We all work hard to earn a dol­lar, but work­ing hard can pay­off when it comes to trav­el.  Have you ever been lucky enough to have a con­fer­ence in Hawaii?  Ever won­dered if you could add extra days to be able to tour the beau­ti­ful area and still have it be con­sid­ered a busi­ness trip?  The short answer is YES!

The IRS defindownloades trav­el expens­es as being ordi­nary and nec­es­sary expens­es of trav­el­ing away from home for your busi­ness pro­fes­sion, or job.  The first ques­tion that you need to ask your­self is, “What is the main pur­pose of this trip?”  If it is to go vis­it Cousin Lar­ry and his fam­i­ly, whom hap­pens to also be your client, this might not be con­sid­ered a busi­ness trip.  If you have a meet­ing in Hawaii and would like to tack on a few extra days to sight see with your fam­i­ly, this could be con­sid­ered a busi­ness trip. How­ev­er, be sure to not extend your per­son­al stay too long.  If your per­son­al stay is too long, the IRS will con­sid­er your trip to be more plea­sure rather than busi­ness and dis­al­low your trav­el deductions.

What items are deductible when mix­ing busi­ness with plea­sure?  The fol­low­ing are only deductible if incurred by the employ­ee them­selves, you can­not deduct the expens­es of their sig­nif­i­cant oth­er and families.

  • Trans­porta­tion, which includes air­fare and auto: The IRS does not real­ly care if you get there a few days ear­ly or stay a lit­tle extra.  If you do go a lit­tle ear­ly to take advan­tage of get­ting low­er rates, the asso­ci­at­ed stay-over costs usu­al­ly are deductible, too, even though you have no busi­ness meet­ings that extra day.
  • Lodg­ing: If you are need­ing a suite to accom­mo­date your fam­i­ly, then the cost of a small­er room is what is deductible.  (Remem­ber, only the expens­es relat­ed to the employ­ee are deductible.)  For the extra days that you stay, you can­not deduct those lodg­ing expens­es.  You can, how­ev­er deduct the expens­es if it is relat­ed to stay-over costs as men­tioned above.
  • Din­ing: Din­ing out is deductible, up to 50%, if the expens­es are incurred on busi­ness days or stay-over days.  If you are hav­ing a quick lunch with a client, but the rest of the day is per­son­al time, only that meal is deductible, this day is not a busi­ness day.
  • Mis­cel­la­neous items: Ship­ping of bag­gage and mate­ri­als need­ed for the busi­ness trip, dry clean­ing and laun­dry (if your busi­ness trip is longer than planned), busi­ness calls, and tips for ser­vices relat­ed to any of the above expens­es, just to name a few.

For more infor­ma­tion on how to max­i­mize your tax sav­ings when com­bin­ing busi­ness trav­el with vaca­tion, please con­tact us.  In some cas­es, you may be able to deduct busi­ness trav­el expens­es that you might not think would be deductible.