Mixing Business And Personal Travel? 5 Tips For Tax Deductions

Travel can be expensive for small business owners. So the more you can deduct on your taxes, the better your bottom line will be. But can you deduct personal travel if you combine it with business travel? The answer is yes, under certain conditions. To help you maximize your business travel tax deductions, here are a few key things to do.

1. Make Business Your Primary Reason. One of the most important rules for deducting personal travel during a business trip is to make sure it's a business trip first and foremost. Tacking on a networking event to your week at a theme park isn't likely to cut it. But going to a theme park after a trade convention weekend has a much better chance of passing muster. 

2. Document All Expenses. Keep all receipts and transactions for anything you pay for related to this trip — before, during, and after. This will be key to showing the IRS that you have claimed only the right expenses in good faith. It also allows you to prove which days were business days and that expenses were reasonable. 

3. Enjoy the Weekend. One of the simplest hacks for deducting personal travel days is to wrap business activities around the weekend. If you fly to Orlando on Wednesday for a trade conference and schedule business meetings on Monday, for instance, you can generally visit a theme park over the weekend without having to parse out the personal travel days on your taxes. 

4. Pay the Personal Items. It's often tempting, but don't try to sneak those obvious personal expenses into your business tax deductions. The IRS might thoroughly investigate such expenses, and theme park tickets are going to stand out like a sore thumb. Intentional or inadvertent tax fraud will not only ruin your deductions this year, but it may earn you years of audits too. 

5. Consult a Professional First. The tax rules change from year to year, so never assume that you know what's deductible or not deductible. Instead, meet with your tax preparer before scheduling your trip so you can make the most of it. They will help you make the best choices by understanding what you can and can't do. Then you'll have no surprises later on. 

Where to Start

Want to know more about mixing personal and business travel? Start by consulting with a qualified tax preparation service in your state. With their guidance and these tips, you'll soon have a great plan that boosts your business and that you can enjoy.  

For more information about tax planning, contact a local company.