Need a Vacation? Uncle Sam May Help Pay Your Way
Business travel is part of my life. Practically every week I’m on a plane headed somewhere. For many years, my husband couldn’t travel with me on these trips because someone had to be at home to manage family matters. But today our situation has changed, and he has the availability to go with me. So I’ve been extending my stay on some business trips so my husband and I can take in the sites and enjoy a little leisure time.
While it’s fun to travel with my husband, it also makes our mini-vacation more affordable. Often times, a client is paying for my transportation, hotel and meals. Therefore, we only pay for his transportation costs, the additional hotel nights and of course, our personal meals and activities.
Tax Deductible Expenses.
Even when a client isn’t paying my expenses, it’s still more affordable for my husband and me to combine business and personal travel because business travel is tax deductible. The IRS has no problem with business owners deducting legitimate expenses as long as the travel benefits or advances your business. What’s considered legitimate? Anything that is an ordinary and necessary expense. The IRS notes an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. You can find a more information about deductible expenses on the IRS website.
Stay the Weekend.
Most of us conclude our business on Friday, but if airfare costs make it more economical for you to stay over the weekend, then you may be eligible for what’s known as the “Saturday night stay-over rule”. The IRS allows you to deduct the out-of-pocket cost of staying the extra time even though you spend it vacationing. Just make sure the extra cost of the stay-over is less than or equal to your airfare savings.
Reward Programs
One advantage of being a road warrior, is racking up points on loyalty programs. Many of the hotels offer special packages for their frequent guests, such as a second or third night free, or a reduced weekend special. You can take advantage of these programs to reduce the cost of your personal stay.
Ask a Tax Professional
When you combine business and personal travel, make sure you keep detailed records of all your business related expenses. And before you start deducting, consult with a tax professional.
Do you plan to travel with your significant other or family this summer? Share your stories.
