Can Clients Deduct the Costs Associated with Fleeing the Pandemic?

If you fled to a vacation home to wait out the pandemic, can you deduct the related costs? Julian Block answers this question and more in his latest column about coronavirus and income taxes.

May 13th 2020
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I devoted a previous column to a corona-inspired query about income taxes. I’m going to use this column and a subsequent one to answer additional queries.

What follows are my responses to two queries that I’ve lightly edited and condensed for clarity.

Question: Hello from Abigail in Massachusetts. Hubby John and I live year-round in the middle of a neighborhood that quickly transformed from Camelot to Covid-19 hot spot. We decided to pile some belongings into our car and flee to our vacation retreat.

The dwelling is in an ideal area. The population is low; there’s lots of open space that easily lends itself to social distancing; and, as of now, it has experienced only a low number of confirmed coronavirus cases.

In the course of our lengthy journey, we incurred charges for things like gas, tolls, meals and hotels. Also, while we shelter in place for what could turn out to be an extended period, we’re shelling out lots more for basic living costs than when we were back home. Can we claim deductions on 2020’s 1040 form for some of those costs?

Answer: Under the current rules, you can’t. They all fall into the category of what the IRS characterizes as nondeductible personal expenses.

Question: What could happen if Congress changes the rules?

Answer: I’ll respond to that unlikely event in the next question.

Question: Hello, Julian, from Mack in Minnesota, where wife Mabel and I are hand washing and social distancing to the max during the pandemic. We’ve been joined by our son and Esmeralda, his loquacious girlfriend.

Occasionally, Mabel tactfully asks Esmeralda to allow some of her thoughts to go unspoken. She responds belligerently, mostly in words that would make sailors blush, to borrow a line from My Fair Lady.

Also embedded with us for the duration are our daughter and her opinionated boyfriend, Benito, who continually complains that the West and, in particular, the United States misunderstood Hitler. Benito brings to mind Sheridan Whiteside, the caustic critic and irascible invalid in "The Man Who Came to Dinner” by George S. Kaufman and Moss Hart.

Mindful of our obligations as parents, Mabel and I are stoically hosting our children and their manners-challenged friends. All four, like so many other Americans, have lost their jobs, have mountains of debts, and have run out of money to pay for food and other expenses.

While wifey and I still believe that mi casa es su casa, our pandemic-related outlays greatly exceed our spending before we two became we six. Seems to me that we two should be allowed to deduct the excess.

Let’s suppose Congress concurs and tells the IRS to include our corona-caused expenses as a new adjustment to income on the 2020 version of Form 1040’s Schedule 1 (we checked out Internal Revenue Code Section 62) or as a new itemized deduction on 2020’s version of Schedule A.

Let’s also suppose that Schedule 1 is where we’re able to claim the expenses. That would decrease our adjusted gross income and, assuming we’re itemizers, increase Schedule A’s deduction for medical expenditures (our reading list included Code Section 213), given that such expenses are allowed only to the extent that they exceed 7.5 percent of our AGI.

There’s another reason that using Schedule l would be more advantageous: We anticipate that our Schedule A write-offs will be less than 2020’s standard deduction amount for joint filers when both spouses are older than 65, as we are (our last stop was Section 63). Do you think that Congress will address our problems?

Answer: Mack and Mabel, there are a couple of things that I should mention before I respond to your question. First, you both are exemplary parents and hosts; second, you both clearly express yourselves; and third, you both know how to research our Byzantine tax code. 

My advice: Chuck your present careers and launch new ones as tax advisers. In these tumultuous times, everyone ought to have a Plan B, though there have to be justifiable exceptions for those who are one-trick ponies, as I am.

My response: Don’t count on Congress to provide tax remedies for the Macks and the Mabels. The IRS will, as I noted in my answer to the previous question, continue to deny deductions for pandemic-linked expenses incurred by you and millions of other Americans.

In future columns, I’ll answer more corona questions about income taxes.

Additional articles. A reminder for accountants who would welcome advice on how to alert clients to tactics that trim taxes for this year and even give a head start for next year: Delve into the archive of my articles (more than 350 and counting). 

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