Tax Deductions: Can a Vacation Be Considered a Business Trip?

As you are traveling this summer, how do you know if you can deduct the cost of the trip?  What exactly can you deduct?  

Unlike most areas of taxes, there is not a lot of grey in this area of deductions. Most people assume that if you go on a vacation with your family and happen to discuss business while you are there or if you happen to run into someone while you’re traveling and you conduct business, it makes it a business trip that is fully deductible on your taxes. Unfortunately, as much as we all wish it was so, that is not the case. 

It’s All About Your Intentions

The most important thing to remember when trying to determine what is deductible on a vacation or trip is the intent behind it. If you go on a trip with the intent of conducting business, there are more options for deductions, whereas if you go on a trip with no intent to conduct business, there are less options.

For example, if you and your family go on vacation to Kansas City to see the sights, and you happen to run into someone who is looking for a contractor to remodel their kitchen and y’all talk about your work, you give them your card and put in a bid on the job, this does not make the trip business, nor does it make any of the expenses deductible. If you were to travel to the home to take notes or measurements on the kitchen, the travel costs for the trip to their house and if you stop for lunch on the way there or back are deductible. 

So, How Can I Get the Most Deductions Out of My Trip?

The best way to write most expenses off for a trip or vacation is to make the main purpose of the trip business related. For example, if you own a bar and you decide to go on a trip to California wine country to tour wineries and sample wines and find a new wine supplier, that is a business trip that doubles as a vacation! Congratulations and have fun! All travel, food, hotels, etc. are deductible. However, if you brought along your significant other or friend and they are not a part of the business, keep in mind that their expenses are not deductible. 

For more information

It is always important to remember that the intent behind the trip is the main determining factor in what you can and can’t deduct on your taxes. If you have any questions, feel free to reach out to us anytime, and we can help you to determine exactly what expenses are and are not deductible. 

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Lydia Paasch, Bookkeeper in Springfield MO
I'm Lydia Paasch

After years helping small and medium-sized businesses with their accounting, I’ve developed an the perfect system for making QuickBooks work for you.

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