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Take Advantage of Tax Deductions on Summer Business Trips

GS bio photoBy Lori Shrout, Manager, Gumbiner Savett Inc.

Do you plan on mixing pleasure with business on a trip this summer? Maybe you plan to stay a few extra days after the business is done, or bring along family members? From a business travel tax planning perspective, keep in mind this basic concept: The primary purpose of the travel must be business-related. Otherwise, you could forfeit valuable tax deductions.

If you stick to the business itinerary, you can write off most of your travel costs – even though you may spend part of your time on personal pursuits. The key is to record significantly more “business days” than “personal days” on the trip.

Example: Bob Mathews, a self-employed individual, flies cross-country on Monday to make a presentation to a client. He is in business meetings Tuesday through Thursday. On Friday, the client inks the deal. John decides to spend the weekend playing golf and lounging by the pool. He flies home the following Monday.

The round-trip airfare is , 500. He also incurs , 400 in lodging (0 a night) and 0 in meals (0 a day) during his eight-day trip.

On these facts, Bob spends six days on business – the two days traveling count as business days – and only two days on pleasure. So the trip qualifies as business-related travel. He has business expenses of:

  • The entire airfare — 00
  • Five nights of lodging — , 000
  • Six days of meals — $600

Result: John’s business related expenses are $3, 100, from a total bill of $3, 700.

Note: Any personal expenses, such as green fees at the golf course, are nondeductible. Also, if family members accompany you on a trip, you cannot deduct their expenses, but your own travel may still qualify as business-related.

This is just a brief summary of the pertinent tax rules. To review the tax requirements for your travel plans, check with a qualified tax professional before you take flight.

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