Is My Trip a Deductible Business Expense?

Jan 21, 2020 | Tax Tips

To help you understand business travel, consider this:

You planned a personal trip to Los Angeles, arriving on Friday afternoon and leaving on Sunday afternoon.

About a week later, you learn that a vendor you need to meet with is going to be in L.A. when you are. You arrange a dinner on Friday night to finalize negotiations on a large contract.

Can you now deduct 100 percent of your flight expenses to Los Angeles? How about meals?

 

Trouble

You must have business as your primary purpose for the trip.

In general, a business trip can involve two types of business days: 

  1. Travel day. You count as business those days you spend traveling in a reasonably direct route to your business destination. (Again, note this is your business not your personal destination.)
  2. Presence-required day. If someone requires your presence at a particular place for a specific and bona fide business purpose, this counts as a business day. That “someone” could be any business associate, employee, partner, client, customer, or vendor. 

Non-Deductible Trip

 This trip we created for you works like this:

  • Day 1, Friday, is a personal day. (You may deduct the cost of the business meal with the vendor whether you pay for it in total or go Dutch treat.)
  • Day 2, Saturday, is a personal day.
  • Day 3, Sunday, is a personal day.

 

Deductible Trip

But let’s say you had this situation: You travel on Friday to meet with the vendor on Saturday and return home on Sunday. 

Now, you have a deductible trip.

In conclusion, learn the tax law requirements to deduct expenses.

 

Takeaways

If you are planning a trip that will involve both personal and business days and would like me to review your trip days for tax deductibility, contact me by scheduling a call, or by emailing at [email protected].

 

We specialize in helping clients clarify their taxes so they keep more of their money. Many small business owners who come to see us in Fort Worth, TX generally do not understand the tax law enough to explain it to a fifth grader.

 

Tatsiana B. Bender
Bender CPA, PLLC
Fort Worth, TX 76107
[email protected]
Phone: (817) 313-4352
Bender-CPA.com