By Jamie Waggoner
Ever wondered why they have conventions in fun places where you’d like to take a vacation?
For example, a doctor convention in Hawaii. Think maybe those doctors are writing that business trip off on their taxes and may have some fun while they’re in Hawaii?
You may be onto something…but is it legal according to IRS to deduct travel expenses related to a vacation?
Primary Purpose of Trip
It’s important to first understand that we won’t have time in this brief blog post to get into all the “fine print” about deducting travel expenses. We are just here to give you some GENERAL information, not tax advice specific to your situation.
- The first thing you need to figure out, if you’re trying to deduct travel expenses for a vacation, is whether your travel meets the IRS requirement for the trip to be primarily for business purposes. The IRS (believe it or not) does not say you can’t have any vacation days on your trip, but if you’re looking to deduct expenses then the primary reason for the trip must be related to your work or business.
- In the case of that doctor convention in Hawaii, the existence of the convention helps those doctors to meet that requirement.
Justification & Substantiation
The next thing to realize is that you need to have justification and substantiation showing that the trip has a business purpose.
Records you should keep would include:
- Ticket to the conference
- Meal receipts showing who you dined with, what the business purpose was, and other IRS-required notations
- Anything else showing that you conducted business on the trip
Don’t expect the IRS to just take your word for it if you get audited. If you feel that your trip may be viewed as a vacation disguised as a business venture, then take care now to keep records showing the business purpose.
Business Done, Time to Play
Many times a trip will be part business and part personal. The IRS actually provides rules for how that trip should be handled.
If the primary reason you’re traveling is for pleasure, then you can’t write off any expenses.
If you have a big business trip to Hawaii, for instance, and you bring the family, that time spent can be written off during your business meetings. But once the business is done and you stay longer just having fun with the family, no problem, but you can’t write off the hotel and meals for those “play days.” You also can’t write off the travel for your family (unless they’re working in your business in a legitimate capacity).
Be fair to the IRS and the IRS will be fair to you, that’s kind of the idea here, there’s nothing wrong with being crafty but if it feels wrong it probably is wrong…
To learn more about taxes, try our Tax Deductions for Beginners course–it’s free. Or jump into any of our other online tax courses and let’s figure out how much money you can save yourself by knowing the secrets of the tax code. You might find it hard to believe but people who take our inexpensive online tax courses often end up saving many thousands of dollars from the strategies they discover…just keep in mind, don’t abuse the privilege, use this information responsibly!
About the writer:
Jamie Waggoner is a Communication Major at University of North Carolina-Wilmington (UNCW). Jamie’s favorite course at the moment is Integrated Marketing, which shows how smart companies use storytelling and word-of-mouth to develop authentic and compelling relationships with their customers and the general public. Jamie did not realize when she accepted an internship at Pronto Tax School that she would become a tax expert, but hey, life is full of surprises and that’s a good thing.