How To Turn a Vacation Into a Tax Deduction

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Wells & Associates CPA LLC, a Spartanburg area financial services firm, advises customers how to legally deduct business expenses without IRS audit.

Wells & Associates CPA LLC advises customers on how to legally deduct business expenses from a vacation. The following key points are critical for customers to ensure full legal deductions from the Internal Revenue Service.

Make all business appointments before leaving on the trip: Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible. The IRS requires at least one business appointment establishing a “prior set business purpose” before leaving. If a client wishes to vacation in Hawaii, and they place several ads for distributors, or contacts some distributors to perform a presentation, then the IRS would accept the trip. It is imperative to document this business purpose by keeping a copy of the advertisements and all correspondence, along with notation.

Make sure trip is all “Business Travel:” In order to deduct all on-the-road business expenses, the client must be traveling on business. IRS states that travel expenses are 100 percent deductible as long as the trip is business related. Traveling away from the regular place of business longer than an ordinary day’s work, and if the client needs sleep or rest to meet demands of work while away from home is permissible . Clients do not need to live far away to be on business travel. If there is good reason for sleeping at a destination, due to transportation issues, inclement weather, even only a few miles away, they could still be on travel status.

Deduct all on-the-road expenses for each day: Clients can deduct 100 percent of lodging, tips, car rentals and 50 percent of food. The IRS doesn’t require receipts for travel expenses under $75 per expense – except for lodging. It is critical though for the client to maintain an updated diary for audit-proof records. Adequate documentation includes amount, date, place of meeting, and business reason.

Not only are on-the-road expenses deductible from the trip, but also all laundry, shoe shines, dry-cleaning etc. Thus, dry-cleaning bills incurred will be fully deductible.

Sandwich weekends between business days: If there is a business day on Friday and another one on Monday, deduct all on-the-road expenses during the weekend.

Make the majority of trips count as business days: IRS says clients can deduct transportation expenses if business is the primary purpose of the trip. The majority of days in the trip must be for business; otherwise no transport deductions can be made.

Consult the financial professionals at Wells & Associates CPA before an upcoming trip. They’ll provide the correct guidance to legally deduct vacation when combined with business.

About the company:

Wells & Associates CPA LLC started serving the Spartanburg area in 2002. Randy Wells and John McArthur have decades of small business, public and governmental experience in accounting, tax preparation and tax representation.

Their services encompass nearly every aspect of financial life. They are experienced in all matters of accounting services, bookkeeping services, CPA services and taxation, IRS problem resolution, estates and trusts, small business advice, financial planning and investment, real estate and business sales. For more information, please visit their website at http://www.wacpallc.com.

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John McArthur
Wells & Associates CPA LLC
864-574-6768
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