A Tax- Deductible Vacation

âہ“ I sure would like  to write off my vacation.”  This is a common thought among the self-employed as well as the employee.  As long as your expenses are necessary and ordinary for your business or trade, you can deduct them, or portions of them. These expenses include round-trip travel expenses and the cost of education for improving or maintaining skills.

It’s a lot easier to take advantage of these deductions  then you might think.  The main things to remember when scheduling your vacation/business trip are the timing and good record-keeping.  Let’s say you have always wanted to go to Key West…find a conference being held there that benefits your profession or business and sign up.  You must be able to prove that it benefits your business, and not just your social life.  It does not have to be specifically related to your business responsibilities or duties, but with the industry itself.

In order to prove that the trip was business-related, you will have to keep the agenda…this shows your attendance at the conference.  The registration fee and the cost of books and materials will be deductible.

Travel expenses are also deductible, such as airfare, bus fare, or standard mileage allowance if you drive. If the conference starts on Sunday with registration and runs through Thursday with activites, arrive on Sunday and register and leave on Friday.  You will more than likely be questioned if you arrive on Friday or Saturday and depart on Saturday or Sunday.  This will appear to be a vacation and not a business trip. Taxi fares are also deductible.

Lodging expenses and laundry services and tips are also allowed.

All meals are 50% deductible, unless you are using a per diem.  You are not allowed to use them both on the same trip.  So decide in advance which will save you the most money in the long run.

Sightseeing does not qualify as a deduction unless you are attending with a client or colleague and the activity qualifies as a deductible entertainment expense. Traveling expenses for your family are not deductible.

Keeping detailed records are vital to claiming the deductions.  Keep all receipts!  The easiest way to do this is to use a credit card for everything, even taxis.  And remember to save the program or agenda for the conference.