How to Make the Most of Business Expenses

Author: Lani Coggins

Despite the old adage that advises against mixing business with pleasure, life is not always so black and white. Because business travel provides an opportunity to explore new places without incurring as many expenses, many people add some personal time to a business trip, especially in a down economy. While this is an excellent way to save some money, it does make deducting business expenses a little less straightforward.

Use these guidelines to help you decide whether you can deduct certain expenses next time you mix business and personal travel:

• The main purpose of the trip must be for business. If you go on a vacation and tack on a business meeting, this does not qualify as a business trip.
• All transportation expenses can be deducted. When the primary purpose of the trip is for business, you can deduct your flight, taxis to and from the airport, rental cars and train fares.
• Enjoy the weekend. The IRS has a rule that allows you to deduct business expenses for a Saturday night stay if it will result in lower air fare. You don't necessarily have to be working over the weekend to claim this benefit, so compare fares to see if this rule applies to your trip.
• Save those receipts. If you are traveling on behalf of a client, they may reimburse some or all of your expenses. If you have business expenses that are not reimbursed, you can deduct them on your Schedule C.

The rules for foreign travel are a little more complicated, but you can deduct all transportation costs if the trip lasts less than one week, or if more than 75% of your time is spent on business. The rules for foreign conventions are less liberal; in order to claim all transportation deductions, there must be a legitimate reason for the conference to be held in a foreign location. 

If you have more questions about deducting business expenses, tax planning, tax preparation, bookkeeping, or any other tax-related issue, contact us here.