Getting to the Airport
All business expenses incurred with
getting to your flight are deductible.
Planes and Trains
Airfare, train tickets, tips and
fees are deductible.
Make it a Long Weekend
If it's cheaper to stay through a
Saturday - maximize your trip and deduct the expenses.
Document everything and keep every
receipt associated with travel expenses.
Here are some strategies for deducting travel expenses
and subsidizing downtime while away on business.
Deducting Domestic Transportation Expenses
Getting to and from
your business activity is 100% deductible, as long
as "business" is the primary reason for
traveling. The deductible expenses include travel to and from
your departure airport, the airfare, baggage fees and tips, and cabs to
and from the destination. Once at the destination, your
out-of-pocket expenses for business days are fully deductible including
lodging, hotel tips, meals (subject to the 50% disallowance rule).
Traveling during Weekends and Holidays
How do you determine
if the primary reason for domestic travel is for business when you mix
in a little pleasure? The number of days spent on business versus
pleasure is the key factor.
The IRS does
not specify how to determine the primary reason for domestic travel,
but the rules on foreign travel offer guidance. Your travel days
will count as business days, as do weekends and holidays, if they fall
between days devoted to business and it would be impractical to return
Columbus Day, Martin Luther King Day, etc. Standby days,
when your physical presence is required, also count as business days,
even if you're not called upon to work those days.
Be sure to accumulate proof about your travel itinerary
and keep the proof with your tax records. Log everything on your
daily planner and copy the pages for your tax file. Keep all
receipts dated and organized. If you attend a convention or
training seminar, keep the program and take some notes to show you
attended the sessions.
A great way to maximize deductions for the personal
portions of a trip is with a Saturday night stayover. If you can show
staying the extra day or two costs less (or no more) than coming back
home immediately after a business meeting, the IRS allows you to deduct
your additional meal and lodging expenses (subject to the 50%
disallowance rule for meals).
Conventions on Cruise Ships
related to conventions directly related to your trade that are held
aboard cruise ships are limited to $2,000 per individual per calendar
year. The ship must be
US registered vessel, and all its ports-of-call must be in the US or
If you plan on deducting the expenses of a cruise, the
IRS requires the following:
signed statement showing the total days of the trip spent aboard the
ship, the number of hours each day spent attending scheduled business
activities, and the program of the convention's scheduled business
statement signed by an office of the sponsoring organization that
includes a schedule of each day's business activities and the number of
hours you attended those activities.
travel outside the U.S. primarily for business reasons, the general
rule is that you must allocate all your travel expenses, including
transportation, between business and personal. However, there are two
BIG exceptions, and you can often plan ahead to take advantage of
them. You can deduct 100% of your transportation expenses if the
trip is primarily for business and you meet either of the following
1. The One Week Rule.
You'll meet this rule if your business trip is a week or less, not
counting the day you leave, but counting the day you return. In
this case you can deduct 100% of your transportation costs and 100% of
your other out-of-pocket expenses for business days (subject to the 50%
disallowance rule for meals). You cannot deduct out-of-pocket
costs incurred on vacation days. However, weekends and holidays
falling between business days count as business days.
2. The 25% Rule.
You can also deduct 100% of your transportation expenses for trips
lasting over a week, as long as you spend less than 25% of your days on
vacation. For this purpose, count the day of departure and day of
return as business days, as long as you are traveling to or from the
business destination. Also, count all other types of business
days mentioned under the One Week Rule above. You cannot deduct meals,
lodging and other expenses allocated to personal days.
100% of your transportation costs to foreign destinations are deductible
as long as you can prove a personal vacation was not a consideration in
choosing to make the trip.
These tips are
a brief recap of the deduction rules. Feel free to contact your
Client Service Manager with any questions regarding the
deductions. We can be reached at [813-286-7373].
Kevin Cameron & Jolene Loos
C&L Value Advisors LLC