May 14, 2018
Mixing Business With Pleasure – What You Can Claim
Can you Deduct Business Travel When it’s Combined With a Vacation?
At this time of year, a summer vacation is on many people’s minds. If you travel for business, combining a business trip with a vacation to offset some of the cost with a tax deduction can sound appealing. But tread carefully, or you might not be eligible for the deduction you’re expecting.
Business travel expenses are potentially deductible if the travel is within the United States and the expenses are “ordinary and necessary” and directly related to the business. (Foreign travel expenses may also be deductible, but stricter rules apply than are discussed here.)
Currently, business owners and the self-employed are potentially eligible to deduct business travel expenses. Under the Tax Cuts and Jobs Act, employees can no longer deduct such expenses. The potential deductions discussed below assume that you’re a business owner or self-employed.
Business vs. Pleasure
Transportation costs to and from the location of your business activity may be 100% deductible if the primary reason for the trip is business rather than pleasure. But if vacation is the primary reason for your travel, generally none of those costs are deductible.
The number of days spent on business vs. pleasure is the key factor in determining whether the primary reason for domestic travel is business:
Your travel days count as business days, as do weekends and holidays — if they fall between days devoted to business and it would be impractical to return home.[spacer height=”8px”]
Standby days (days when your physical presence is required) also count as business days, even if you aren’t called upon to work those days.[spacer height=”8px”]
Any other day principally devoted to business activities during normal business hours also counts as a business day.