractor of the Contractor has committed a violation of the civil False Claims Act or a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations in connection with the award, performance, or closeout of a contract or any related subcontract.


Useful Links - Links to various sites.


Procurement A..Z Index - Search for Procurement information alphabetically.



Questions about the Procurement information on this site, please contact the webmaster.


Contact the Office of Procurement for other Procurement related questions.

Page Last Reviewed or Updated: 19-Feb-2014

The Tax Returns

Tax returns 2. Tax returns   Withholding Tax Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Income Tax Withholding Statement. Tax returns 30% Flat Rate Withholding Social Security and Medicare TaxesGeneral Information Bilateral Social Security (Totalization) Agreements Topics - This chapter discusses: Withholding income tax from the pay of U. Tax returns S. Tax returns citizens, Withholding tax at a flat rate, and Social security and Medicare taxes. Tax returns Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 673 Statement For Claiming Exemption From Withholding on Foreign Earned Income Eligible for the Exclusion Provided by Section 911 W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification See chapter 7 for information about getting this publication and these forms. Tax returns Income Tax Withholding U. Tax returns S. Tax returns employers generally must withhold U. Tax returns S. Tax returns income tax from the pay of U. Tax returns S. Tax returns citizens working abroad unless the employer is required by foreign law to withhold foreign income tax. Tax returns Foreign earned income exclusion. Tax returns   Your employer does not have to withhold U. Tax returns S. Tax returns income taxes from wages you earn abroad if it is reasonable to believe that you will exclude them from income under the foreign earned income exclusion or the foreign housing exclusion. Tax returns   Your employer should withhold taxes from any wages you earn for working in the United States. Tax returns Statement. Tax returns   You can give a statement to your employer indicating that you expect to qualify for the foreign earned income exclusion under either the bona fide residence test or the physical presence test and indicating your estimated housing cost exclusion. Tax returns   Form 673 is an acceptable statement. Tax returns You can use Form 673 only if you are a U. Tax returns S. Tax returns citizen. Tax returns You do not have to use the form. Tax returns You can prepare your own statement. Tax returns See a copy of Form 673, later. Tax returns   Generally, your employer can stop the withholding once you submit the statement that includes a declaration that the statement is made under penalties of perjury. Tax returns However, if your employer has reason to believe that you will not qualify for either the foreign earned income or the foreign housing exclusion, your employer must continue to withhold. Tax returns   In determining whether your foreign earned income is more than the limit on either the foreign earned income exclusion or the foreign housing exclusion, if your employer has any information about pay you received from any other source outside the United States, your employer must take that information into account. Tax returns Foreign tax credit. Tax returns   If you plan to take a foreign tax credit, you may be eligible for additional withholding allowances on Form W-4. Tax returns You can take these additional withholding allowances only for foreign tax credits attributable to taxable salary or wage income. Tax returns Withholding from pension payments. Tax returns   U. Tax returns S. Tax returns payers of benefits from employer-deferred compensation plans, individual retirement plans, and commercial annuities generally must withhold income tax from payments delivered outside of the United States. Tax returns You can choose exemption from withholding if you: Provide the payer of the benefits with a residence address in the United States or a U. Tax returns S. Tax returns possession, or Certify to the payer that you are not a U. Tax returns S. Tax returns citizen or resident alien or someone who left the United States to avoid tax. Tax returns Check your withholding. Tax returns   Before you report U. Tax returns S. Tax returns income tax withholding on your tax return, you should carefully review all information documents, such as Form W-2, Wage and Tax Statement, and the Form 1099 information returns. Tax returns Compare other records, such as final pay records or bank statements, with Form W-2 or Form 1099 to verify the withholding on these forms. Tax returns Check your U. Tax returns S. Tax returns income tax withholding even if you pay someone else to prepare your tax return. Tax returns You may be assessed penalties and interest if you claim more than your correct amount of withholding allowances. Tax returns This image is too large to be displayed in the current screen. Tax returns Please click the link to view the image. Tax returns Form 673 30% Flat Rate Withholding Generally, U. Tax returns S. Tax returns payers of income other than wages, such as dividends and royalties, are required to withhold tax at a flat 30% (or lower treaty) rate on nonwage income paid to nonresident aliens. Tax returns If you are a U. Tax returns S. Tax returns citizen or resident alien and this tax is withheld in error from payments to you because you have a foreign address, you should notify the payer of the income to stop the withholding. Tax returns Use Form W-9 to notify the payer. Tax returns You can claim the tax withheld in error as a withholding credit on your tax return if the amount is not adjusted by the payer. Tax returns Social security benefits paid to residents. Tax returns   If you are a lawful permanent resident (green card holder) and a flat 30% tax was withheld in error on your social security benefits, the tax is refundable by the Social Security Administration (SSA) or the IRS. Tax returns The SSA will refund the tax withheld if the refund can be processed during the same calendar year in which the tax was withheld. Tax returns If the SSA cannot refund the tax withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center at the address listed under Where To File to determine if you are entitled to a refund. Tax returns The following information must be submitted with your Form 1040 or Form 1040A. Tax returns A copy of Form SSA-1042S, Social Security Benefit Statement. Tax returns A copy of your “green card. Tax returns ” A signed declaration that includes the following statements. Tax returns   “I am a U. Tax returns S. Tax returns lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Tax returns I am filing a U. Tax returns S. Tax returns income tax return for the taxable year as a resident alien reporting all of my worldwide income. Tax returns I have not claimed benefits for the taxable year under an income tax treaty as a nonresident alien. Tax returns ” Social Security and Medicare Taxes Social security and Medicare taxes may apply to wages paid to an employee regardless of where the services are performed. Tax returns General Information In general, U. Tax returns S. Tax returns social security and Medicare taxes do not apply to wages for services you perform as an employee outside the United States unless one of the following exceptions applies. Tax returns You perform the services on or in connection with an American vessel or aircraft (defined later) and either: You entered into your employment contract within the United States, or The vessel or aircraft touches at a U. Tax returns S. Tax returns port while you are employed on it. Tax returns You are working in one of the countries with which the United States has entered into a bilateral social security agreement (discussed later). Tax returns You are working for an American employer (defined later). Tax returns You are working for a foreign affiliate (defined later) of an American employer under a voluntary agreement entered into between the American employer and the U. Tax returns S. Tax returns Treasury Department. Tax returns American vessel or aircraft. Tax returns   An American vessel is any vessel documented or numbered under the laws of the United States and any other vessel whose crew is employed solely by one or more U. Tax returns S. Tax returns citizens, residents, or corporations. Tax returns An American aircraft is an aircraft registered under the laws of the United States. Tax returns American employer. Tax returns   An American employer includes any of the following. Tax returns The U. Tax returns S. Tax returns Government or any of its instrumentalities. Tax returns An individual who is a resident of the United States. Tax returns A partnership of which at least two-thirds of the partners are U. Tax returns S. Tax returns residents. Tax returns A trust of which all the trustees are U. Tax returns S. Tax returns residents. Tax returns A corporation organized under the laws of the United States, any U. Tax returns S. Tax returns state, or the District of Columbia, Puerto Rico, the U. Tax returns S. Tax returns Virgin Islands, Guam, or American Samoa. Tax returns   An American employer also includes any foreign person with an employee who is performing services in connection with a contract between the U. Tax returns S. Tax returns government (or any instrumentality thereof) and a member of a domestically controlled group of entities which includes such foreign person. Tax returns Foreign affiliate. Tax returns   A foreign affiliate of an American employer is any foreign entity in which the American employer has at least a 10% interest, directly or through one or more entities. Tax returns For a corporation, the 10% interest must be in its voting stock. Tax returns For any other entity, the 10% interest must be in its profits. Tax returns   Form 2032, Contract Coverage Under Title II of the Social Security Act, is used by American employers to extend social security coverage to U. Tax returns S. Tax returns citizens and resident aliens working abroad for foreign affiliates of American employers. Tax returns Once you enter into an agreement, coverage cannot be terminated. Tax returns Excludable meals and lodging. Tax returns   Social security tax does not apply to the value of meals and lodging provided to you for the convenience of your employer if it is reasonable to believe that you will be able to exclude the value from your income. Tax returns Bilateral Social Security (Totalization) Agreements The United States has entered into agreements with some foreign countries to coordinate social security coverage and taxation of workers who are employed in those countries. Tax returns These agreements are commonly referred to as totalization agreements and are in effect with the following countries. Tax returns Australia Greece Norway Austria Ireland Poland Belgium Italy Portugal Canada Japan Spain Chile Korea, Sweden Czech South Switzerland Republic Luxembourg United Denmark Netherlands Kingdom Finland     France     Germany           Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. Tax returns The agreements generally make sure that you pay social security taxes to only one country. Tax returns Generally, under these agreements, you will only be subject to social security taxes in the country where you are working. Tax returns However, if you are temporarily sent to work in a foreign country and your pay would otherwise be subject to social security taxes in both the United States and that country, you generally can remain covered only by U. Tax returns S. Tax returns social security. Tax returns You can get more information on any specific agreement by contacting: Social Security Administration Office of International Programs P. Tax returns O. Tax returns Box 17741 Baltimore, MD 21235-7741 If you have access to the Internet, you can get more information at: http://www. Tax returns socialsecurity. Tax returns gov/international. Tax returns Covered by U. Tax returns S. Tax returns only. Tax returns   If your pay in a foreign country is subject only to U. Tax returns S. Tax returns social security tax and is exempt from foreign social security tax, your employer should get a certificate of coverage from the Office of International Programs. Tax returns Covered by foreign country only. Tax returns   If you are permanently working in a foreign country with which the United States has a social security agreement and, under the agreement, your pay is exempt from U. Tax returns S. Tax returns social security tax, you or your employer should get a statement from the authorized official or agency of the foreign country verifying that your pay is subject to social security coverage in that country. Tax returns   If the authorities of the foreign country will not issue such a statement, either you or your employer should get a statement from the U. Tax returns S. Tax returns Social Security Administration, Office of International Programs, at the address listed earlier. Tax returns The statement should indicate that your wages are not covered by the U. Tax returns S. Tax returns social security system. Tax returns   This statement should be kept by your employer because it establishes that your pay is exempt from U. Tax returns S. Tax returns social security tax. Tax returns   Only wages paid on or after the effective date of the totalization agreement can be exempt from U. Tax returns S. Tax returns social security tax. 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