Everybody loves a good vacation from the hustle and bustle of life but there is nothing better then a vacation that you can end up writing off. Vacations can end up being very expensive and nom productive if you let it. Well, lets never let it be this way again.
- Plan Your Trip In Advance
You can’t just go to Time Square or a random beach and hand out flyers that becomes a business trip. Before your trip you will have to plan where you’ll be each day, when you’ll be there and outline who you’ll spend time with.
Put your plans in writing by emailing them to yourself or someone else. This gives you a timestamp on your trip plans and proves you have professional intent behind your “vacation”
2. Ordinary Or Necessary Expense
This “Vacation” or Trip has to Be Considered A Ordinary or Necessary Expense. Ordinary and Necessary expense is a a term used by the IRS to break down expenses that are ordinary for a business based on the industry you’re in and deemed necessary for your business to be operational.
So the question is how do you do that with a vacation? Well for one what’s the reason you’re going to this location. Is this a trip to a conference or some type of industry networking event?
Maybe there is a prospective client you need to meet with in that area? Maybe you’re looking to open a location somewhere and you need to do research? You will have to have a good reason to rent the Lamborghini instead of the Camry. Your business lunch should be kind of basic not a super expensive lunch.
3. Business Has To Be The Main Focus
I know you want to relax and soak up the sun but to be able to write this vacation off then this trip has to mostly consist of business. The amount of days you spend is how the IRS measures your time away. So for a trip to qualify as a business trip you need to actually do business most of the time.
If you go to a 5 day conference and stayed 7 then yes that mostly business. Now if you stayed 10 days and only was at the conference for 5 of those days then you probably won’t be able write that trip off as a business trip.
4. Leave Your Home State
If you’re going to write off a trip it has to be out of state. You can’t take a staycation In your state and call that a business trip. Some of the local dinners and events can be written off but not as a business vacation. Bottom line you can make your travels a tax write off but make sure its done right that’s so you’re not audited later on.
List of travel expenses
Here are some examples of business travel deductions you can claim:
- Plane, train, and bus tickets between
- your home and your business destination
- Baggage fees
- Laundry and dry cleaning during your trip
- Rental car costs
- Hotel and Airbnb costs
- 50% of eligible business meals
- 50% of meals while traveling to and from your destination
At the end of the day your travel expenses can be written off but it has to be done the right way. Thanks for reading and being a member of the wealthbuilder family.
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