May 23, 2014 by Aaron Scott Young
When is travel classified as business or personal? This is a question that has been asked throughout the ages. The fact is the IRS has come up with some pretty strict if not overly thought out rules to make this designation. To keep it simple we will stick with the general guidelines.
When you are travelling for business and you are required to sleep away from home, then you can deduct the expenses associated with that trip. You can also deduct all the expenses necessary to sustain life on the road to include meals, transportation, dry cleaning and lodging.
If you choose to travel with a friend and or spouse, and they don’t have a direct business reason for going, you can still write off the amount that is directly related to your expenses. So if you drive your car, you can write off the gas. If you stay together in a hotel, you can write off the room expense as long as you are not charged an additional fee for double occupancy.
You can write off the cost of planes, trains, automobiles and even sailing the seven seas, as long as you can document a direct correlation between the travel and business.
As with any deduction, you must document; in fact you should over document. If you take a trip, keep receipts. If you take a cruise, make sure you keep a copy of the conference agenda. If you are ever challenged by the IRS, these documents will come in handy.
Taxes are the biggest expense business owners face, so knowing what you can and cannot write off is critical. Don’t expect your CPA to school you on the tax rules. In most cases they can only work with what you give them, so if you don’t provide them with the details, then their hands are tied.