If you go on a business trip within the U.S. and add on some vacation days, you know
you can deduct some of your expenses. The question is how much.
First, let's cover just the pure transportation expenses. Transportation costs to and
from the scene of your business activity are 100% deductible as long as the primary
reason for the trip is business rather than pleasure. On the other hand, if vacation
is the primary reason for your travel, then generally none of your transportation
expenses are deductible. Transportation costs include travel to and from your
departure airport, the airfare itself, baggage fees and tips, cabs, and so forth.
Costs for rail travel or driving your personal car also fit into this category.
The number of days spent on business vs. pleasure is the key factor in determining if
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. Standby days (days when your
physical presence is required) also count as business days, even if you are not
called upon to work on those days. Any other day principally devoted to business
activities during normal business hours is also counted as a business day, and so are
days when you intended to work, but could not due to reasons beyond your control
(local transportation difficulties, power failure, etc.).
You should be able to claim business was the primary reason for a domestic trip
whenever the business days exceed the personal days. Be sure to accumulate proof and
keep it with your tax records. For example, if your trip is made to attend client
meetings, log everything on your daily planner and copy the pages for your tax file.
If you attend a convention or training seminar, keep the program and take some notes
to show you attended the sessions.
Once at the destination, your out-of-pocket expenses for business days are fully
deductible. Out-of-pocket expenses include lodging, hotel tips, meals (subject to the
50% disallowance rule), seminar and convention fees, and cab fare. Expenses for
personal days are nondeductible.
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distributor are not rendering legal, accounting or other professional advice or
opinions on specific facts or matters, and, accordingly, assume no liability
whatsoever in connection with its use. The information contained in this newsletter
was not intended or written to be used and cannot be used for the purpose of (1)
avoiding tax-related penalties prescribed by the Internal Revenue Code or (2)
promoting or marketing any tax-related matter addressed herein. © 2015