How to Deduct Travel Expenses

Whether it's Florida, New York, Las Vegas, or Europe, Americans love to travel. And we love it even more when it's tax-deductible. Here are some ideas to make it so

The trip must be primarily for business purposes.

This condition must be met in advance — so make firm plans before you go and stick to them on your trip.

You are the judge of what qualifies as business.

You are the Chairperson of the Board when it comes to your own business or career. Make business appointments, attend a workshop, or visit colleagues. Do whatever you need to do to further your career, but keep the expenses reasonable and the business purpose obvious. Remember that you may have to explain the trip to the IRS. Last year, one of our clients attended a one-day workshop on a Friday in San Diego and a 2-day workshop in Las Vegas the following Monday. In between, she spent the weekend with her son in Orange County. It's OK to visit relatives or sight-see on weekends and days that fall between business days. The entire trip was deductible.

You don't have to be self-employed to travel on business.

Even if you are an employee and your employer does not require you to travel, your trip may be tax-deductible. If you are traveling in the pursuit of a job opportunity, attending a career workshop, or have a series of meetings to gather information from colleagues in the same occupation as yourself, you are traveling on business. If you own rental property, you may take trips to inspect and maintain your property.

Keep separate track of meals and entertainment.

Even on a business trip, you may only deduct 50% of the cost of meals and entertainment, so maintain good records to calculate the correct deduction.

There are some specific rules that must be followed to validate your trip in the eyes of the IRS. These rules are all found in IRS Publication 463 which can be downloaded at Breaking the rules is tax evasion (which is illegal). Taking advantage of the rules is tax reduction (which is legal). Be sure to follow the rules. Bon voyage.

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