If you are a travel enthusiast my guess is that you will be constantly searching travel sites to find cool places to visit, or you could be wondering why you never have time to travel and promise yourself that something will change soon. In college, I imagine myself taking all sort of cool trips around the world and exploring cultures and collecting unique treasures. My most recent treasure is a hand sewn leather wallet from Cuba.
Regardless of how you decide to take on your dream of traveling the world, if you own a business then you can make these trips deductible. In today's technology world, if you control the areas of your business that you can do remotely that will give you some freedom to take these trips. Think about all the exciting places to visit in Europe or Africa. Yes, these trips are extremely long flights and you may be thinking that you cannot stay away for that long. The great news is you can bring your business along with you and enjoy the benefit of tax-deductible expenses. Business trips whether local or international can be tax deductible if planned correctly. Some of the things you should consider include:
1) Your business portion of the trip should be pre-planned so that you are able to meet the travel rules and make the trip deductible.
2) Business activity should be legitimate business activity that can perform while you are travelling.
3) Based on your travel location, more documentation is needed to prove your business purpose but with planning, you can make this a no-brainer.
The deductible expenses for your trip include airfare, accommodations, transportation on the trip, and 50% of travel meals. If you go on a family trip, then the cost of your family to travel will not be deductible.
Other rules to keep in mind to ensure that you qualify include:
1) Business day rule - if you are conducting business e.g. meeting with someone for a business reason, then your whole day is deductible business expenses. This is regardless of how long the meeting takes.
2) Conventions and seminars - if you are attending any conventions or seminars, these should be at least 4.5 hours to qualify your entire day to qualify as a business day.
3) Include Weekend Days - If you have a business travel week that is before and/or after (e.g. Friday and Monday) a weekend then your weekend days can be considered business regardless of what you do on those days.
4) Trips less than 7 days - If your trip is less than 7 days and you conducted business on the day of that trip then your entire trip can be deductible.
5) Trips over 7 days - If you are traveling for more than 7 days then this trip will be based on your % of business days compared to personal days.
If your entire trip cannot be deductible, based on these rules you can mix your fun and business so that you get a prorated portion of your trip deductible. The key is the keeping documentation on your business activity to validate your deduction. Documentation can include emails with prearranged meetings, itinerary for conferences, minutes from directors and meetings conducted.
For information on how to implement, these money-making steps schedule a free consultation here