You do not currently have the Adobe Flash player installed. Click Here to download and install.

Living expenses

“Preferred Method”- When I am in Columbus, can I deduct a per diem amount for meals, lodging and other living expenses?
Yes, under certain circumstances. The location of the tax home is significant since employees can deduct the cost of meals, lodging and other incidental living expenses only if they are away from their tax home overnight in the pursuit of their trade or business. In lieu of deducting actual expenses, you may use a per diem rate established by the IRS. The rate used depends upon the location of the travel. For travel to Columbus, the rate is $142/day for travel through Sept. 30, 2007 and $150/day through the remainder of the year. If you use the IRS per diem rate, you are relieved of the record-keeping requirements. The meals portion of the per diem would be subject to the 50% meal and entertainment limitation discussed elsewhere in this Guide. Also, the balance is subject to the miscellaneous expense deduction disallowance of 2% of adjusted gross income, also discussed elsewhere in this Guide. The portion of either per diem rate applicable to meals is $49.

If you live more than 50 miles from the state capital, you may make an election to have your place of residence within your legislative district considered to be your tax home. If you do not have separate business interests, you must make this election in order to deduct travel expenses.

If the “Special Election” is made, the per diem deduction is available for the following days:

Days the legislature is in session (including deemed days, periods of up to four consecutive days when the legislature is not in session); refer to your session and deemed days calendar for 2007 which can be obtained from your clerk's office.
Days the legislature is not in session, but your physical presence is formally recorded at a meeting of a committee of the legislature.

Consult your certified public accountant for information regarding the time and manner for making this “Special Election.” Legislators that meet these qualifications will find this to be a preferable method of reporting living expenses. However, the IRS has recently challenged this “Special Election” and the matter is currently under appeal. Please consult with your certified public accountant before making this election.

How do I elect to use the per diem amounts for meals and living expenses?
Under IRC 162 (h), a state legislator may call the district that he/she is representing as his/her tax home. Therefore, the legislator is entitled to a per diem deduction for deemed legislative days. The election is made on an annual basis when the legislator files his/her Form 1040. The deemed days is calculated by the Clerk of the Senate or The House of Representatives. (See cautionary note in the Business Meals and Entertainment Expenses section above regarding this matter.) The following is a sample of an election, which should be attached to Form 1040. A copy of the letter from the Clerk can also be attached to Form 1040.

FORM 2106 – Employee Business Expenses
The taxpayer/legislator hereby elects his/her district as his/her tax home and is applying IRC 162(h) allowing the following per diem deduction for the indicated legislative session days.

What expenses can I deduct for costs incurred while living in a hotel, apartment, camper or similar mode of residence while in Columbus?
When residing in hotels, motels and other similar commercial places while in Columbus and away from your normal (tax) residence, you are allowed to deduct the actual amount paid for the room (including any taxes and service charges).

If accommodations are shared with other legislators or individuals, you may deduct your share of the expenses. If accommodations are being leased on a monthly basis, you may deduct your share as long as it is paid by you and is for the purpose of providing a place to stay while you are away from home on business. If you live in an apartment or share an apartment with another individual, you may deduct your share of the rent, utilities, telephone and any furniture you may be required to rent in order to furnish the apartment.

In each case, whether or not it’s a hotel or an apartment, you or someone within the group with whom you are staying should keep copies of paid bills for use in any future IRS examination. In cases where accommodations are shared, it would be best if each member of the group has copies of the paid vouchers. Each member should also receive an annual summary showing the total costs of the accommodations and how these costs were divided among the various roommates.

If you own a trailer or a camper and live in it while in Columbus, your deduction will be based on the following computation:

Determine the cost of the camper, the furnishings and the hitch for the car.
Based on the cost determined in item (1) and the depreciation method you select, compute the allowable depreciation on an annual basis for the camper, furnishings and the hitch for the car.
Determine the cost of maintaining the camper, such as batteries, tune-ups, water supply, etc.
Determine the percentage of time the camper is used for business. The percentage is based on the number of days used for business over the total number of days the camper is used for all purposes. Business use would include days used as a Columbus residence plus days used on legislative business away from Columbus during which you travel to other cities in your district and use the camper to stay overnight. (Records should be kept of the number of days used for business and days used for other purposes, such as family vacations and other personal use.)
Multiply the sum of items (2) and (3) by the percentage in item (4).
Your deduction is the amount determined in item (5) plus the full fees paid for parking in trailer camps while on business. If you park in a free parking lot, of course, there is no expenditure; therefore, no deductible parking expense is incurred.

The above deductions, unless reimbursed, will be miscellaneous itemized deductions subject to the 2% of adjusted gross income limitation.

What expenses can I deduct for meals when I’m in Columbus?
You may deduct 50% of the cost of meals that you paid for yourself in 2007 (subject to the 2% of adjusted gross income limitation) while staying in Columbus. You should retain a record that shows the amount that you personally paid for breakfast, lunch, dinner and/or any other meal expense you incur while you are in Columbus.

You cannot deduct the cost of a meal paid for by a lobbyist or friend. Similarly, when you are attending banquets in Columbus held by various associations, you are not allowed a deduction for this meal. Therefore, it is necessary to keep a record showing only the meals you personally paid for. If you are living in quarters that provide cooking facilities, the cost of groceries and necessary beverages is deductible. To be safe, you should keep receipts and all canceled checks to support your business expenses.

Because we are in Columbus for long periods of time, I find it necessary and desirable to have my spouse and children come to Columbus on occasion. Can I deduct the cost of their travel to Columbus, hotel costs and the cost of their meals? No. It is virtually impossible to deduct any expenses of spouses and dependents.

When committee meetings last late into the evening, I go out and grab a sandwich or other refreshment. Is this a deductible business expense?
Yes, subject to the 50% limitation.

I stay at the Athletic Club when we’re in session. In order to stay there, I must pay dues as well as the cost of the room. Can I deduct the cost of these dues? No, such dues are not deductible in 2007.