Tax Deduct Your Vaction ?
Essex & Associates::www.essexinc.biz August 17, 2011
Tax Tips on Combining Business and Pleasure
You can deduct the costs of good times if the trip is mainly for business.
Now that the dog days of August are upon us, it might be a good idea to get pencil and paper in hand for some strategizing that can combine a few tax-friendly vacation days with that business trip you've been planning.
As it happens, U.S. tax laws can provide executives, business owners as well as employees with a range of opportunities to do just that. Although business is business and pleasure is pleasure, the tax code does not always adhere to absolutes.
The key is to properly combine and document business and personal travel. For instance, when a few vacation days are added onto what's essentially a business trip within the United States, business-related travel costs are usually deductible. Actual transportation expenses such as cab, rail, and plane fares and baggage fees and tips are deductible for out-of-town business.
The bottom line, is that transportation costs are 100% deductible – as long as the main reason for your trip is business rather than pleasure
How do you determine that the primary reason is business? The Internal Revenue Service is silent on the question. But the number of days spent on business as compared with pleasure can be a key factor in its rulings. Travel days, weekends, and holidays may count if they fall between days devoted to business and if returning home won't be practical.
What happens when you get to that sunny clime? You can fully deduct such out-of-pocket business costs as lodging, hotel tips, seminar and convention fees, and cab fare.
Wayne T. Essex Ph.D.
Essex & Associates
Tax, Accounting, HR, Payroll
7501 Paragon Road
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