How To Take a Tax Deductible Trip

This time of year is an exciting one for me. It’s a time of year when I do a lot of travel that is work related. I attend the Financial Blogger Conference, and I usually go to NMX at the beginning of the year. I also went to Houston recently as part of a gig, and sometimes there are other little conferences to attend.

What’s great about this travel, as opposed to some of the other travel I do over the course of the year, is that it’s tax deductible. What’s better than going somewhere new and seeing some friends? Getting a small financial benefit for doing so!

What’s Tax Deductible?

When you travel for business, you are usually eligible for tax deductions. First of all, though, you need to make sure that you are deducting true business related expenses. Attending conferences and trade shows is great, because these are, by definition, work related.

It’s true that I consider many of the people I see when I go on these trips my friends. But they are also my clients — people I do business with. And while I am at a conference I make business connections (I usually come away with more clients) and I attend informational sessions that provide me with ideas and tools for improving my business.

Some of the expenses that are tax deductible when you travel for business include:

  • Airfare
  • Hotel
  • Ground transportation
  • Portion of meals
  • Registration fees
  • Mileage when you drive your own car
  • Other miscellaneous costs

Double check to make sure that you are eligible for the tax deductions using a calculator before you take them. Also, understand that you can’t claim expenses that you are reimbursed for. So if the company pays you back, you can’t take the deduction. Chances are, though, that if you are traveling for a reason related to your business that you will be able to deduct many of the costs.

Keep Good Records

Make sure that you keep track of everything. Keep receipts, and label them. If you have a business lunch, and you want to deduct a portion of the cost, note what was talked about, and who you met with. Good records can back you up in the event of an audit.

Are You Going Anyway?

It’s important to understand that a tax deduction is not the same thing as a dollar for dollar reduction in your tax bill. This means that you aren’t getting your trip “for free.” Instead, you’re just offsetting some of the cost.

Business tax deductions are most effective when you attend a conference that isn’t out of your way. I’d go to FinCon, and probably NMX, even without the tax deduction. These are conferences that I find useful in helping with my business, as well as providing me with business networking opportunities. The fact that a tax deduction comes with my attendance is just icing on the cake.

If you plan to travel for business, pay attention. You might be surprised at what you can deduct. Your next trip might actually help you reduce your tax liability.

About the Author

Miranda writes about financial topics for several web sites. Her blog is Planting Money Seeds, and her book, Confessions of a Professional Blogger, is available on Amazon.