I’m taking a business trip. What can I write off?

Blending business with bliss

If you’re planning on going to any conferences, trade shows, or other events to support and grow your business, you probably understand that you can write off your business trips as tax deductible business expenses. But how would you like to take a tax-deductible vacation?

You could embark on some travel or a vacation and end up saving money come tax time if you’re self-employed.

Let’s say there’s an expo in Florida. If you’re already planning to attend this event, why not bring the family along for a summer vacation? You get to attend the event, your family gets to spend time in Florida, and you’ll be eligible for some tax deductions for the business portion of your trip.

By attending an event that’s considered ordinary and necessary for your line of work, you’ll qualify for a tax deduction for the business portion of the expenses. Here’s how to do it:

How you get there is tax deductible. What you need at the business event and the meals you eat are, too.

What you can deduct

TL;DR: Transportation, accommodations, and meals

You can deduct registration, materials required to attend the event, and associated costs to get you to the event. This includes round-trip airfare, car rental, mileage when using your own vehicle, public transportation, and any other costs directly related to the business portion of your trip. 

Lodging is deductible while you’re there for business. 

Meals are deductible too, but typically only at 50% of the allowable cost. You can track your actual costs or use the IRS standard meal allowance, commonly known as the per diem rate (a set daily rate for meals and incidental expenses, not for lodging). The 50% limitation applies either way. You can’t mix methods in one trip, so pick one and stick with it.

By the way, if you’re traveling abroad, you can often shop duty free (low to no taxes). Just make sure to follow these duty-free shopping tips so you don’t pay more than you expected.

What you can’t deduct

TL;DR: Family stuff (except for lodging at the time of the event) and things beyond the event schedule

If you’re taking the family along, their individual expenses cannot be deducted. If your family of four is flying, you can only deduct your personal airfare. Also, if you take the family to do things not related to the event you’re there to attend, those costs cannot be deducted. 

You can’t deduct expenses for things that occur beyond the event schedule. For example, if you’re attending a three-day conference but stay an entire week with your family, you can’t deduct the other four days of lodging, meals, etc.  

Entertainment expenses aren’t deductible at all.

The biggest possible benefit is lodging. If the hotel room would have cost the same whether you traveled alone or your family accompanied you, the lodging expense may be deductible if the trip is primarily for business. However, if bringing your family increases the cost of the room, you can only deduct the business portion.

Planning and record keeping

As you can see, it’s possible to combine a business trip with some rest and relaxation and yield some nice tax breaks. There’s a pleasant irony to that. The key is careful planning and record-keeping.

Make sure the event you’re interested in qualifies as an ordinary and necessary expense for your line of work. Though travel expenses for conventions can be deductible for self-employed individuals, you must show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

As always, make sure to keep good records, including all receipts, mileage logs, event materials, and so on. Don’t forget to separate the expenses required for the conference or event from the non-deductible family expenses so that you’re not double-dipping.

If planned right, you can advance professionally, benefit from some tax breaks, and even enjoy the trip on a personal level, too.

Go deeper: Read the tax tips article “Tax Deductions for Business Travelers.”