Recently I participated in a wedding of a very good friend of mine. I knew I wanted to write off the travel expenses, the lodging, and the meals, but how? For me it turned out to be relatively easy. Not only am I a certified Pathfinder Coach, but I am also an event planner (with my wife) and a personal financial counselor. Therefore, before the trip I contacted the hotel where the wedding was to be held and set up a meeting with the event coordinator. This meeting was for a tour of the facility and information about booking an event there. I also had several meetings with the wedding party; which I could offer counsel on financial issues.
Sound odd? Feel there is no way you could legitimately write off a short trip like this? Don’t dismiss it so soon. It is very possible. And here is how…
Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements.
Days of the week make a big difference – you can treat weekend days as business days by having business meetings planned on either side. For instance:
If Monday is a federal holiday and you have meetings scheduled for Friday and Tuesday then the three days in between are considered business days. They would be deemed business days and all your on-the-road and transportation expenses are deductible.
Note: An IRS private letter ruling allows for Saturday and Sunday to be considered business days if the costs of staying over are less than the airfare to travel after Saturday.
Transportation vs. On-the-road expenses –
o Transportation expenses are those costs that you incur in getting to and from your destination.
o On-the-road expenses include all costs necessary to sustain life while on the road.
Take the family car and save even more. Traveling with non-business family members allows you the same benefit of traveling in the car all by yourself. Whether the car is full or not you still get to deduct the same amount of mileage – $.505/mile this year.
A basic definition is, “sleeping away from home.”
Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable.
Some odd rules you need to know about…
o Strange bed rule – Even if you could make it home, but have traveled say 200 miles from your residence you can get a hotel room for the night and have the business pay for it. If you are going to a convention and the convention is just across town, you still can deduct your lodging expenses for the hotel.
o Pay your family to let you stay with them – your business can take a tax deduction if you stay with family members – but you must pay them something. There is a two week per year allowance.
By Coach Jeff Earlywine
More information can be found: www.helpmybusinesstoday.com