Overnight Sleep Test

AAA

DEFINITION of 'Overnight Sleep Test'

A criterion that determines whether meals eaten alone while working are tax deductible. To be considered a tax-deductible business expense, meals eaten alone must be eaten when the person is doing business away from home for long enough and/or far away enough that an overnight stay is required.

INVESTOPEDIA EXPLAINS 'Overnight Sleep Test'

For example, if Zoe drives across town for a business meeting, then stops at a restaurant afterward for a meal, the meal will not be tax deductible because she dined in the general vicinity of her office. She did not stay overnight anywhere, so the expense does not meet the overnight sleep test. If Zoe's office is in Los Angeles and she flies to Denver for a business meeting, then has lunch at the airport and returns to Los Angeles the same day, the lunch is still not tax deductible.

RELATED TERMS
  1. Exit Visa

    A government-issued document granting an individual permission ...
  2. Commercial Visa

    A government-issued document that allows noncitizens to enter ...
  3. Tax Expense

    A liability owing to federal, state/provincial and municipal ...
  4. Away From Home

    The IRS criteria used to establish whether or not you are within ...
  5. Tax Home

    The general locality of an individual's primary place of work. ...
  6. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
RELATED FAQS
  1. How can I find out which income tax bracket I am in?

    U.S. federal tax brackets are based on filing status (single, married filing jointly, married filing separately or head of ... Read Full Answer >>
  2. Can a Limited Liability Company (LLC) issue stock?

    A limited liability company, or LLC, cannot issue stock. Instead, an LLC is structured to have single or multiple owners ... Read Full Answer >>
  3. What are the risks involved in a banker's acceptance?

    College savings accounts are excellent ways to encourage saving for future college costs. Contact your investment professional ... Read Full Answer >>
  4. Which factors drive the marginal propensity to consume?

    A limited liability company (LLC) is not a separate entity from its business owners but is instead considered a pass-through ... Read Full Answer >>
  5. How does a master limited partnership (MLP) differ from other business structures?

    The master limited partnership (MLP) is a unique hybrid legal structure that combines elements of a partnership with elements ... Read Full Answer >>
  6. What is the difference between MAGI (modified adjusted gross income) and adjusted ...

    Calculating personal income tax correctly involves understanding two important tax terms: adjusted gross income (AGI) and ... Read Full Answer >>
Related Articles
  1. Budgeting

    Drawbacks Of Travel Reward Programs

    These nearly universal loyalty programs can have handy perks, but they're not a free ride.
  2. Insurance

    Travel Tips For Keeping You And Your Money Safe

    Take precautions to avoid being taken advantage of on your vacation.
  3. Personal Finance

    Save On Planes, Trains And Automobiles

    Getting to, and around, your travel destination doesn't need to break the bank.
  4. Personal Finance

    7 Ways To Save On Summer Getaways

    Find out how to have a fun and budget-friendly summer adventure.
  5. Budgeting

    Globetrotting On A Budget

    Don't let a shoestring budget trip-up your vacation plans.
  6. Options & Futures

    Travel Smart By Planning How You'll Pay

    With a little pre-trip planning, you can avoid being stranded without adequate funds.
  7. Personal Finance

    Shoulder Season: Your Ticket To The Perfect Vacation

    Traveling during the sweet spot between high season and off season can save you money and stress.
  8. Economics

    Why Working Doesn't Add Up For Many Women

    A type of tax deduction for Japanese stay-at-home wives puts a barrier on women working full time in the country.
  9. Home & Auto

    What Are The Tax Advantages Of Buying A Home?

    Don't forget these deductions and credits that homeowners can use to reduce their tax bill.
  10. Taxes

    Understanding Income Tax

    Income tax is a levy many governments place on revenue of entities within their jurisdiction.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center