Q: Bonnie asks, “I’m self-employed, what requirements must be met for a trip to written off for work? Say, I take a week-long trip and I attend a one-day class; or just meet with someone. What can I write off?”
A: As always, it depends on the very specifics of your circumstances. But let’s talk in general terms. First and foremost, what is the purpose of the trip? Is it for business, or is it for travel?
If the trip is primarily for business, then you may deduct the cost of travel, lodging, meals – business associated expenses.
If the week-long trip is primarily for pleasure, but you are going to attend a conference in the middle of the week – then the costs associated with the conference can be deductible. However, the travel costs of airfare, transportation, and lodging are not – or the costs must be allocated between personal and pleasure. So even if a trip is primarily personal, expenses incurred while at the destination are deductible if related to taxpayer’s trade or business, even though the travel expenses to and from the destinations might not be deductible.
How much time must be business for travel to be deductible? As a general rule over 50% of the trip days should have a bona fide business purpose…
NOTE: Foreign business travel has different rules and the requirements are more restrictive.
You really should just document the specifics and take your specific scenario to your tax pro. Like so many laws – there are many ifs/ands/buts to consider.
Another tax tip. You may not be a big spender when you travel… Check out the federal government’s per diem rates. You may be able to get a larger deduction for your travel. They have “high cost” and “low cost” cities with different rates. You can find the per-diem rates here.
Hope this helps! Feel free to reach out to me personally to discuss the particulars – jcrutcher@nashtax.com.