Hi,

I get different answers from people on whether people on H1 can claim the amount spent on commute to work, meals and laundry in itemized deduction.

As per IRS website , you can claim these only if you are away from home. I am a Indian citizen and working in USA.

I was in India for 3.5 months last year and worked in different states in USA. Can you please clarify on the criteria for itemized deductions.

Also, I made two India trips for vacation . Can these be claimed as any kind of deductions along with the amount I spent on taking gifts for friends in India? I do have the receipts for everything.

Thanks,
Mayank

Any employee job related expenses, not reimbursed by employer, can be deducted as itemized deduction on schedule A (Form 1040).
You will take deduction only if your itemized deductions are more than your standard deduction.. You can deduct the amount of your expenses that is more than 2% of your adjusted gross income (Form 1040, line 38). Read: Your U.S. Tax Return: Itemized Deductions

Vacation trips are not deductible. You may be able to deduct Moving Expenses -- to move from India to the U.S. read: Your U.S. Tax Return: Moving Expenses

Mayank:

If I understand your situation correctly, you will NOT be able to claim any such daily living expenses.

Because the H-1 jobs exceed one year in length, the IRS does NOT recognize that your H-1B job is temporary in nature, so you cannot claim the expenses while away from India.

The time in India while on vacation is NOT work-related, so that is a No Go.

It seems that your job requires multiple relocations. You are basically changing your tax home every few months. This being the case, you CANNOT claim your daily living expenses UNLESS you are maintaining a home in a separate U.S. city for your wife and child, for example) IN ADDITION to the expenses incurred while on the job in another U.S. location.

Thanks for the information Mukta and Atlanta tax expert. I am on H1 but still my assignment is less than a year before I have to go back to India. I am staying in New Jersey and working in New York. However, I am not staying in New York.

Since my job required relocation in less than a year , am I eligible to claim deduction for Moving expenses.

Thanks,
Mayank

Mayank:

If you were in the U.S. for LESS than one year while on the H-1 visa, then you DO qualify to deuct your daily living expenses because you now meet the IRS criteria for a tempary job.

If you claim these temporary living expenses, you cannot claim moving expenses.

I have been coming at different times on H1. My last assignment started in April 2007 and Ended on June 28,2008. I was in India for a month in between on vacation. My current assignment started from Sept 24,2008 and will be valid till August 2009. In this scenario, can I claim the daily living expenses. I have been on H1 in USA in 2005 also for 11 months.

For my case, it entirely depends on project requirements. I keep visiting US for some time and mostly works from INdia only.

April 2007 to June 2008 is more than 12 months. This is more than one year and therefore not treated as temporary.

Sept 2008 to August 2009 is less than 12 months. However, you were only gone from the U.S. for July and August of 2008. If you were on the same H1B visa in Sept 2008 as June 2008 and you are working for the same employer, then the two assignments will not be treated as separate and therefore the second one will not be temporary.

IntlTax stole my thunder by saying EXACTLY what I was thinking!

Thanks a lot IntlTax and Atlanta tax expert. I am working for the same employer in India but my client has got changed from June 2008 ti Sept 2008. The H1 was modified with a Transfer memorandum only. I am not sure whether this modified the status.

I really appreciate all the clarification provided on this forum. You guys are really doing great job.