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Tax Home Basics

Updated: Jul 25

Understanding Tax Homes for Travel Therapists

Establishing a tax home can be tricky, as it depends on each individual’s situation. There is often a gray area when it comes to tax homes—it's not always black and white.

For travel therapists, establishing a tax home is essential, as it directly impacts your take-home pay during contracts. A tax home enables your recruiting company to offer you more in stipends, as opposed to hourly pay, which can help reduce the amount of taxes you owe.


What is a Tax Home?

A tax home refers to the general area of your main place of business or employment. It doesn't necessarily mean your physical residence must be located there. Your tax home is where you spend the most time. To establish a tax home, you must have living expenses in an area that you would duplicate while traveling for work (1,2).

In simple terms, your tax home should be the place where you had regular, fully-taxed income before you began traveling for work.


IRS Guidelines for Determining a Tax Home

Here are the main factors, according to the IRS, that help determine your tax home (2):

  1. Primary Place of Work: You work or do business in the area where you live, and you stay there when you're back in town.

  2. Duplicating Living Expenses: While traveling for work, you're duplicating living expenses in another location.

  3. Maintaining Your Main Place of Lodging: You have not abandoned your primary place of lodging.


Key Points to Consider

  • Return to Your Tax Home: You must return to your tax home area at least 30 days within the calendar year (1).

  • Length of Stay: If you travel to a contract location for over 1 year, that location could become your tax home since it would be where you receive your primary source of income (1,2).

  • Fair Market Value: Duplicated living expenses while traveling must be at the fair market value for both the area you’re traveling to and the area where your tax home is located (1,2).

  • Meaningful Connections: You should have a meaningful relationship with your tax home area. Examples include a gym membership, church affiliation, or close ties with family and friends in the area (2).

  • Travel Distance: You must travel far enough from your tax home to require lodging stipends. While there’s no set number of miles, this typically means traveling beyond a reasonable commuting distance (1).

  • Documentation: Keep detailed records of your expenses, both at your tax home and at your travel locations. This includes mortgage payments, rent receipts, leases, maintenance costs, travel expenses, and any costs incurred during your contract assignments.


Examples

  1. You have been renting a place in Austin, TX and have been working in the area. You decide you want to start travel therapy and move to Boston, MA. If you continue to pay rent at your place in Austin and where your new contract is in Boston, this would be considered duplicating your expenses. The area you work and/or live in Austin would be your tax home assuming you meet the other criteria.

  2. You pay a mortgage in Southern California and want to do a travel contract in Central California. You would need proof of your mortgage payments in SoCal and proof you are paying for rent and other expenses in Central California to establish your tax home.


    Feel free to reach out to me with any questions!


Disclaimer

This outline is based on my own research and conversations with others. The process of establishing a tax home can be complicated, and this overview is meant to provide the basics. If you have questions or need clarification, I strongly recommend consulting a tax professional.



These are photos from my first contract northwest of Boston, MA!


International tennis hall of fame in Rhode Island Freedom trail in Boston, MA

Mike's Pastries in the North End in Boston, MA Hike around Lake Willoughby in Vermont

References:

  1. Latimer, Laura. "4 Must-Know Rules to Tax-Free Money for Travel Therapists." Nomadicare, 2025, https://www.nomadicare.com/travel-therapy/4-must-know-rules-to-tax-free-money-for-travel-therapists/.

  2. Internal Revenue Service. Publication 463 (2024), Travel, Gift, and Car Expenses. U.S. Department of the Treasury, https://www.irs.gov/publications/p463.

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