Tax Deductable Vacations?
July 21, 2008
Do you like to vacation? Visit friends and family, get away from work, or just relax, whatever your reason we all deserve a vacation at some point. While I can't help you find the time for a vacation I can help make your vacation as economically sensible as possible.
Have Uncle Sam pay for a portion of your vacation! Will the government really pay for my vacation? Well, maybe not completely but if the opportunity exists we may want to take full advantage of what the government will give us. Such opportunities DO exist for the small business owner. Let me explain: Lets say Mark who owns a heating & cooling business needs to take certain classes to keep up to date on the changing standards and equipment used in his industry. Mark could do what he always does and take the family on a Disney vacation for a week at the end of July, however he will not derive any tax benefit as there was no business reason for the trip to Orlando. On the other hand lets say Mark signs up for a seminar on heating and cooling in Orlando in the middle of June. This would essentially make a non deductible vacation to at least a partially tax deductible one. Keep in mind that he cannot deduct the travel expenses for his family unless they have a bona fide business purpose for going. This means if they all fly to Orlando, he can write off only HIS airline ticket, not the rest of his families. However the hotel stay could be 100% deductible even if the entire family stays with him. As long as Mark would have needed the hotel room during the seminar days then he is all set. If the seminar is only 3 days long and the vacation lasts 5 days then Mark can write off 3 nights hotel stays. Mark is also allowed to write off his meals while away on business.
How much of a tax savings are we talking about? Well, lets add it up and see.
Hotel (3 nights) - $300
Airfare (1 ticket round trip) - $525
Meals (3 nights) - $75
Rent-A-Car (3 days) - $100
Total deductions for trip - $1,000
Depending on your financial situation, if you were to time your vacation with a business trip you could actually benefit anywhere from $350-$450 cash in your pocket come tax time!
If your in a position to take advantage of this tax strategy you NEED to do so. Free money does not come along everyday. Give me a call if you have any questions on this tax saving strategy.
Saul Giminez EA
Gold Star Taxes Inc.