If you’re one of the lucky ones able to escape this summer, try making travel plans that allow you to deduct some, if not all, of your expenses. By including certain activities to your summer itinerary, you can do just that. Let us show you how.
Business + Pleasure
The primary reason for the trip must be business within the United States but that’s not to say you can’t add pleasure to the equation. By mixing the two, you can qualify your airfare, transportation, lodging and even 50% off your meals to be written off but be careful what you consider “business”, sightseeing and research for future projects can be difficult to prove. If it’s a road trip you prefer, you can deduct 56.5 cents per mile in fuel costs, plus parking and toll fees.
Bringing a spouse with you may incur little to no additional expense aside from meal costs. Regarding housing and travel, the cost of a hotel room is typically the same for two guests as it is for one and if you use frequent flier miles or drive your own car, you’ll be covered.
While there is no specific metric to determine business being your primary reason for travel, it’s clear that if you spend more time on business activities than personal ones, your business expenses are validated. That being said, impeccable record keeping is KEY along with carefully following the rules outlined on IRS.gov in the event that your return is questioned, you will be covered.
Also, please note that airfare deductions while traveling abroad have a different set of rules that determine whether all or some of your costs are deductible.
Registering for business-related seminars, courses or programs while traveling can qualify as a tax-deductible way to expand your knowledge and enjoy the sights. You can deduct the cost of the program and travel-associated costs as long as the continuing education will be an asset to your current job skills. Also don’t forget the KEY to deductions—record keeping. Make sure to sign in for classes and keep all receipts and payment confirmations in a safe place.
Charitable contributions are one way to give back and get back. As long as you itemize your deductions, certain volunteer work done away from your home can be deducted as unreimbursed charitable contributions. To qualify, you must be able to prove that there is no major element of recreation or vacation associated with your travel. A few hours here and there may not be enough to make the cut but an extensive volunteer program, such as Habitat for Humanity, could enable you to include out-of-pocket expenses in your deductions. For example, if you plan on driving to the given location, car expenses (at 14 cents per mile), parking, tolls and other fees can be part of those deductions.
Reclaim your health
Overall health maintenance or improvements are not deductible but if you suffer from certain medical conditions, obesity for instance, you could get healthy at the expense of Uncle Sam. You can potentially write off a stay at a medical health spa if your purpose for attendance is to lose weight but make sure your doctor signs off on that (remember, record keeping is the key). Vehicle transportation to the spa is covered at a rate of 24 cents per mile, as well as parking and toll fees. These medical expenses must total 10% (or 7.5% for those 65 and up) of your adjusted gross income in order to qualify as deductible and like the volunteer deductions, you must itemize.
For each deduction, there are specific rules so make sure you follow guidelines carefully. If you are unsure or just to double-check, it never hurts to meet with a tax advisor for more tips on how to write on your summer travels. And as always…keep everything because good record keeping is KEY.