Additional Tax Benefits of Travel
Are you thinking about combining a business trip and a family vacation this year? This is a gr
eat way to fund a portion of your vacation costs. But be careful or you could lose the tax benefits of business travel.
Generally, if the primary purpose of your trip is business, then expenses directly attributable to business will be deductible (or excludable from your taxable income — an excellent tax benefit, if your employer is paying the expenses or reimbursing you through an accountable plan). These expenses generally include:
1. Air, taxi, and rail fares,
2. baggage handling,
3. car use or rental,
4. lodging,
5. meals and tips.
Expenses associated with taking extra days for sightseeing, relaxation, or other personal activities, generally, are not deductible, nor is the cost of your spouse or children traveling with you. During your trip, it’s critical to carefully document your business vs. personal expenses. Keep in mind that special limitations apply to foreign travel, luxury water travel, and certain convention expenses.
In some cases you may be able to deduct expenses that you might not think would be deductible. This can lead to extra tax savings and more vacations. For more information on how to maximize your tax benefits when combining business travel with a vacation, please contact Ciuni & Panichi, Inc. and Jim Komos at 216.831.7171 or jkomos@cp-advisors.com.
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