Planning a Deductible Vacation (Part 2)


Want to know all the tips to planning a deductible vacation? Check out the first part of this story.

Making a vacation entirely tax deductible can be tough, but you can make it happen with these tips. The following deductions can be made as part of a business trip.

If you travel with your family, only your expenses are deductible. However, airlines often offer discounts for accompanying family members, and a hotel room is generally the same price regardless of the number of people in the room. You can deduct what it would cost if you were traveling alone.

You cannot deduct sightseeing expenses while at the conference or convention, such as guided tours or visits to local attractions, museums, sporting events and theaters unless you were attending with a client or colleague and the activity qualifies as business entertaining.

As with any other business expense, you must keep detailed records and receipts. Use a credit card for all meals, get receipts from taxi drivers, and keep a copy of the detailed hotel bill in addition to the charge card receipt. Be sure to save the conference or convention schedule to prove its relevance to your job. Instead of claiming actual meal and “incidental” expenses you can use a federal “per diem allowance” based on the location of the trip.

Make sure to keep your trip 100% business. If registration begins Sunday, with activities Monday through Thursday, arrive on Sunday and leave on Friday. This way you have no "personal days." All you need to do on Sunday is register, leaving the rest of the day to yourself. You don’t have to spend eight hours each day in a business activity.

Extending your stay to get reduced airfare — like a Saturday night stay-over — is allowed, even though there is no business activity on the extra day, if the additional cost of the stay-over is less than or equal to your airfare savings.

If you've always wanted to visit San Francisco, find a conference or convention related to your business held there and take a tax-deductible vacation.

New Jersey tax pro Robert D. Flach has been preparing 1040s for individuals since 1972.

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