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24 Feb 2008 12:33:15 | Dorothy Griggs, EA
Time with family is precious. That's why more and more business
travelers are adding on vacation to their trips and inviting
family to join them. Sometimes it's easy to mix business and
pleasure - especially with the trend toward booking business
conferences at resort areas like Orlando or Las Vegas. With a
little advance planning, you can get Uncle Sam to foot part of
the bill - legally.
The Internal Revenue Service lets you deduct 100 percent of your
transportation costs for travel within the United States - as
long as the primary reason for the trip is business. If your
trip is primarily for pleasure, only expenses directly related
to business are deductible. So the trick is to make business the
principal purpose of your trip. Then you can mix in a few
vacation days and still fully deduct transportation costs,
including: airfare (for yourself only), getting to and from the
airport, tips for baggage handlers, cabs from your hotel to your
business meetings and back. Of course, you don't have to fly to
get tax write-offs. The same rules apply when you travel by rail
or car. Pack the family into the car for the joint
business/vacation destination, and you can deduct the total cost
of driving back and forth, even though others are in the car.
When you share your hotel room with family members, you may
deduct the cost of what you would have paid for a single, rather
than double, room. Just be sure to ask the hotel to note the
single rate on your bill.
Plus, you can write off all your daily out-of-pocket expenses -
lodging, hotel tips, and 50 percent of meals, seminar and
convention fees, cab fare, etc. - for business days at your
destination. Your out-of- pocket expenses for personal days are
not deductible. There is a really easy way to gain maximum tax
deductions and take some extra days off too. It's the Saturday
night stay-over exception. If staying over a Saturday night
would substantially reduce your airfare - and thus the overall
cost of your business trip - the IRS will cut you a break. In
effect, the IRS lets you count the extra days as business days
because staying over actually saves money. Remember, your trip
must still be primarily for business and you can only deduct 50
percent of your meal expenses. Keep in mind that the IRS pays
close attention to deductions claimed for business travel.
Maintain a log to substantiate your business activities. Include
the dates of departure and return, the number of days spent on
business, and the reason for the travel.
About Author :
Dorothy J. Griggs is a licensed Enrolled Agent and has over 10
years of tax and accounting experience. Enrolled Agents are tax
professionals licensed by the federal government to represent
taxpayers and assist them with tax planning and tax return
preparation. Dorothy is also a member of the National
Association of Enrolled Agents. For more great tax tips, visit
her website at www.avirtualaccountant.com
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