With the holidays coming, it can be tempting to count a personal trip as business. It is very important that if you take a trip and you want to count it as a business trip that you actually do business while on your trip. This does not include work you could otherwise do at home but just did while on a personal trip.
Business you couldn't conduct at home could include the following:
Meeting with a client or vendor in person who lives elsewhere than you do.
Going to educational training offered in person in a location that you traveled to.
Going to networking events that are located away from your home.
Going to a business conference in relation to your field of work.
If you're actually conducting work that can't be done at home and needs to be traveled to then it can be counted. Now what if you do some personal sight seeing and events while there?
For example, you have been busy all day at a business conference and then want to go out to dinner with your colleagues. This is a business meal. You are still conducting business.
What if instead of meeting with colleagues you brought your family to the conference with you and you take them out to dinner. Then no, this isn't a business expense. The flight tickets and costs they are incurring for them to come on the trip is not a business expense. They are coming because they wanted to, not because they are doing business at the conference with you. Now, if they are employed by you for your business and you document they are working and you talk business while at dinner then they can be counted but they must be employed by your business officially. You can't just say they are "working for you" or "employed" they must have actual roles for your business.
Now, what if, you were on a business trip and it just happened to be in the same place your best friend is and you want to spend some time with them. That is great, but if they aren't a business partner, employee, vendor, or ect. The expenses related to meeting with them is not a business expense.
When planning a trip if you really want to take it as a business expense, plan to do work during the normal business hours 9-5. This way there is no question if you were to get audited if those expenses for that trip were really necessary business expenses.
All too often business owners want to take all the deductions they can so they don't have to pay taxes. Just make sure you do it honestly. It is only fair if your really deducting business trips. If all of us deducted personal expenses then we wouldn't pay any taxes and there for would have no funds to support our government. As much as I want to pay less taxes, I want my clients to do it honestly. Cutting corners isn't okay.
As you can see it gets tricky. Things can definitely be iffy. Another example is when you extend your business trip to have some days to sight see or do some tours. Those additional days at the hotel are not business nor is the additional tour costs. The flight can still be fully written off since you still needed to be there and still need to get home regardless but those days aren't business trip days. If you travel over a weekend or a holiday the days you would normally be taken off can be paid for by the business but any extra tours and entertainment can't be deducted. Those were not required to conduct business on your trip.
When your on a business trip things like toiletries and makeup aren't business expenses. Even though they are needed, they are a personal need and not needed because your in business. A very common one that i know people like to try and write off is hair, nails, and makeup before big events like business trips. Those are usually not considered business expenses. Unless your in the public eye and seen as a public figure, which is super hard to prove and get approved, then those expenses are personal regardless of you thinking you need to look your best at these events.
So many logistics when it comes to taking a business trip! When in doubt, ask a professional. If thinking it really is personal then don't even bother, it is personal and don't push the limits.
I know we all wish we could take a family vacation and write it all off because we had one hour meeting when we first got there but that isn't how it works. We need to conduct as much work as we would at home to be able to count it. I can't tell you how many times, I have thought about trying to make trips business but more often than not for me because I work remote and rarely meet with clients in person, I don't have a lot of business trip expenses. They are usually personal trips and I conduct my normal business on my laptop while on my trip. Those are not business trips, just my personal family trip without me being able to take a break from my everyday work.
Need a great way to keep track if a trip is a business expense or not? Download my free printable on an easy way to know if it is a personal or business trip! This is perfect to put on your bulletin board or in a binder to remind you of your business write offs. When you question what to do on your next coming trip, you can refer to it and know what is a business trip expense and what should be personal.
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