Looking At That Vacation Expense in a New Way.
Time to take the fam on vacation
School’s out, it’s warm, and I think it is time for you to start considering where to go this summer. Is it the year to head to Cancun, the Himalayas, or Boise? Anywhere sounds good doesn’t it? So how would it sound to head anywhere and be able to turn it into a tax write off? So let’s get this knowledge down so we can schedule the time and purchase your airline tickets.
In this post, we will be your guide with everything you need to know about making a vacation a win win for your tax deduction.
What Can I Deduct?
So, we all want to go on a vacation, the questions is can you deduct it as an expense? Yes, but with a catch; in order for you to make the vacation deductible, there must be a business connection. Explicitly, the reason for the trip must be for business. However; including your personal activities, whether fun or not, is completely legal. It is not unusual for business trips to include personal time, so let’s learn how we can build an entire vacation around it.
Does it sound too good to be true? The IRS rules clearly state if your trip is mainly for business but you prolong your stay, or had other non-business activities, your business related travel expenses are deductible.
Now there are a couple conditions that must be implemented to capitalize on the deductions. For instance you have to be self-employed or own a business.
Here are some rules so you can legally stick it to The IRS.
Your trip needs to be for business.
You must have business appointments arranged, and meetings scheduled before you leave. That is called planning it out. Business conferences relating to your realm of work are also perfectly legitimate to satisfy Uncle Sam.
Make it a sleepover!
The travel must be away from your regular place of business so in other words a sleepover. There should be more business days during the trip then there are personal and also travel days are considered “business days.”
What can I expense?
When traveling for business, all of your transportation costs, whether by plane, train, caribou, or automobile, are all deductible. Also, parking, lodging, tips, rental car, and food and meals limited to 50%.
Who is invited?
Family is definitely welcome but keep in mind you can only deduct your personal expenses. Just think as if you were by yourself, those are the costs you could deductible.
All business related expenses should be “reasonable based on the facts and circumstances.” Meaning, don’t overdo it and try deducting anything above and beyond what would be considered ordinary.
As always, keep records.
Keep your receipts, either actual paper or use a receipt app to take pictures. It is good to write down expenses as well as keeping schedules, pictures, and other items that prove you were where you were.
Spending money never felt so good
Once you add all these items up, there is a lot of deductions available. So sounds like it is time for a vacation this summer that will not only save you thousands in taxes, but make you feel better about your yearly summer family extravaganza.
Now because we love laughing around here we thought we would find out if this kind of vacation seems like one you have been on before?