Planning a vacation and dreading all the costs? While there are many ways to spend less on vacation, there’s another route to try if you want to travel at a discount: Write off a portion of your trip on your taxes.
The savings won’t be immediate, but you’ll appreciate them come tax time next year. The trick is, you’ll have to add a bit of work into your leisure time. According to the folks at Turbo Tax, any item deemed “ordinary and necessary” as it pertains to your work or business can be considered a tax write off.
Here are some business-related travel expenses you might be able to deduct if you itemize your taxes:
Travel: If the primary purpose of your trip is business-related, you can write off your transportation costs. If you’re driving to and from your destination, your deduction would be 50 cents per mile.
But even if your vacation is pleasure first, business second, some of your travel expenses can be deducted. Pay attention to the miles it takes to travel from your hotel to the trade show or other event you’ll be attending. You can use the 50-cent-per-mile rule for that portion, and any other business portion, of your trip.
Hotels: Lodging expenses can also be deducted. Turbo Tax cautions that only the days used for business can be counted toward this.
Meals: Naturally you have to eat while you’re away. Here again, deductions can be made only for meals related to business. Keep in mind that the write off is for 50% of your meal, and that Uncle Sam may get a little suspicious if your write-off meals have a pattern of including filet mignon and a $305 bottle of Bond Estates Melbury Red.
Also note that you can only write off your portion of the meal, not your entire family’s. However, if you go to lunch with a group of peers and you decide to spring for the bill, you can include all of the meals on the 50% deduction.
Events: You can deduct the cost of entry to a business-related event and any materials that you might need to purchase for an out-of-town seminar. Just think logically: If something you’re purchasing isn’t directly related to the business portion of your trip — e.g., taking your family of five to Disney World while you attend an industry conference in Orlando — you shouldn’t try to claim it on your taxes.
Turning Your Vacation Into a Business Trip
Now that you’re jazzed about writing off some or all of your vacation, let’s think about some ways you can rack up tax deductions on your next out-of-town adventure:
Attend a Seminar
According to attorney Barbara Weltman, any conference that relates to your job and can help you further your knowledge can be considered a tax deduction. “As long as the course relates to your job skills, you can deduct your travel costs and the cost of the education,” she writes in U.S. News & World Report.
If you already have a summer vacation planned, check the websites of professional organizations to see if a conference will be taking place while you’re at your destination. Be sure you can allow time during your trip to attend the appropriate sessions.
Write About It
If you have your own established blog and you think your next vacation would lend itself to a post or two, you can consider writing off some or all of your expenses.
If you’re traveling somewhere exotic or taking an unusual trip, and you think others would want to learn about it, consider pitching your idea to a travel magazine or the travel section of your local newspaper. If the editors agree that your getaway would be something their readers would love to discover and you receive a writing assignment, you’ve just landed yourself a writing gig and a tax deduction.
Just remember that in order for items to be considered deductions, you must pay for them. If a magazine says it will cover your travel expenses, or if a resort offers to comp your stay, that’s great, but you cannot deduct those costs from your taxes.
Here’s a way to do something good for others as well as for your bank account. “If you do volunteer work away from home, your expenses can be deducted as an unreimbursed charitable contribution as long as you itemize your deductions,” Weltman writes. “You must be able to show there’s no significant element of pleasure, recreation, or vacation in the travel.”
Do Some Research
This is a pretty broad category. A writer working on a novel or nonfiction work may travel to a particular site for inspiration or information. A small business owner looking to relocate or expand may visit a proposed site to get a feel for the local business and social climate. As always, when combining such a trip with a family vacation, be sure to only write off the research-related aspects.
Seek Out an Expert in Your Field
Are you attempting to jump start a new business and looking for sage advice? Are you a budding craftsman who wants to tour the workshop of an established professional? Contact your potential mentor and try to set up time to spend with them. Take them out to lunch to pick their brain — just don’t brag about how you’re going to be reimbursed come tax time.
It goes without saying that you should keep all of your receipts, but we’ll repeat it here for maximum effect. If the IRS decides it wants proof that your getaway contained “ordinary and necessary” business activities, you’ll want to have an accurate account of what you did and how much you spent, and how it relates to your career.