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Does Your Summer Travel Qualify For A Business Write-Off?

Does Your Summer Travel Qualify For A Business Write-Off?

Forbesa day ago
Barbara Schreihans, CEO and Founder of Your Tax Coach.
Sunshine. Poolside vibes. Piña coladas. You're out here trying to live your best life this summer … and guess what?
You might be able to write off a chunk of it on your taxes. (Yes, legally. Yes, even that first-class flight.)
If you're a business owner, listen up because you may be able to take that trip and pay less—if you follow the rules carefully. Here's what you need to know.
Lead with business intent.
To qualify, the main reason for a trip must be business. It can't be a 'let's bring my laptop and hope for the best' situation.
Before you book that beachfront suite, ask yourself:
• Are you attending a conference?
• Meeting with clients or vendors?
• Hosting a team retreat?
• Scouting real estate or filming content for your brand?
If the answer is yes (and you can prove it with proper documentation), then you're off to a good start.
The IRS expects written documentation, such as an itinerary, a registration email, meeting confirmations—whatever you need to show the IRS that this isn't just a 'work from beach' vacation. Poor documentation can lead to problems during an audit.
What qualifies as a write-off?
Once a trip is officially a business trip (meaning 50% or more of the days are business-related), here's what leaders may be able to deduct:
• Airfare (yes, even baggage fees)
• Hotel or other lodging (on business days only)
• 50% of meals
• Ubers, Lyfts, parking, rental cars, tolls
• Wi-Fi and other business-related tech
What's not deductible?
• That sunset sailing cruise
• Spa treatments, Disneyland tickets or anything not business-related
• Expenses for spouses or kids (unless they're on payroll)
Tracking everything: The IRS takes documentation seriously.
Documentation is critical for compliance. Because if the IRS ever comes knocking, business owners must show receipts (literally and figuratively).
The IRS may look for detailed calendars of meetings, receipt documentation and notes about what was discussed, who was there and how it benefited your business.
Some entrepreneurs use a business credit card for all travel expenses. This approach can simplify expense tracking and may generate reward points.
Before you book that flight, consider calling your CPA.
I know, this is not as fun as searching for beachfront villas. But one quick conversation with your CPA could save you money (and keep you out of trouble).
Rules change. Interpretations vary. And they can help you structure your trip so you don't miss deductions while staying compliant.
Watch out for these common pitfalls.
• Not documenting business purpose clearly. During an audit, vague notes won't cut it and could result in denied deductions and penalties.
• Mixing personal and business travel without a clear breakdown. If a leader decides to add extra days, only the business-related days are deductible.
• Assuming all expenses are fair game. Some items (like extravagant meals or luxury perks) may raise red flags.
• Failing to meet the 50% business-use threshold. That's the minimum for a trip to qualify for business deductions.
What's the bottom line?
When mixing business and pleasure, business must lead the way. It's important to keep receipts, stay within IRS rules and document, document, document.
Because the only thing better than a summer getaway is one that helps grow your business and slashes your tax bill—when done right.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
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