Tax Question -- Deduct Travel Away From Home Expenses - College Summer Intern

Career Opportunities & Internships
1

<p>Has anyone who had a summer internship away from home and away from school successfully deducted expenses on their 1040?</p>

<p>This would include room, board, travel while on the summer internship. During the school year, there is no full time employment- the job is being a student.
Technically though- this is a temporary situation away from home.</p>

<p>Anyone know if the IRS rules allow this...as this would lower taxable income and hence the EFC calculated by FAFSA for the coming school year.</p>

2

<p>Expenses should be deductible as long as you are more than 50 miles away from your tax home. If the job lasted more than 1 year you would have problems deducting it (your tax home would have moved). See IRS form on Unreimbursed Employee Expenses (form 2106, 2106-EZ). See also pub 529. I forget the rules about per diems and when you can use the flat federal millage and city rates (pub 15 circular E?).</p>

3

<p>Be very careful if you decide to do this. There are many factors you need to consider. A few are: where is your tax home in relation to this job, were you considered an employee (were you paid) ,how long was the internship, were you reimbursed for any expenses, do you claim yourself or do your parents claim you, etc. There are more facts to consider as well. Also, if you are able to claim any deduction, you will more than likely be claiming ‘unreimbursed busness expenses.’ This means that in order to claim a deduction your expenses are first limited to 2% of your AGI (so in order to deduct you must go above and beyond this amount). Also, this would mean that you would be itemizing your deductions so you would be giving up your standard deduction of $5700 (if you are filing as single). Are your job expenses and other itemized deductions more than this as a student?</p>

4

<p>Distance test met.
Full time student - no other employment during the year.</p>

<p>Summer internship 10 weeks. No payroll taxes taken-- nothing to recover. Received a 1099 – so now due FICA taxes as well. Student is still claimed as a dependent on parents’ 1040.
70 days of expenses = either using actual or per diem-- can be sufficient to wipe out FICA tax due and essentially get the new credit as well (Make Work or something like that??).</p>

<p>Do you consider these expense Schedule A expenses or would you put these on 1040 Line 12 using Schedule CZ? (given that it’s 1099 not w4 income)</p>

<p>Thoughts?</p>

5

<p>This would not help for FAFSA though as it is not the taxable income that is reported on FAFSA. It is the AGI which is before standard deduction comes off.</p>

<p>Schedule CZ is for business expenses. I don’t think it would apply at all to this case.</p>

6

<p>I am also interested in this subject so I hope some more people will add information. I have scoured the IRS website and googled this to death and can find no clear answer.</p>

<p>Basically my daughter spent the majority of her income from the internship to pay for temporary housing at her location. Because of a previously signed lease she was still paying for her apartment at school as well, so a very expensive summer. Fortunately the internship was great experience, but OUCH!!</p>

7

<p>Well, I just spent the last hour trying to determine the best course and found that her standard deduction is about equal to all of her itemized deductions (assuming they would all be allowed anyway) so that is the easiest route for her…what a waste of time LOL
Now I will try to figure out if her state tax can be reduced at all…Pennsylvania has a system with a flat tax for all incomes and very few deductions…fun. </p>

<p>I really wish that all of our tax systems were simplified…I have a lot more experience than my student and find this somewhat complicated so I am not sure how they expect new taxpayers to do it.</p>

<p>( Yes I am a bit of a helicopter mom…)</p>

8

<p>We have a similar issue with our son. He worked out-of-state at an internship where he received a W-2 for his work but he also received enough money to cover housing (it was their housing) and food. He hasn’t received any documentation on the housing/food allowance. Trying to call the IRS requires a lot of patience right now.</p>

9

<p>PA Mom, if they earned that income from the summer internship out of state the income should be reported on that state’s return and not PA’s. I’m a student out in CA but maintain my PA residency, and after talking with a person or two in the tax offices in PA they told me to pay taxes in CA and report no earned income to PA (since I didn’t earn any income while I was in PA).</p>

10

<h1>8</h1>

<p>Some companies work on fiscal year:
DS received Friday a W2 for relocation/housing expenses incurred in 2008 but 2009 fiscal year.
DS also received a W2 in 2008 for wages and nonwage compensation for fiscal year 2008. </p>

<p>DS is not going to be happy since his tax rate is much higher in 2009 than in 2008.</p>

11

<h1>8</h1>

<p>If I remember his 2008, wage statements & W2 included a line item for housing and transportation. </p>

<p>When DS worked in PA, Ore resident, he paid income taxes in both states for working in PA.
PA and OR has income taxes. </p>

<p>When DS worked in WA, he only paid Ore income taxes. WA does not have income taxes.</p>

12

<p>From what I discovered but cannot remember the details. </p>

<p>internships expenses are deductible because person is a FT student (in school FT for a certain percentage of year) (temporary position, and classified as ‘intern’)</p>

13

<p>I searched the IRS and found that the expenses could be deducted on Schedule C-EZ for the internship as temporary housing/lodging and travel and the airfare out there, plus her car rental there plus gas. (she lived with a family rent).
In my D’s case, she has a 1099 not a W2 for the internship earnings, making the Schedule C really easy to use…drawback, now she has to also file a Schedule SE to cover 1.5x the FICA tax …since no payroll taxes were taken.</p>

<p>But even if your S or D has a W2-- this is considered travel away from home.
You might also use the standard per diem allowance rather than actual expenses for meals…I had my D collect her receipts – she ate very inexpensively - lunch under $6 and ate lots of pasta for dinner …turns out she had about $1000 in actual meal expenses for the summer, but the standard gov’t per diem for the county was over $50 - which I’m going to use== bringing expenses to $3000 for the summer…much better! It’s not illegal…
Goal-- get the AGI as low as possible!</p>

<p>I’m less concerned with any tax liability (which is going to be close to zero anyways) than I am about what to have to report to her FAFSA and raise her EFC. Again, goal to get the AGI as low as possible.</p>

14

<p>Some one please correct me if I was wrong. I believe there is a time test for deducting moving expense regarding a job. You need to work at the new location 39 weeks out of the 12 month period following the work location change. This time test will disqualify most, if not all, summer intern jobs.</p>

15

<p>re #11</p>

<p>Our son received no documentation for the housing/food allowance. The allowance was $1,600 for 10 weeks. Rent was $800 leaving $800 for food or about $11/day. When I go on business trips, the company pays for room, transportation and food and none of this is reported as income; nor do I report anything on my taxes. Should this housing/food allowance be considered the same thing?</p>

16

<p>I am still not sure if travel expense can be deducted for summer internship away from home. Since my son has landed an internship in Illinois, we will need to do some good research this year. He is considered to be a California resident while attending ASU.</p>

17

<p>I believe Christian2 is correct about the time test.</p>

18

<p>It seems like it would be MUCH more sensible to use the standard deduction than to itemize in this case. Unless deductible expenses are greater than $5,700 for the summer, it makes sense to use the standard deduction, which is essentially the amount of earned income up to $5,700.</p>

<p>[Itemized</a> Deduction and Standard Deduction, IRS and Tax](<a href=“http://www.wwwebtax.com/deductions_z_other/itemized_deductions.htm]Itemized”>http://www.wwwebtax.com/deductions_z_other/itemized_deductions.htm)</p>

<p>That should simplify things…if unreimbursed expenses exceeded $5,700, something is wrong!</p>

19

<p>Similar situation with my daughter (Im helping her with her taxes) who lives in Texas (home Houston) and goes to school at the University of Texas in Austin . I pay for 12 month lease on an apartment in Austin,</p>

<p>This summer 2011, as an internship requirement for business school she did an 11 week internship in California for alarge coproation and was paid $9800. She was sent a W-2 which showed withholding of
$ 447 for Fed Income Taxes, $ 609 for Social Security, $142 in Medicare plus two State or Local income Taxes (Box 17) of $ 224 and $75 for (Box 19) </p>

<p>In addition she received a separate 1099-Misc (2010 Substutute Form) for an additional $3,000 (item 3) on which no Federal Income Tax was withheld. Because of the high housing costs in Orange County California the company gave her and the other Texas intern each $3,000 for a $1,000 per month housing stipend to help pay a partion of the housing costs since they did not have corporate housing available and were left on their own to find living accomodations. She was also reimbursed for her transportation cost She drove out there at $.50 a mile ($1500 for 3000 mile round trip for Houston to LA) plus food and hotel expenses for 4 nights (each way). </p>

<p>Im not sure how to handle this. Since it was for 11 weeks I would have thought she would be treated as an independent contractor and receive a 1099 for the $9800 not a W-2 (Isnt that for employees? ) </p>

<p>I am declaring her on my taxes as a dependent and filing a seperate return for her. I had planned on filing her taxes on a Schedule C. We were unable to find an affordable short term lease apartment in California. I ended up paying approximately $ 90 per day to have her stay at a Marriot Courtyard Chain (total cost $6930 for 11 weeks) 12 miles from her intern job. </p>

<p>If I put that $9800 as W-2 wages on line 7 of the first page of a 1040 and then the $3000 (Housing Stipend) on Line 21 (Other Income) I dont think I could use a Schedule C for her temporary housing expenses which far exceeded the $ 3,000 stipend she was given. </p>

<p>Shoudltn I file her Incoem an Expense on Schedule C to that I can write off all the housing costs ou there? I cant do a shorrt C-EZ because she receive another 1099 for another $ 1200 from a movie cast in. However in that case her mileage expense at $ 50 a mile actually slighly exceded the $1200 income she make from that film in 2010. The other half was paid in January 2011<br>
Some othe questions?

  1. Am I allowed to write off daily mileage expenses from the Hotel to her intern job? (She was reinbursed via expense account for mileage for use of her personal car for occasional out of the office assignements with mileage starting from the work place starting with the business location…but not from her hotel)<br>
  2. What about meals? Since the hotel did not have a kitchen she had to eat most of her meal out
  3. What about personal entertainment? IS any of that deductible? </p>

<p>If I just put in the $ 9800 on line 2 of Income Tax form (W-2 wages) plus $ 3000 Misc Income on line 21 she would have a Adjusted Gross Income of $ 12800 with no way to expense hotel and food etc and then would have a taxable income $7100 (after $ 5700 standard expemption for Single Taxpayer) with a Fed tax liability of $708 (Did not take $3650 exemption as I am decraling her as a dependent) . This would result in an addition Fed liability of $261 ($708 - $447 with-held),</p>

<p>That doesnt seem quite fair because of the housing costs alone we incurred that were substantially higher ($6,900) than the housing $3000 stipend they gave her considering we already pay for a year round apartment in Austin.</p>

<p>I guess it being the April 18th I will request an estension but I want to finish this off within a week.</p>

<p>If anyone understands the process an can enlighten me is she entitled to a partial refund refund for the Social Security, Medicare and California State and local taxes that were withheld from her chekc? How do you go about doing that? .</p>

20

<p>My son ended up filing his tax using standard deduction and not claiming any travel or housing deduction for his internship last year in Illinois. As an intern he was treated as a temporary employee by the company that he worked for and received a W2. I just cannot find anything in the tax code that will allow deduction of his housing and travel expenses.</p>