Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

8 Strategies for Business Tax Deductions on Your Vacation



Did you ever notice professional organizations hold their conventions at favorite tourist destinations? Why? It’s possible to deduct some of those travel costs as business expenses.

If you’re careful, you can write off some expenses on your vacation. That’s not to say you can turn your vacation into a tax deduction.

It’s a complicated issue. Be diligent so you don’t trigger an Internal Revenue Service audit.

It’s all about writing off legitimate deductions — the right way. Be careful in your recordkeeping and be rigorously honest in your motives and actions.

Talk with your tax advisor about these strategies:

1. Transportation costs

Assuming your trip is essentially business related, your domestic transportation costs can be deducted.

For international travel, your trip needs to be 75 percent business-related.

Otherwise, you can only write off the percentage of travel costs that are actually for business purposes.

2. Vacation with the family

If any members of your family are actual employees or business partners and are involved in the business portion of the trip, those expenses are deductible.

This is common, of course, in a husband-wife small business, where both are employees.

In the event family members — who aren’t employees — are on the trip, there ethical ways in which you can capitalize. If you pack the family into the car that’s used for business travel, for example, the driving costs can be written off. However, any expenses stemming from upgrades for the benefit of  the family can’t be deducted.

Remember you can’t deduct expenses for family members just for helping out a little. They must be bonafide employees.

3. When you can write off meals

If you’re on a tax-deductible business trip, you can write one-half of the costs of meals you and your business associates eat.

4. If you stay longer, fine, but you can’t deduct the overstay as business expenses

It’s common for businesspeople to extend their stays on trips for a little R&R. Just be sure to keep careful records and know that you can’t write off recreational costs.

Remember you can’t deduct expenses for family members just for helping out a little. They must be bonafide employees.

5. Cruises can be deducted to a point

If you go on a business-related cruise, you can deduct it if the ship is a U.S.-registered vessel and you don’t sail to foreign destinations.

The deduction limit is $2,000 annually. Note: You must include adequate documentation in your IRS tax filing.

6. Deduct miscellaneous expenses

You have the option to deduct expenses, such as conference and seminar fees, Internet access, laundry charges, taxis, telephone calls and tips.

7. Keep great records

Obviously, you know to keep receipts. But for travel deductions, you can’t keep enough information to show the IRS. That includes any business-related material — agendas for meetings, your itineraries and programs.

8. For tax purposes, don’t turn your trip into a lavish junket

Your expenses have to be reasonable. Staying in a penthouse suite or renting a Ferrari don’t qualify as write-offs.

Visit this resource linkIRS Publication 463: Travel, Entertainment, Gift and Car Expenses.

From the Coach’s Corner, more IRS tips:

Tips on Understanding the Mindset of IRS Auditors — An IRS audit is enough to make you tense with cold sweat in the palms of your hands. More businesspeople have complained to me about the mean-spirited treatment at the hands of IRS agents than any other federal agency. 

 4 Tax Tips for Your Home Office Write Offs — The best tip I ever got from a CPA was to move my firm from a rented office space to my home. But it was important to understand the tax code for qualified write offs. 

Keys to Protect Yourself from Skyrocketing Trend – Tax Identity Theft — Tax identity theft is increasingly victimizing Americans, according to the Internal Revenue Service.  

“Income tax has made more liars out of the American people than golf.”

-Will Rogers


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Image credit: Michelle Kwajafa, www.bmorerose.com 

Seattle business consultant Terry Corbell provides high-performance management services and strategies.