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Mixing Business Trips with Vacation

By: Lisa Patrick


If you thought your business trips can be expensive, you need to think again. If you plan and strategize, the government can subsidize your trip so that your trip expenses are minimal. The idea is to combine your business travel with vacation time and document the time spent on business. So when on your next business trip you may plan your vacation along with the business trip. The real benefit to doing this is to turn your travel expenses into business expenses.

The initial intent of the travel must reflect the business purpose, but there is no tax law against adding personal travel at the end, middle, or beginning of any business trip.
Understanding deductible expenses
There are certain expenses that are deductible. If you can show the IRS (or CRA in Canada) that your travel benefits your business, your travel expenses are deductible for the purpose of income tax. This would come under the expense category called “necessary and ordinary.” Ordinary expenses are those expenses that are commonly accepted or required for your business. On the other hand, necessary expenses are those that are appropriate and help your business. In other words, if you can tell the IRS/CRA that the expenses on your travel served legitimate business interests, then that expense can be used for the purpose of tax deduction when it is for the betterment of your business.
Lodging and additional travel expenses
The lodging and additional travel expenses are deductible if they can be shown in the interest of business. The lodging and additional travel expenses on the days you conducted business meetings can be used. But if you stayed longer and the “fun part” is disproportionate to the “work part,” you may raise suspicion as to the intentions of the trip. Any personal sightseeing may not be claimed as a legitimate business expense without some personal tax consequence.
Deducting travel expenses
Within the category of necessary and ordinary, expenses on travel can be deducted to include travel to your destination, and back home. Expenses related to hotels, apart from meals and entertainment can also be deducted, if the travel has something to do with business. In other words, the IRS/CRA will approve these expenses as legitimate business expenses if they are meant to advance your business. If you are a business owner, you now have options to attend a convention, hosted by ConventionBusinessTravel.com, physically located at any one of our membership destinations.
If you are going to attend a seminar or a convention, you are well within your rights to use the associated travel and other costs as a tax expense. It’s important that they should be related to your business and should help you promote your business or your professional skills. This is possibly one reason why professional groups choose vacation spots to hold their seminars and conventions. Also, IRS /CRA does not care whether you spend a day or two beyond the exact conference dates. Remember, prior to your booking any travel related expenses, seek the advise of your tax expert to ensure that you allocate your expenses appropriately.
Timing the travel
The timing of the travel is also important. You need to be basically in the location of the convention, however, you can spend your weekends as you wish. If you want to include transportation cost within necessary and ordinary expenses, then your visit must be directly to the town of the intended place of your business meeting.
If you want the days you traveled to be counted as business travel, then you must actually show that they were meant for business. Work and pleasure ratio should show a reasonable proportion. For instance, the IRS/CRA may question the intent of your travel if you count five days of sightseeing along with three days of business as a business trip.
This article was originally published by Convention Business Travel
Published: August 28, 2013

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Lisa Patrick

Lisa Patrick is the Chairman and CEO of Convention Business Travel. She is a savvy, innovative, business-focused executive with a strong network and proven track record with corporate and strategy. Lisa started her career in law enforcement and is now the founder of several successful startups. Lisa prides herself on building relationships first and conducting business next. Today, she successfully balances business, marriage and motherhood.

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