Deducting Business Travel

With travel so expensive at the moment, it's natural to wonder how you could make that upcoming trip deductible. The best thing you can do is plan ahead and get in touch with your accountant to discuss your goals.

The entire point of a business trip must be business if you want to deduct it all. If your primary reason for going to the destination is business but you extend your stay for vacation or personal matters, you can only deduct the business-related expenses.

Another requirement has to do with your tax home, the place you do the majority of your business regardless of where you live. When you travel for business it needs to be far enough outside of your tax home that it would make sense for you to stay the night.

Maybe you're still wondering what kinds of activities can make it a business trip. Training, seminars, conferences, meeting with clients or future clients, meetings with vendors or future vendors, scouting office real estate, attending live events, podcast recording, video shoots, team retreats, and the list goes on.

If it makes sense for YOUR business then it can be deducted, be sure to always check with your accountant or tax pro before your trip so you can be prepared!

"Plan ahead. Have an itinerary. If you're going to be taking any sort of trip that could have a business component, you want to be documenting that really well."

In this episode, you will learn the following:

1. How to make a business trip and save money in taxes?
2. What types of activities can you add to your itinerary to convert a trip into a business trip?
3. What are the hacks for getting the most out of a business trip deduction?

What you'll hear in this episode:

• How business travel is becoming more expensive than ever.
• What is a business trip? What are the rules?
• You can’t just take the laptop and say “it’s a business trip.”.
• What is a business trip? What is truly deductible?
• What is a tax home?
• What types of activities can you add to your itinerary to make your business trip more business-related?
• What are the costs of a business trip?

Here are some brief snippets from this episode:

[00:00:50]
Travel is becoming more expensive than ever. How do I make this a business tax deduction? Most of what I'm saying applies to US domestic travel. There are other rules for international. Plan ahead. Have an itinerary.

[00:03:03]
The destination must have business meaning or purpose that draws you there. You can deduct all of your travel expenses if your trip was entirely business related. You need good documentation to buffer you to make a good, strong business case.

[00:05:52]
What is truly deductible is the business portion of a trip. You don't get to claim it's all business related if it's not. The best thing to do is go to your accountant before you travel and say, I want to make this a business trip.

[00:07:47]
Your tax home is the entire city or general area where your main place of business or work is located. You need to be traveling far enough away on a business trip where you're away from your tax home. You can't deduct your travel expenses for a work location for more than a year.

[00:09:41]
What really inherently makes the trip business related is a lot of the who you're with and what you're doing. Make sure you always have clear evidence and documentation of what you did. This is one of the most highly scrutinized areas in an audit by the IRS.

[00:12:15]
If you are able to deduct your business trip, what types of expenses are then deductible for that trip? Only your meals, lodging, airfare, et cetera are deductible. But when a member of your family is an employee of the business, you can deduct their cost.

[00:15:01]
Make sure you pay for your trip with your personal credit card or bank account. Plan ahead for the business activities. Save evidence of it and then go take the deduction. If you have any questions on business travel, please please jump into the community.

[00:16:49]
To help you with your deduction, jump into the community now. Click on the link in the Show Notes to join us in this month's call to chat with me and our other guest experts. If you enjoyed this episode, please leave a rating and review on your podcast platform.

Related episodes:

196. How to Handle Suspicious Tax Pros

201. How to Deduct Medical Costs and Self-Employed Health Insurance

204. Live Q&A: Will Anyone Actually Buy My Offer?

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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.