ASK MICKEY: Can I deduct any of my vacation if part of it is for businesses? ANSWER: Turning a vacation into a tax deduction requires planning. As you plan for your next vacation, make sure you take advantage of all the tax write-offs that you are legally entitled to, and that includes the wonderful opportunity to save on taxes by turning your vacation into a tax deduction. Secure appointments before you leave on your trip Most people believe that they can go on vacation and simply hand out their business cards to make the trip deductible. You can not! You must have at least “one” business appointment before you leave to establish the “prior set business purpose” required by the IRS. Assure your trip is all “business travel” In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible if your trip is business related, you are traveling away from your regular place of business longer than an ordinary day’s work, and you need to sleep or rest to meet the demands of your work while away from home. Deduct all on-the-road expenses for each day you’re away For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Joe spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25 a day. Sandwich weekends between business days If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend. Example: Joe makes business appointments in Florida on Friday and one on the following Monday. Even though he has no business on Saturday and Sunday, he may deduct on-the-road business expenses incurred during the weekend. Make most of your trip days into business days The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. Most days in the trip must be for business activities, otherwise you cannot make any transportation deductions. Example: Joe spends six days in San Diego. He leaves early on Thursday morning. He had a seminar on Friday and meets with distributors on Monday and flies’ home on Tuesday, taking the last flight of the day home after playing a complete round of golf. All of these are considered business days. Thursday is a business day, since it includes traveling—even if the rest of the day is spent at the beach. Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count, and Tuesday is a travel day. I’ll be happy to show you how to make your vacation deductible! Contact
