Five Tax Tips For Writing Off Vacations for Your Business


It is pretty much not a headbanger to write off business-related travel for industry conferences and speaking engagements. But small business owners can also deduct their vacations legally, according to Anis Blémur, owner and manager at AB Consulting & Accounting Services, which specializes in accounting services, real estate services, consulting and tax savings strategies for businesses and individuals. Of course, it takes proper planning, but you can deduct most of your vacations if you combine them with business, explains Blemur. He offers the following strategies that help you mix business and pleasure.

1. Make all your business appointments before you leave for your trip. Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible. Wrong assumption. You must have at least one business appointment before you leave in order to establish the “prior set business purpose” required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.

Tip: It would be vital for Tim to document this business purpose by keeping a copy of all correspondence along with noting what appointments he will have in his diary.

2. Make Sure your Trip is All “Business Travel.” In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day’s work and you need to sleep or rest to meet the demands of your work while away from home.

Tip: Remember that you don’t need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.

3. Make sure that you deduct all of your on-the-road -expenses for each day you’re away. For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. The IRS doesn’t require receipts for travel expense under $75 per expense–except for lodging.

Tip: Not only is your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home.

4. Sandwich weekends between business days. If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.

Tip: Expenses on the road can add up. That’s why a number of online expense tracking services are now available for the business traveler. Many of these services are used to implement company travel-reimbursement plans, generate client bill-back reports, or simply to track basic travel expenses. Moreover, there are mobile apps that now allow capturing of receipts with your phone. One such app is ProExpenser. Another is Expensify.

5. Make the majority of your trip serve as business days. The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities if you want to write off transportation deductions.

Tip: You can deduct travel expenses only if you are traveling away from home in connection with the pursuit of an existing business. Travel expenses you incur in connection with acquiring or starting a new business are not deductible as a business expenses.


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