With only a few days left until the first “official” day of Summer, many have those summer vacations in mind – “when can we find time to take a trip?” “Where should we go?”!
Busy Taxpayers who already have business travel plans set for the Summer may decide to turn a business trip into a family vacation this summer. So, let’s dive into the question, “what expenses on a business trip-turned-family vacation can I deduct on my taxes?”
The IRS allows for a deduction for employers and business owners for travel expenses that are ordinary and necessary for business purposes when someone must travel away from home for more than a typical day’s work. (NOTE: W-2 Employees cannot deduct work-related travel expenses.)
When a trip is purely for business purposes, travel expenses incurred are typically 100% tax deductible – including travel costs, transportation fares, shipping of necessary materials, lodging, and any other “ordinary and necessary” expenses. 50% of non-entertainment meals are generally tax deductible. If the Taxpayer’s family comes along for business travel, generally, only the costs that apply to the Taxpayer traveling for business purposes are deductible. While the cost to drive may be fully deductible regardless of who rides in the car, airfare, multi-room lodging costs, meal expenses for more than just the Taxpayer, etc. would be limited to the individual Taxpayer’s expenses.
When a trip is primarily for business purposes, but the Taxpayer extends the stay for a vacation, only the business-related travel expenses can be deductible. The IRS does allow for weekends and holidays as business days if they fall between business travel days. However, if they fall after all necessary business travel days, the expenses incurred on those days are not deductible.
Trips for personal reasons are not deductible. If any business is conducted while on a vacation, only expenses directly related to business that are ordinary and necessary would be deductible.
Those business owners or employers who plan to claim business travel expenses should be sure to document the purpose of any business trip and maintain all the necessary records and proof of costs for tax return preparation purposes.
Happy Summer Travels!
