Don’t Lose Tax Benefits When Combining Business Travel with Vacation Pleasure

May 8, 2014

Are you thinking about turning a business trip into a family vacation this summer? This can be a great way to double the payoff of your time and efforts. But if you’re not careful, you could lose the tax benefits of business travel.

Generally, if the primary purpose of your trip is business, then expenses directly attributable to business will be deductible (or excludable from your taxable income if your employer is paying the expenses or reimbursing you through an accountable plan). Reasonable and necessary travel expenses generally include:

  • Air, taxi and rail fares,
  • Baggage handling,
  • Car use or rental,
  • Lodging,
  • Meals, and
  • Tips.

Expenses associated with taking extra days for sightseeing, relaxation or other personal activities generally aren’t deductible, nor are the costs of your spouse or children traveling with you. During your trip it’s critical to carefully document your business vs. personal expenses. Also keep in mind that special limitations apply to foreign travel, luxury water travel and certain convention expenses.

For more information on how to maximize your tax savings when combining business travel with a vacation, please contact JPS. In some cases you may be able to deduct expenses that you might not think would be deductible.