Tips for Turning Your Vacation Into a Tax Deduction

1. Make all your business appointments before you leave for your trip. 
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible. Wrong.

You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS.  Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.


2. Make Sure your Trip is All "Business Travel."
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.


3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tip:The IRS doesn't require receipts for travel expense under $75 per expense--except for lodging.

4. Sandwich weekends between business days.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.

5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.

Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!